DOE awards IBM $128M for IT services over 11 years, facing limited competition
Contract Overview
Contract Amount: $128,095,741 ($128.1M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Energy
Start Date: 2000-09-15
End Date: 2011-09-30
Contract Duration: 4,032 days
Daily Burn Rate: $31.8K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 51
Pricing Type: FIRM FIXED PRICE
Sector: IT
Place of Performance
Location: GERMANTOWN, MONTGOMERY County, MARYLAND, 20874
State: Maryland Government Spending
Plain-Language Summary
Department of Energy obligated $128.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: Key points: 1. Significant contract value of $128 million awarded to a single large vendor. 2. Limited competition raises questions about price discovery and potential overspending. 3. Long contract duration (11 years) may not reflect current market pricing. 4. IT services sector is competitive, suggesting more options might have been available.
Value Assessment
Rating: questionable
The contract value of $128 million over 11 years is substantial. Without specific per-unit cost data or comparison to similar contracts, it's difficult to definitively assess value. However, the limited competition and long duration raise concerns about whether the government secured the best possible pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded as a competitive delivery order, but the data indicates limited competition. This suggests that only a few vendors were considered or able to bid, potentially leading to higher prices than if a full and open competition had been conducted.
Taxpayer Impact: Limited competition can result in taxpayers paying more than necessary for goods and services, as the lack of robust bidding reduces pressure on vendors to offer the lowest prices.
Public Impact
Taxpayers may have overpaid due to limited competition on this large IT services contract. The long contract term could mean the government is locked into potentially outdated technology or pricing. Lack of transparency in the limited competition process hinders public understanding of the value received.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Long contract duration
- Lack of detailed cost breakdown
Positive Signals
- Awarded to a known IT provider
- Fixed price contract can offer cost certainty
Sector Analysis
This contract falls within the Information Technology sector, specifically computer and software stores. The IT services market is generally dynamic and competitive, with numerous vendors offering a wide range of solutions. Benchmarks for similar large-scale IT service contracts would be needed for a precise comparison.
Small Business Impact
The data indicates this contract was not awarded to small businesses. There is no information provided on whether small businesses had opportunities to participate as subcontractors.
Oversight & Accountability
The limited competition aspect warrants further oversight to ensure the Department of Energy received fair value. A review of the justification for limited competition and the pricing negotiation process would be beneficial.
Related Government Programs
- Computer and Software Stores
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Potential for overpayment due to limited competition.
- Risk of using outdated technology or services over an 11-year period.
- Lack of transparency regarding the competitive process.
- No clear indication of small business participation.
Tags
computer-and-software-stores, department-of-energy, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $128.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $128.1 million.
What is the period of performance?
Start: 2000-09-15. End: 2011-09-30.
What was the specific justification for limiting competition on this $128 million contract?
The justification for limited competition is crucial for understanding why a full and open process wasn't pursued. Potential reasons could include specialized requirements, existing infrastructure compatibility, or urgent needs. Without this information, it's difficult to assess if the government acted appropriately or missed opportunities for better pricing and innovation.
How does the per-unit cost of services under this contract compare to industry benchmarks for similar IT services during the contract period?
Comparing the per-unit costs to industry benchmarks is essential for evaluating value for money. If the contract's rates are significantly higher than market averages, it suggests potential overpayment. This analysis requires detailed service descriptions and access to market data from the 2000-2011 period.
What mechanisms were in place to ensure cost-effectiveness and performance throughout the 11-year contract duration?
Given the long duration, it's important to know if there were provisions for regular performance reviews, price adjustments based on market changes, or options to re-compete parts of the contract. These mechanisms help mitigate risks associated with technology obsolescence and ensure continued value delivery over time.
Industry Classification
NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Offers Received: 51
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $132,222,876
Exercised Options: $132,222,876
Current Obligation: $128,095,741
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS35F4984H
IDV Type: FSS
Timeline
Start Date: 2000-09-15
Current End Date: 2011-09-30
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2021-12-06
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