VA's $9.1M Safety and Workers' Comp System contract awarded to IBM, highlighting IT services for employee well-being

Contract Overview

Contract Amount: $9,067,391 ($9.1M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-09-21

End Date: 2025-09-20

Contract Duration: 1,825 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SAFETY AND WORKERS' COMPENSATION INFORMATION MANAGEMENT SYSTEM

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $9.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: SAFETY AND WORKERS' COMPENSATION INFORMATION MANAGEMENT SYSTEM Key points: 1. Contract focuses on IT systems for managing safety and workers' compensation claims, crucial for employee welfare. 2. IBM, a major IT provider, secured this contract, indicating a reliance on established vendors for critical systems. 3. The contract duration of 5 years suggests a long-term need for system maintenance and potential upgrades. 4. Fixed-price contract type aims to control costs, but requires careful scope management to avoid overruns. 5. The absence of small business set-asides may limit opportunities for smaller, specialized IT firms in this area. 6. This contract falls under IT services, a significant spending category for federal agencies.

Value Assessment

Rating: good

The contract value of approximately $9.1 million over five years for an IT system is within a reasonable range for a system of this nature. Benchmarking against similar IT system development and maintenance contracts for large federal agencies suggests that the overall price is competitive, assuming the scope of work is comprehensive. The firm-fixed-price structure provides cost certainty for the government, provided the requirements are well-defined and managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it was competed suggests a healthy market for these types of IT services. While the number of bidders is not specified, full and open competition generally leads to better price discovery and a wider selection of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and ensures the government receives the best value for its investment.

Public Impact

Federal employees who experience workplace injuries or require safety program support will benefit from an improved management system. The contract delivers IT services essential for the efficient administration of workers' compensation claims and safety protocols. The primary geographic impact is within the Department of Veterans Affairs, supporting its national operations. The contract supports IT professionals and potentially other roles involved in system maintenance and administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in IT projects if requirements are not clearly defined and managed.
Reliance on a single large contractor could pose risks if the contractor faces financial or operational difficulties.
Ensuring adequate technical expertise within the VA to oversee the contractor's performance is crucial.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Firm-fixed-price contract provides cost certainty for the government.
Long-term contract (5 years) allows for stable system development and support.

Sector Analysis

The federal IT services market is vast and highly competitive, with agencies consistently investing in systems to improve operations and employee support. This contract for a Safety and Workers' Compensation Information Management System fits within the broader category of IT modernization and administrative support services. Comparable spending benchmarks for similar enterprise resource planning (ERP) or case management systems within large federal departments often run into tens or hundreds of millions of dollars, making this $9.1 million contract appear moderate in scale for its intended purpose.

Small Business Impact

This contract was not set aside for small businesses, as indicated by `ss: false` and `sb: false`. The award to a large corporation like IBM suggests that the primary focus was on capability and scale rather than small business participation. There is no explicit mention of subcontracting requirements for small businesses, which could limit opportunities for smaller firms to participate in this specific contract's execution.

Oversight & Accountability

The Department of Veterans Affairs (VA) is responsible for overseeing this contract. Oversight mechanisms would typically include regular performance reviews, milestone tracking, and financial audits. As a federal contract, it is subject to the oversight of the VA's Office of Inspector General (OIG), which investigates fraud, waste, and abuse. Transparency is generally maintained through contract award databases and public reporting, though specific performance details may be internal.

Related Government Programs

Federal Employee Compensation Act (FECA) Program
Occupational Safety and Health Administration (OSHA) IT Systems
Department of Labor Workers' Compensation Systems
Federal Civilian Employee Health and Benefits IT

Risk Flags

Potential for vendor lock-in
Risk of scope creep in IT projects
Cybersecurity vulnerabilities
System integration challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $9.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. SAFETY AND WORKERS' COMPENSATION INFORMATION MANAGEMENT SYSTEM

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 $9.1 million.

What is the period of performance?

Start: 2020-09-21. End: 2025-09-20.

What is the specific functionality of the Safety and Workers' Compensation Information Management System?

The Safety and Workers' Compensation Information Management System (SWCIMS) is designed to streamline and manage the processes related to employee safety and workers' compensation claims within the Department of Veterans Affairs (VA). Its core functionalities likely include incident reporting, claim tracking and management, medical record integration, benefits administration, safety program monitoring, and data analytics for risk assessment and prevention. The system aims to improve efficiency, accuracy, and timeliness in handling these critical employee support functions, ensuring compliance with federal regulations and providing necessary support to injured employees.

How does the $9.1 million cost compare to similar IT systems for federal agencies?

The $9.1 million cost for a 5-year contract for a Safety and Workers' Compensation Information Management System is considered moderate for a federal agency of the VA's size. Large-scale IT system development, implementation, and maintenance contracts can range from tens to hundreds of millions of dollars. For instance, similar case management or HR information systems for agencies like the Department of Defense or Social Security Administration often exceed this figure significantly. The firm-fixed-price nature of this contract suggests that the scope was well-defined, contributing to cost predictability. However, a detailed comparison would require analyzing the specific features, user base, and integration requirements against other agency systems.

What are the potential risks associated with this contract?

Potential risks include scope creep, where the project's requirements expand beyond the initial agreement, leading to cost overruns despite the fixed-price structure. There's also a risk of vendor lock-in, making it difficult or costly to switch providers in the future. Technical risks involve system integration challenges with existing VA infrastructure, cybersecurity vulnerabilities, and ensuring the system's reliability and performance under heavy use. Furthermore, if the system fails to meet user needs or improve efficiency, it could lead to decreased employee satisfaction and administrative burdens. The long duration also means the system must remain adaptable to evolving regulations and technologies.

What is IBM's track record with similar government IT contracts?

International Business Machines Corporation (IBM) has an extensive track record of providing IT services and solutions to government agencies, including the U.S. federal government. They have been involved in numerous large-scale IT modernization projects, cloud computing initiatives, data analytics, and system integration efforts across various departments. IBM has experience with complex systems, often handling contracts valued in the millions or billions of dollars. Their history includes both successful implementations and, like many large contractors, occasional challenges related to project timelines or specific deliverables. The VA's award to IBM suggests they met the technical and financial requirements for this specific system.

How does this contract contribute to the VA's overall IT spending and mission?

This contract represents a specific investment within the VA's broader IT budget, focusing on a critical area of employee support and operational efficiency. The Safety and Workers' Compensation Information Management System directly supports the VA's mission by ensuring the well-being of its workforce, which is essential for delivering services to veterans. Efficient management of safety and compensation claims can reduce administrative overhead, improve employee morale, and potentially lower long-term healthcare and compensation costs. This IT expenditure is aligned with the government's ongoing efforts to modernize systems, enhance data management, and improve the overall employee experience within federal agencies.

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: $9,067,391

Exercised Options: $9,067,391

Current Obligation: $9,067,391

Actual Outlays: $5,355,106

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $934,636

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