IBM awarded $13.8M GSA order for computer systems design services, with a 3-year term

Contract Overview

Contract Amount: $13,868,635 ($13.9M)

Contractor: International Business Machines Corporation

Awarding Agency: General Services Administration

Start Date: 2024-01-28

End Date: 2027-01-27

Contract Duration: 1,095 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GSA ORDER MANAGEMENT FOR REQUISITIONS (GOMR) IN ACCORDANCE WITH THE FORMAT IN FAR SUBPART 16.5.

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $13.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: GSA ORDER MANAGEMENT FOR REQUISITIONS (GOMR) IN ACCORDANCE WITH THE FORMAT IN FAR SUBPART 16.5. Key points: 1. The contract value represents a moderate investment in IT support services for the GSA. 2. IBM's selection suggests a reliance on established vendors for critical IT infrastructure. 3. The firm-fixed-price structure aims to control costs, but requires careful scope management. 4. Performance is benchmarked against similar IT services contracts within the federal government. 5. This contract falls within the broader category of IT services procurement for federal agencies. 6. The duration of the order suggests a need for sustained support rather than short-term projects.

Value Assessment

Rating: good

The contract value of approximately $13.8 million over three years for computer systems design services appears reasonable when considering the scope of support typically provided by large IT firms like IBM to federal agencies. Benchmarking against similar GSA orders for IT services suggests that this pricing is within the expected range for a firm of IBM's size and capability. The firm-fixed-price contract type provides cost certainty for the government, assuming the scope of work is well-defined and managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the full and open nature suggests a competitive process that should have driven pricing towards market rates. This approach is generally favored for ensuring the government receives the best value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services, ensuring that federal funds are used efficiently.

Public Impact

Federal agencies utilizing GSA's IT support services will benefit from the continued availability of computer systems design expertise. The services delivered will likely encompass system design, integration, and potentially maintenance, ensuring operational continuity. The geographic impact is national, as GSA serves agencies across the United States. The contract supports a workforce of IT professionals employed by IBM, contributing to the IT sector's employment landscape.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not precisely defined and managed.
Reliance on a single large contractor could limit flexibility in adapting to rapidly changing technological needs.
Ensuring ongoing value for money throughout the contract's duration requires diligent oversight.

Positive Signals

IBM is a well-established IT provider with a proven track record in government contracting.
The firm-fixed-price contract provides cost predictability for the GSA.
Full and open competition suggests a robust selection process aimed at securing best value.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. This sector is a significant component of federal IT spending, encompassing a wide range of services from software development to infrastructure management. Federal agencies increasingly rely on specialized IT services to maintain and modernize their operations. Comparable spending benchmarks in this area are often measured by the total IT budget allocated by agencies and the average cost of IT support contracts.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means that the primary contract is with a large business, and opportunities for small businesses would likely be through subcontracting if IBM chooses to engage them. The impact on the small business ecosystem is minimal unless IBM actively incorporates them into its supply chain for this specific order.

Oversight & Accountability

Oversight for this GSA order would typically be managed by the contracting officer and the program office responsible for the IT services. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

GSA IT Schedule 70
IT Professional Services
Computer Systems Design and Related Services
Federal Civilian IT Spending

Risk Flags

Potential for vendor lock-in
Risk of scope creep
Technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $13.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. GSA ORDER MANAGEMENT FOR REQUISITIONS (GOMR) IN ACCORDANCE WITH THE FORMAT IN FAR SUBPART 16.5.

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2024-01-28. End: 2027-01-27.

What is IBM's track record with GSA for similar IT services contracts?

IBM has a long-standing relationship with the General Services Administration (GSA) and has been awarded numerous contracts for a wide array of IT services over the years. These contracts often fall under GSA's IT Schedule vehicles, which are designed to streamline procurement for federal agencies. IBM's history with GSA indicates a capacity to deliver complex IT solutions and manage large-scale projects. Analyzing past performance data, including any reported issues or successes, would provide a more granular understanding of their reliability and effectiveness in fulfilling similar computer systems design and related service requirements. The consistent awarding of contracts suggests a generally positive performance history, though specific details of past delivery and client satisfaction would require deeper investigation into GSA's contract performance databases and any available CPARS (Contractor Performance Assessment Reporting System) reports.

How does the awarded amount compare to other GSA orders for computer systems design services?

The awarded amount of approximately $13.8 million over three years for computer systems design services places this contract in the mid-range for federal IT procurements of this nature. GSA, through its various schedules and contract vehicles, facilitates a wide spectrum of IT services, with contract values ranging from tens of thousands to hundreds of millions of dollars. Orders for specialized computer systems design, particularly those involving large-scale integration or complex software development, can easily reach or exceed this figure. When compared to similar delivery orders issued under GSA's IT Schedule 70 (now IT Professional Services), this contract's value is consistent with procurements for established vendors like IBM providing comprehensive IT support. However, without specific details on the exact scope of services, a precise value-for-money assessment relative to peers is challenging.

What are the primary risks associated with this contract for the government?

The primary risks associated with this contract revolve around potential cost overruns if the scope of work is not meticulously managed, vendor lock-in if the services become deeply integrated into GSA's operations without clear exit strategies, and performance issues if IBM fails to meet the defined service levels. Given the firm-fixed-price nature, the risk of cost escalation is primarily on the contractor, but poorly defined requirements can lead to disputes or the need for costly modifications. There's also a risk related to the rapid pace of technological change; the services provided might become outdated before the contract term ends, requiring additional investment or renegotiation. Ensuring continuous oversight and clear communication channels will be crucial to mitigating these risks and ensuring the government receives the intended value.

How effective is the firm-fixed-price contract type in managing costs for this type of service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and unlikely to change significantly. For computer systems design services, FFP provides cost certainty for the government, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage their resources efficiently and control expenses. However, the effectiveness hinges on the clarity and completeness of the contract's Statement of Work (SOW). If the SOW is ambiguous or if unforeseen technical challenges arise, the FFP structure can lead to change order negotiations, which may increase the overall cost and administrative burden. For complex IT projects, a hybrid approach or a cost-plus contract might sometimes offer more flexibility, but FFP is often preferred for its budgetary predictability when requirements are stable.

What is the historical spending pattern for computer systems design services at GSA?

GSA's historical spending on computer systems design services has been substantial and generally follows trends in federal IT modernization and support needs. Over the years, GSA has utilized various contract vehicles, including its IT Schedules, to procure these services. Spending patterns are influenced by agency-wide initiatives, cybersecurity requirements, cloud migration efforts, and the need to maintain legacy systems. While specific historical figures for this exact order type are not detailed here, GSA consistently allocates significant portions of its budget to IT services, including design, development, integration, and maintenance. Analyzing broader GSA IT spending reports and contract award data would reveal trends in the types of services procured, the dominant contractors, and the average contract values over time, indicating a sustained demand for these capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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

Solicitation ID: QTA0016JCA0003

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: $79,094,448

Exercised Options: $17,299,931

Current Obligation: $13,868,635

Actual Outlays: $4,867,133

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCK18D0014

IDV Type: GWAC

Timeline