HUD's $20.8M IBM contract for accounting support spanned nearly a decade, ending in 2011

Contract Overview

Contract Amount: $20,780,325 ($20.8M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Housing and Urban Development

Start Date: 2002-08-08

End Date: 2011-09-29

Contract Duration: 3,339 days

Daily Burn Rate: $6.2K/day

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ACCOUNTING SUPPORT FOR INTERIM & YEAR-END CLOSINGS & FINANCIAL STATEMENT PREPARATION

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20410

State: District of Columbia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $20.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: ACCOUNTING SUPPORT FOR INTERIM & YEAR-END CLOSINGS & FINANCIAL STATEMENT PREPARATION Key points: 1. The contract provided essential accounting and financial statement preparation services. 2. IBM, a large established contractor, was awarded this significant contract. 3. The duration of the contract suggests a long-term need for these services. 4. The firm-fixed-price structure aimed to control costs over the contract period. 5. The contract was awarded by the Department of Housing and Urban Development (HUD). 6. Services were delivered in the District of Columbia.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service contracts from the same period. However, a nearly decade-long engagement for accounting support at this value suggests a consistent need and potentially a stable pricing arrangement. The firm-fixed-price nature indicates an attempt to manage cost predictability, but it's difficult to assess true value-for-money without knowing if the services met or exceeded expectations or if market rates for similar services changed significantly over the nine-year period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data does not specify the competition level for this contract. Without information on whether it was competed openly, through limited sources, or awarded sole-source, it's impossible to assess the dynamics of price discovery. A fully and openly competed contract typically leads to more competitive pricing for the government.

Taxpayer Impact: The level of competition directly impacts taxpayer value. Limited or sole-source awards may result in higher costs compared to those secured through robust competition.

Public Impact

The Department of Housing and Urban Development (HUD) benefited from consistent accounting and financial reporting services. This contract supported the financial integrity and operational efficiency of HUD. The services were delivered within the District of Columbia, impacting the local economy through IBM's operations. The contract ensured that HUD could meet its financial obligations and reporting requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding competition level prevents assessment of potential overpayment.
Contract duration of nearly 9 years could indicate a lack of market exploration for potentially better value.
No specific performance metrics are available to gauge the quality and efficiency of services rendered.

Positive Signals

IBM is a well-established contractor with extensive experience in government services.
The firm-fixed-price contract type provides cost certainty for the government.
The contract successfully supported critical financial functions for HUD over an extended period.

Sector Analysis

This contract falls within the professional services sector, specifically focusing on accounting and financial management. The market for such services is broad, encompassing numerous firms ranging from large corporations like IBM to specialized small businesses. Government spending in this area is consistent, driven by the need for accurate financial reporting and compliance across all agencies. Comparable spending benchmarks would typically involve analyzing other large federal contracts for similar accounting and financial advisory services.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large contract awarded to IBM, a major corporation, it is unlikely that significant subcontracting opportunities were mandated for small businesses, though IBM may have engaged them voluntarily. The absence of a small business set-aside suggests that the primary focus was on securing the required expertise from a large, capable provider.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract officers, program managers within HUD, and potentially the agency's Inspector General. The firm-fixed-price nature implies that the government's primary concern was the delivery of defined services at an agreed-upon cost. Transparency would depend on HUD's internal reporting and any public contract databases, but specific details on oversight activities are not provided.

Related Government Programs

Financial Management Services
Accounting Services
Audit Support
Federal Financial Reporting
Contractor Financial Services

Risk Flags

Long contract duration without clear re-competition points.
Lack of detailed performance metrics in summary data.
Competition level not specified, hindering value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $20.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. ACCOUNTING SUPPORT FOR INTERIM & YEAR-END CLOSINGS & FINANCIAL STATEMENT PREPARATION

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $20.8 million.

What is the period of performance?

Start: 2002-08-08. End: 2011-09-29.

What was the specific nature of the 'accounting support' provided by IBM?

The contract description indicates 'ACCOUNTING SUPPORT FOR INTERIM & YEAR-END CLOSINGS & FINANCIAL STATEMENT PREPARATION.' This suggests IBM's role involved assisting the Department of Housing and Urban Development (HUD) with the critical processes of closing its financial books at various intervals (interim and year-end) and compiling the official financial statements. This likely included tasks such as data reconciliation, journal entry processing, ensuring compliance with accounting standards (like Generally Accepted Accounting Principles - GAAP), and preparing the necessary documentation for audits and public reporting. The nearly nine-year duration implies these were ongoing, essential functions for HUD's financial operations.

How does the $20.8 million contract value compare to similar accounting support contracts?

Directly comparing the $20.8 million value of this IBM contract to similar accounting support contracts is difficult without more specific data points like the contract duration, scope of services, and the specific agency or function supported. However, for a contract spanning nearly nine years (from August 2002 to September 2011), $20.8 million averages to roughly $2.3 million per year. This figure is moderate for large federal contracts, especially those involving major IT and professional services firms like IBM. Many large federal agencies require substantial financial support, and contracts for comprehensive accounting and financial statement preparation can range from millions to tens of millions annually, depending on the agency's size and complexity.

What are the potential risks associated with a long-term contract like this?

A significant risk with long-term contracts, such as this nearly nine-year engagement, is the potential for cost inefficiencies or a lack of innovation. Over extended periods, market rates for services can change, and a fixed-price contract might not capture the most competitive pricing available later in its term. There's also a risk of vendor lock-in, where the incumbent contractor becomes deeply integrated into agency processes, making it difficult and costly to switch providers even if better options emerge. Furthermore, without regular re-competition, there's less pressure on the contractor to continually improve efficiency or offer cutting-edge solutions. Ensuring continued value requires robust performance monitoring and potential renegotiation or re-competition.

What does the contract award to IBM suggest about HUD's priorities at the time?

Awarding a contract of this magnitude and duration to a large, established firm like IBM suggests that HUD prioritized reliability, proven capability, and stability in its financial operations during the period of 2002-2011. IBM possesses a strong track record in providing complex IT and professional services to the federal government. This choice likely indicates that HUD needed a contractor capable of handling significant financial tasks consistently and without major disruption. It suggests that ensuring the accuracy and timeliness of financial closings and statement preparation was a high priority, and they opted for a known entity to meet these critical needs.

Were there any indications of performance issues or contract modifications during its term?

The provided data does not contain specific details regarding performance issues, disputes, or modifications to this contract. The data points available (like award amount, dates, contract type) are static. To determine if there were performance issues or modifications, one would need to access contract line item details, modification history, and potentially performance reviews or audit reports associated with this specific contract (Award ID: DCA). Without this deeper dive, we assume the contract proceeded as planned to its completion date.

How did this contract contribute to HUD's overall mission?

This contract directly supported HUD's mission by ensuring the integrity and transparency of its financial operations. Accurate accounting, timely interim and year-end closings, and reliable financial statement preparation are fundamental to good governance and accountability in any government agency. For HUD, which manages significant housing and community development programs, robust financial management is crucial for demonstrating responsible stewardship of taxpayer funds, facilitating budget execution, and providing clear financial information to Congress, the public, and stakeholders. The services provided by IBM were essential infrastructure for HUD's fiscal health and operational effectiveness.

Contractor Details

Address: 12902 FEDERAL SYSTEMS PARK DR., FAIRFAX, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,180,454

Exercised Options: $21,180,454

Current Obligation: $20,780,325

Contract Characteristics

Multi-Year Contract: Yes

Timeline