Treasury's IRS awards IBM $41.4M for Computer Systems Design Services via Full and Open Competition
Contract Overview
Contract Amount: $41,424,536 ($41.4M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of the Treasury
Start Date: 2019-03-24
End Date: 2023-08-18
Contract Duration: 1,608 days
Daily Burn Rate: $25.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: INTEGRATED FINANCIAL SYSTEM (IFS)
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $41.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: INTEGRATED FINANCIAL SYSTEM (IFS) Key points: 1. Significant contract value of $41.4M awarded to a major IT vendor. 2. Competition was full and open, suggesting a competitive bidding process. 3. Risk is moderate, given the long duration and fixed-price contract type. 4. The sector is IT services, specifically computer systems design.
Value Assessment
Rating: good
The contract value of $41.4M for a 1608-day duration appears reasonable for complex IT systems design services. Benchmarking against similar large-scale IT projects would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes price discovery and competitive pricing.
Taxpayer Impact: The competitive nature of the award suggests taxpayers likely received a fair price for the services rendered.
Public Impact
Modernization of the IRS's financial systems can lead to improved efficiency and taxpayer services. The use of a large, established vendor like IBM may ensure stability and expertise. Long-term contracts can provide continuity but also require ongoing oversight to ensure value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration of 1608 days.
- No small business participation noted.
Positive Signals
- Full and open competition.
- Firm fixed price contract.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design. Spending in this area is critical for government modernization efforts, with benchmarks varying widely based on project scope and complexity.
Small Business Impact
The contract was not awarded to small businesses, which is a common trend for large, complex IT modernization projects. Opportunities for small businesses may exist as subcontractors.
Oversight & Accountability
The contract was awarded via delivery order under a larger contract, suggesting existing oversight mechanisms. However, the long duration necessitates continuous monitoring of performance and costs by the IRS.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Long contract duration (1608 days).
- No small business participation.
- Potential for scope creep in complex IT projects.
- Reliance on a single large vendor.
Tags
computer-systems-design-services, department-of-the-treasury, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $41.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. INTEGRATED FINANCIAL SYSTEM (IFS)
Who is the contractor on this award?
The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $41.4 million.
What is the period of performance?
Start: 2019-03-24. End: 2023-08-18.
What specific improvements to the Integrated Financial System (IFS) are expected from this contract?
This contract is expected to support the modernization and enhancement of the IRS's Integrated Financial System (IFS). Specific improvements likely include increased efficiency in financial operations, better data management capabilities, enhanced security features, and improved reporting functionalities to support the agency's mission and taxpayer services.
What are the primary risks associated with a long-term, firm-fixed-price IT contract of this magnitude?
Key risks include potential cost overruns if initial estimates were inaccurate, scope creep leading to increased costs or delays, vendor lock-in, and the possibility of technology becoming outdated before the contract concludes. The fixed-price nature can also incentivize the vendor to cut corners on quality if not properly managed.
How does the full and open competition method ensure the effectiveness of this IT service acquisition?
Full and open competition ensures effectiveness by allowing any interested and qualified vendor to submit a bid, fostering a competitive environment. This process typically leads to better pricing, higher quality solutions, and innovative approaches as vendors strive to win the contract. It also provides transparency and reduces the likelihood of favoritism.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
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: $344,423,606
Exercised Options: $188,228,006
Current Obligation: $41,424,536
Actual Outlays: $37,489,563
Subaward Activity
Number of Subawards: 147
Total Subaward Amount: $13,544,331
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCK18D0014
IDV Type: GWAC
Timeline
Start Date: 2019-03-24
Current End Date: 2023-08-18
Potential End Date: 2023-09-23 10:56:12
Last Modified: 2025-09-23
More Contracts from International Business Machines Corporation
- Navy Enterprise Resource Planning (ERP) Technical Support Services (netss) — $837.8M (Department of Defense)
- This Requirement IS for the Creation, Maintenance, Enforcement, Analysis and Updates of the Standards and Governance Established by the Current DTC and Provide Technical and Operational Support to the DTC for Saas, Paas, and Emerging Technologies — $621.7M (Department of Veterans Affairs)
- Eadis Software Development — $580.5M (Department of Homeland Security)
- THE Government Intends to Establish a Single-Award Delivery Order Base Plus Four 1year Option Periods for the Renewal of IBM Software Maintenance and the Purchase of More Additional IBM Software Licenses Against the General Services Administrations Federal Supply Schedule Program. Previous Order SS00-15-30081 — $525.4M (Social Security Administration)
- Uscis Transformation Program Solutions Architect (SA) — $376.3M (Department of Homeland Security)
View all International Business Machines Corporation federal contracts →
Other Department of the Treasury Contracts
- Advertising Services — $636.5M (True North Communications Inc)
- Cade 2 Ltis3 Covid-19 — $383.8M (Deloitte Consulting LLP)
- Establish a Broad Networking and Telecommunications Service Environment to Meet ITS Network Services (wide Area and Local Area Network), Voice Telecommunications Services, Audio/Video/Web Conferencing, and Cyber Requirements — $320.2M (AT&T Enterprises, LLC)
- THE Internal Revenue Service (IRS), Office of Information Technology Office, Issues This Order Under GSA Alliant 2 (unrestricted). Enterprise Case Management (ECM) Solution Integration Services — $305.5M (Booz Allen Hamilton Inc)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Verizon Business Network Services LLC)