IBM Mainframe Recompete contract awarded to International Business Machines Corporation for $14.1M

Contract Overview

Contract Amount: $14,100,000 ($14.1M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Agriculture

Start Date: 2024-12-31

End Date: 2027-03-31

Contract Duration: 820 days

Daily Burn Rate: $17.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM MAINFRAME RECOMPETE C2D1A9 HSTXXX0000000483

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64114

State: Missouri Government Spending

Plain-Language Summary

Department of Agriculture obligated $14.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IBM MAINFRAME RECOMPETE C2D1A9 HSTXXX0000000483 Key points: 1. Contract awarded to incumbent for a critical IT service, suggesting a focus on continuity. 2. The firm-fixed-price contract type aims to control costs and provide predictable spending. 3. A long performance period of over two years indicates a need for sustained support. 4. The contract is for custom computer programming services, a key area for IT infrastructure. 5. Awarded by the Department of Agriculture, highlighting the importance of IT for agency operations.

Value Assessment

Rating: good

The contract value of $14.1 million for custom computer programming services appears reasonable given the duration and the nature of mainframe support. Benchmarking against similar large-scale IT recompetes for critical infrastructure would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests an effort to manage costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it is a recompete suggests that the incumbent, IBM, was likely a strong contender. The level of competition, while open, may have been influenced by the specialized nature of mainframe services.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing and potentially leads to better value. It ensures that the government explores various options before selecting a contractor.

Public Impact

Federal employees within the Department of Agriculture will benefit from reliable mainframe services. Ensures the continued operation of critical IT systems supporting agency functions. The services delivered are essential for data processing and management within the agency. The geographic impact is primarily within the Department of Agriculture's operational footprint.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized skills are not transferable.
Reliance on a single vendor for critical mainframe operations could pose a risk.

Positive Signals

Firm-fixed-price contract helps control costs.
Full and open competition ensures a fair bidding process.
Long-term contract provides stability for essential IT services.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. The market for mainframe services is mature but specialized, with a limited number of providers capable of supporting such critical infrastructure. Spending on IT services by federal agencies is substantial, with custom programming being a significant component to maintain and modernize legacy systems.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there information on subcontracting plans. Given the specialized nature of mainframe services, it is less common for small businesses to be primary contractors in this area, though they might participate as subcontractors.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm-fixed-price nature provides a degree of financial oversight. Transparency is maintained through contract award databases. The Inspector General for the Department of Agriculture would have jurisdiction over any potential fraud or mismanagement.

Related Government Programs

Department of Agriculture IT Modernization Efforts
Federal Mainframe Support Contracts
Custom Computer Programming Services

Risk Flags

Potential for vendor lock-in
Reliance on specialized mainframe expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $14.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IBM MAINFRAME RECOMPETE C2D1A9 HSTXXX0000000483

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $14.1 million.

What is the period of performance?

Start: 2024-12-31. End: 2027-03-31.

What is the historical spending pattern for mainframe services within the Department of Agriculture?

Analyzing historical spending on mainframe services within the Department of Agriculture is crucial for understanding the context of this $14.1 million recompete. While specific historical data for this exact contract is not provided, general trends in federal IT spending show a continued reliance on mainframe systems for critical functions, even as agencies pursue modernization. Agencies often face a balancing act between investing in new technologies and maintaining essential legacy systems. Understanding the year-over-year expenditure on similar services, the number of previous contracts, and the awarded amounts to different vendors would reveal if this $14.1 million award represents an increase, decrease, or stable investment compared to prior periods. This historical perspective helps assess whether the current award is aligned with long-term budget strategies and if the agency is effectively managing its mainframe-related expenditures over time.

How does the pricing of this contract compare to similar mainframe support contracts awarded to IBM or other vendors?

Benchmarking the pricing of this $14.1 million IBM mainframe recompete against similar contracts is essential for evaluating value for money. Without access to a database of comparable contracts, a precise comparison is difficult. However, factors to consider include the scope of services (e.g., maintenance, upgrades, custom programming), the duration of the contract (ending March 31, 2027), and the specific mainframe hardware and software involved. If this contract covers a broad range of support and custom development for a significant portion of the agency's mainframe infrastructure, the price may be competitive. Conversely, if similar contracts for less comprehensive support or shorter durations were awarded at a lower total cost or lower annual rate, it could indicate potential overpricing. The firm-fixed-price structure suggests that IBM has committed to delivering the specified services within this budget, shifting some of the cost risk to the contractor.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The success of this IBM mainframe recompete contract, valued at $14.1 million, would typically be measured against a set of Key Performance Indicators (KPIs) defined in the contract's statement of work. For custom computer programming services supporting critical IT infrastructure like mainframes, common KPIs often include system uptime and availability (e.g., 99.9% availability), response times for issue resolution (e.g., critical issues resolved within 4 hours), successful completion of development milestones within agreed timelines, adherence to security protocols, and user satisfaction. The firm-fixed-price nature of the contract incentivizes the contractor to meet these performance standards efficiently. The Department of Agriculture's Office of the Chief Financial Officer would likely monitor these KPIs regularly to ensure the contractor is delivering the required services effectively and that the investment is yielding the expected operational benefits for the agency.

What is the track record of International Business Machines Corporation (IBM) in delivering similar mainframe services to federal agencies?

International Business Machines Corporation (IBM) has a long and extensive track record in providing mainframe hardware, software, and services to federal agencies. They are a primary vendor for mainframe technology, and many government entities rely on IBM systems for their core operations. IBM's experience typically includes managing complex IT infrastructure, offering custom programming, system integration, and ongoing maintenance for mainframe environments. Their track record with the Department of Agriculture specifically, and other agencies like the Department of Defense or Treasury, would be a key factor in the decision to award this $14.1 million recompete. Agencies often evaluate a contractor's past performance, including their ability to meet deadlines, stay within budget, and deliver quality services, when making recompete decisions. IBM's established presence in the mainframe market suggests a high level of expertise, though performance can vary across individual contracts.

What are the potential risks associated with relying on a single vendor for critical mainframe services?

Relying on a single vendor, such as IBM for this $14.1 million mainframe recompete, introduces several potential risks. One primary concern is vendor lock-in, where the agency becomes heavily dependent on the vendor's proprietary technology, expertise, and pricing structure, making it difficult and costly to switch providers. This dependence can reduce bargaining power during future negotiations. Another risk is the potential for service disruptions if the vendor experiences financial difficulties, operational issues, or decides to discontinue support for specific technologies. Furthermore, a sole reliance might stifle innovation if the vendor does not proactively introduce new solutions or if the agency is hesitant to explore alternatives. While full and open competition was used for this award, the specialized nature of mainframe services often leads to a limited pool of qualified vendors, making single-vendor reliance a common challenge that requires careful contract management and risk mitigation strategies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 NEW ORCHARD RD, ARMONK, NY, 10504

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,942,000

Exercised Options: $14,100,000

Current Obligation: $14,100,000

Actual Outlays: $6,900,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F110DA

IDV Type: FSS

Timeline