VA Awards $621.7M for IT Services to IBM, Focusing on SaaS, PaaS, and Emerging Tech

Contract Overview

Contract Amount: $621,721,698 ($621.7M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-09-26

End Date: 2025-01-25

Contract Duration: 1,948 days

Daily Burn Rate: $319.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 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.

Place of Performance

Location: LEESBURG, LOUDOUN County, VIRGINIA, 20175

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $621.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: 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. Key points: 1. Significant investment in IT infrastructure and services for the Department of Veterans Affairs. 2. IBM is the sole awardee, raising questions about competition and potential cost efficiencies. 3. The contract spans nearly five years, indicating a long-term need for these services. 4. Focus on SaaS, PaaS, and emerging technologies suggests a forward-looking IT strategy.

Value Assessment

Rating: fair

The total award amount of $621.7 million over approximately 5 years is substantial. Without specific benchmarks for similar comprehensive IT support contracts, it's difficult to definitively assess its value. However, the duration and scope suggest a significant commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the data indicates this is a Delivery Order, and IBM is the sole awardee for this specific order, which limits direct comparison for this particular task.

Taxpayer Impact: The use of full and open competition aims to secure competitive pricing, but the specific award details warrant further scrutiny to ensure optimal taxpayer value.

Public Impact

Veterans will benefit from improved IT services supporting critical VA functions. The contract supports the modernization of VA's technology infrastructure. IBM's role in providing these services impacts the broader IT services market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole awardee for this delivery order raises competition concerns.
Lack of detailed cost breakdowns makes value assessment challenging.
Reliance on a single vendor for critical IT services could pose risks.

Positive Signals

Awarded under full and open competition.
Focus on modern technologies like SaaS and PaaS.
Long-term contract provides stability for service delivery.

Sector Analysis

This contract falls under Computer Systems Design Services, a broad category within the IT sector. Spending in this area is consistently high across government agencies as they modernize and maintain complex systems. Benchmarks for similar large-scale IT support contracts are often agency-specific.

Small Business Impact

The data indicates that small business participation was not a stated factor in this award (ss: false, sb: false). This suggests that small businesses were not primary contractors or subcontractors on this specific delivery order, which is common for large, complex IT service contracts.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. The presence of multiple delivery orders (no: 2) suggests ongoing management and tasking. Robust oversight is crucial to ensure performance, cost control, and adherence to contract terms.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for vendor lock-in due to sole awardee status.
Lack of transparency in specific cost breakdowns.
Long contract duration may not adapt quickly to technological shifts.
Limited visibility into small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $621.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. 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.

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $621.7 million.

What is the period of performance?

Start: 2019-09-26. End: 2025-01-25.

How does the pricing structure for IBM's services compare to industry standards for similar SaaS, PaaS, and emerging technology support, considering the full and open competition award?

Assessing the pricing requires detailed breakdowns of IBM's proposed costs against industry benchmarks for comparable IT services. While the contract was awarded under full and open competition, the specific details of the delivery order and IBM's sole award for this task limit direct comparison. Further analysis of the contract's CLINs (Contract Line Item Numbers) and associated rates would be necessary to determine if the pricing is competitive and reflects fair market value for the scope of work.

What are the specific risks associated with relying on a single vendor, IBM, for the creation, maintenance, and enforcement of critical IT standards and governance for the VA?

The primary risks include vendor lock-in, reduced negotiating leverage for future contracts, and potential disruptions if IBM faces internal issues or changes its service offerings. Dependence on a single entity for core IT governance could also stifle innovation if alternative solutions are not actively explored. Ensuring strong performance metrics, clear exit strategies, and continuous market surveillance are crucial mitigation steps.

To what extent does this contract contribute to the VA's overall IT modernization goals and improve the effectiveness of services delivered to veterans?

This contract is designed to directly support the VA's IT modernization by providing essential services for SaaS, PaaS, and emerging technologies. The effectiveness hinges on IBM's ability to deliver robust, secure, and scalable solutions that enhance the underlying infrastructure. Successful implementation should lead to more reliable and efficient digital services for veterans, improving their access to benefits and healthcare.

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 DR, BETHESDA, MD, 20817

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

Financial Breakdown

Contract Ceiling: $621,721,698

Exercised Options: $621,721,698

Current Obligation: $621,721,698

Actual Outlays: $298,648,787

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $67,886,469

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1008

IDV Type: IDC

Timeline