DOJ's $548K IBM Hardware Maintenance Contract Awarded to IBM Corp. Under Full and Open Competition

Contract Overview

Contract Amount: $548,097 ($548.1K)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Justice

Start Date: 2022-10-01

End Date: 2025-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $501/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BASE, IBM CERTIFIED HARDWARE MAINTENANCE SERVICES

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Justice obligated $548,096.98 to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: BASE, IBM CERTIFIED HARDWARE MAINTENANCE SERVICES Key points: 1. Value for money assessed through firm-fixed-price contract type, aiming for predictable costs. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators include contract duration and reliance on a single vendor for maintenance. 4. Performance context is tied to ensuring operational continuity for electronic computer hardware. 5. Sector positioning within IT hardware maintenance services, supporting government IT infrastructure.

Value Assessment

Rating: good

The contract's firm-fixed-price structure provides cost certainty for the Department of Justice. Benchmarking against similar hardware maintenance contracts is challenging without specific service level agreements and hardware models. However, the award to the original equipment manufacturer (IBM) is common for specialized maintenance, which can sometimes command a premium but also ensures access to genuine parts and expertise. The total value of $548,096.98 over three years suggests a moderate annual spend.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of three bidders suggests a reasonable level of competition for this specific maintenance service. A competitive process generally helps in achieving fair market pricing and encourages vendors to offer their best terms.

Taxpayer Impact: A competitive award process is beneficial for taxpayers as it helps ensure that the government is not overpaying for essential services like hardware maintenance, driving down costs through market forces.

Public Impact

The Department of Justice benefits from uninterrupted operation of its electronic computer hardware. Essential IT infrastructure maintenance services are delivered, supporting agency operations. The primary geographic impact is within Maryland, where the services are likely utilized. Workforce implications are minimal, as this contract focuses on external maintenance services rather than direct government hiring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if renewal is not competitively bid.
Reliance on a single manufacturer for maintenance could lead to higher costs over time.
Contract duration of three years may not fully capture evolving hardware needs or market price shifts.

Positive Signals

Firm-fixed-price contract provides budget predictability.
Awarded under full and open competition, suggesting a fair market process.
Maintenance by the original equipment manufacturer (IBM) ensures quality and expertise.

Sector Analysis

This contract falls within the Information Technology sector, specifically IT hardware maintenance. The market for IT hardware maintenance is substantial, with numerous providers ranging from original equipment manufacturers (OEMs) to third-party maintenance (TPM) companies. Government spending on IT maintenance is a significant portion of overall IT budgets, crucial for ensuring the operational readiness of critical systems. Comparable spending benchmarks would depend on the specific hardware covered and the service levels required.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and the prime contractor is IBM Corporation, a large business. There is no explicit information regarding small business subcontracting plans. Therefore, the direct impact on the small business ecosystem appears limited for this specific award, though larger contracts often have subcontracting requirements that could indirectly involve small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's contracting officers and program managers responsible for IT infrastructure. Accountability measures are embedded in the firm-fixed-price contract terms, requiring IBM to deliver specified maintenance services. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

IT Hardware Maintenance Services
Department of Justice IT Contracts
IBM Corporation Federal Contracts
Electronic Computer Manufacturing Support

Risk Flags

Potential for increased costs if competition is not maintained in future contract renewals.
Reliance on OEM for maintenance may limit flexibility in choosing alternative support providers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $548,096.98 to INTERNATIONAL BUSINESS MACHINES CORPORATION. BASE, IBM CERTIFIED HARDWARE MAINTENANCE SERVICES

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $548,096.98.

What is the period of performance?

Start: 2022-10-01. End: 2025-09-30.

What is the track record of International Business Machines Corporation (IBM) in providing hardware maintenance services to the federal government?

IBM has a long-standing and extensive track record of providing hardware maintenance and support services to various U.S. federal agencies. Their experience spans decades, covering a wide array of IT infrastructure, including servers, storage, networking equipment, and workstations. Federal agencies often rely on IBM for maintenance of their own manufactured equipment due to the manufacturer's specialized knowledge, access to proprietary parts, and established support infrastructure. While specific performance metrics for individual contracts are not always public, IBM's continued presence as a major federal contractor suggests a generally satisfactory performance history in meeting contractual obligations for maintenance and support services across numerous IT domains.

How does the annual cost of this contract compare to similar federal hardware maintenance contracts?

The annual cost for this contract averages approximately $182,698.99 ($548,096.98 / 3 years). Comparing this figure directly to similar federal hardware maintenance contracts requires careful consideration of several factors, including the specific types of hardware being maintained (servers, workstations, specialized equipment), the service level agreements (SLAs) in place (e.g., response times, uptime guarantees, parts availability), and the geographic scope of the support. Contracts for high-end enterprise servers or mission-critical systems with stringent SLAs typically command higher annual costs than those for standard office workstations. Without detailed specifications of the hardware and services covered under this DOJ contract, a precise benchmark is difficult. However, the award to the OEM (IBM) for its own hardware often implies a certain cost structure that prioritizes expertise and parts availability.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential vendor lock-in, where the government becomes overly reliant on IBM for maintenance, potentially leading to higher costs in the future if competition is limited upon renewal. Another risk is the possibility of service degradation or extended downtime if IBM's support capabilities are strained or if specific parts become obsolete. Mitigation strategies include the initial full and open competition, which aims to secure fair pricing. The firm-fixed-price nature of the contract also shifts some financial risk to the contractor. For future renewals, ensuring robust market research and potentially exploring third-party maintenance options could further mitigate risks. Clear performance metrics and service level agreements within the contract also serve as a mitigation tool.

What is the historical spending pattern for IBM hardware maintenance services at the Department of Justice?

Analyzing historical spending patterns for IBM hardware maintenance at the Department of Justice requires access to detailed contract databases beyond this single award. However, it is common for large federal agencies like the DOJ to have ongoing contracts with major hardware manufacturers like IBM for the maintenance of their IT infrastructure. Such spending typically fluctuates based on hardware refresh cycles, agency-wide IT modernization initiatives, and the overall budget allocated to IT operations. Agencies often consolidate maintenance contracts to streamline procurement and leverage economies of scale. Without specific historical data for the DOJ's IBM maintenance spending, it's presumed to be a consistent, albeit variable, component of their IT operational budget, reflecting the agency's reliance on IBM hardware.

Does the firm-fixed-price contract type adequately address potential cost overruns for hardware maintenance?

Yes, the firm-fixed-price (FFP) contract type is generally considered effective in addressing potential cost overruns for hardware maintenance, especially when the scope of work is well-defined. Under an FFP contract, the contractor (IBM) assumes the primary responsibility for cost overruns. This means that IBM must absorb any increases in its own costs for labor, parts, or overhead associated with providing the maintenance services, up to the agreed-upon contract price. This structure provides the Department of Justice with significant cost certainty and predictability, as the total price is fixed regardless of the contractor's actual costs. This is particularly beneficial for predictable services like routine hardware maintenance, where the scope is less likely to fluctuate dramatically.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

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

Financial Breakdown

Contract Ceiling: $548,097

Exercised Options: $548,097

Current Obligation: $548,097

Actual Outlays: $548,097

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC15B

IDV Type: GWAC

Timeline