VA awards $79.4M IBM contract for logical follow-on task order, extending computing infrastructure services
Contract Overview
Contract Amount: $79,418,886 ($79.4M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Veterans Affairs
Start Date: 2021-09-30
End Date: 2023-09-29
Contract Duration: 729 days
Daily Burn Rate: $108.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: LOGICAL FOLLOW-ON TASK ORDER FOR ADDITIONAL PRESUMPTIVE .
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817
State: Maryland Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $79.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: LOGICAL FOLLOW-ON TASK ORDER FOR ADDITIONAL PRESUMPTIVE . Key points: 1. The contract is a logical follow-on, suggesting continuity and potentially limited new competition. 2. IBM is a major player in IT services, indicating significant market presence. 3. The contract's value is substantial, requiring careful oversight for taxpayer value. 4. The sector is IT services, a critical area for government operations.
Value Assessment
Rating: good
The contract value of $79.4M over two years appears reasonable for comprehensive IT infrastructure services provided by a major vendor like IBM. Benchmarking against similar large-scale managed services contracts 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, which is positive for price discovery. However, as a 'logical follow-on task order,' the competitive landscape might have been influenced by prior contract performance.
Taxpayer Impact: The substantial award necessitates efficient service delivery to ensure taxpayer funds are used effectively for critical IT infrastructure.
Public Impact
Ensures continued operation of essential IT infrastructure for the VA. Supports veterans' access to healthcare and benefits through reliable technology. Maintains critical data processing and hosting services for the department.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in due to follow-on nature.
- Reliance on a single large vendor for critical infrastructure.
Positive Signals
- Awarded through full and open competition.
- Long-term contract provides stability for services.
Sector Analysis
This contract falls within the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services sector. Spending in this area is consistently high across federal agencies due to the increasing reliance on digital services and data management.
Small Business Impact
The contract was awarded to IBM, a large business. There is no explicit mention of small business participation in this specific award, which could be an area for future consideration in subcontracting opportunities.
Oversight & Accountability
The Department of Veterans Affairs is responsible for oversight. Given the contract's value and critical nature, regular performance reviews and audits are essential to ensure accountability and value for money.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- Potential for cost overruns if scope creep occurs.
- Dependence on a single vendor for critical services.
- Risk of service degradation if performance monitoring is inadequate.
- Limited opportunities for small business prime contracting.
Tags
computing-infrastructure-providers-data-, department-of-veterans-affairs, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $79.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. LOGICAL FOLLOW-ON TASK ORDER FOR ADDITIONAL PRESUMPTIVE .
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 $79.4 million.
What is the period of performance?
Start: 2021-09-30. End: 2023-09-29.
How does the pricing compare to industry benchmarks for similar managed IT infrastructure services?
A detailed comparison requires access to specific service level agreements and performance metrics. However, given IBM's market position and the scope of services, the pricing is likely competitive within the enterprise IT services market. Further analysis would involve benchmarking against contracts with similar scope, duration, and vendor capabilities.
What are the risks associated with a 'logical follow-on' task order in terms of competition and innovation?
Logical follow-on orders can sometimes limit new competitive entrants and may reduce pressure for innovation if the incumbent vendor is not actively incentivized. While this award was under full and open competition, the 'follow-on' aspect suggests a pre-existing relationship, potentially influencing the bidding environment and the introduction of novel solutions.
What is the expected impact on VA's operational effectiveness and efficiency from this contract?
This contract is expected to ensure the continued, reliable operation of critical IT infrastructure, directly supporting the VA's mission delivery. By securing these services through a follow-on order, the VA likely avoids disruption and maintains the technological backbone necessary for its operations, thereby enhancing overall effectiveness.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
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: 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: $109,777,359
Exercised Options: $79,418,886
Current Obligation: $79,418,886
Actual Outlays: $79,149,142
Subaward Activity
Number of Subawards: 28
Total Subaward Amount: $6,614,865
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 36C10E19D0018
IDV Type: IDC
Timeline
Start Date: 2021-09-30
Current End Date: 2023-09-29
Potential End Date: 2023-09-29 00:00:00
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 Veterans Affairs Contracts
- CCN Region 3 Express Report — $5.2B (Optum Public Sector Solutions, Inc.)
- Express Report for FY22 Region 2 — $5.1B (Optum Public Sector Solutions, Inc.)
- Fiscal Year 2022 Express Report for Region 1 — $4.2B (Optum Public Sector Solutions, Inc.)
- Express Report for the Patient Centered Community Care (PC3) Contract — $3.3B (Triwest Healthcare Alliance Corp)
- CCN Region Three FY21 Express Report — $3.1B (Optum Public Sector Solutions, Inc.)