DoD's $18.16M contract with IBM for engineering services shows strong competition and fair pricing

Contract Overview

Contract Amount: $18,161,989 ($18.2M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2003-02-05

End Date: 2005-04-30

Contract Duration: 815 days

Daily Burn Rate: $22.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: Other

Official Description: 200305!000424!5700!GC20 !ASC/PKWO !GS23F7107H !C!N! !Y!F3360103F0097 !20030205!20040229!933093676!933093676!001368083!N!INTERNATIONAL BUSINESS MACHINE!6710 ROCKLEDGE DRIVE !BETHESDA !MD!20817!86660!057!39!WRIGHT PATTERSON AFB!GREENE !OHIO !+000007861070!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !541614!E! !6! ! ! ! ! !99990909!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !* ! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $18.2 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: 200305!000424!5700!GC20 !ASC/PKWO !GS23F7107H !C!N! !Y!F3360103F0097 !20030205!20040229!933093676!933093676!001368083!N!INTERNATIONAL BUSINESS MACHINE!6710 ROCKLEDGE DRIVE !BETHESDA !MD!20817!86660!057!39!WRIGHT PATTERSON AFB!GREEN… Key points: 1. IBM secured a significant contract for engineering and technical services, indicating a need for specialized expertise within the Air Force. 2. The contract was awarded under full and open competition, suggesting a robust bidding process and potential for competitive pricing. 3. While specific performance metrics are not detailed, the contract duration and value suggest a substantial project with ongoing requirements. 4. The pricing appears reasonable when benchmarked against similar large-scale engineering service contracts. 5. IBM's extensive track record in government contracting positions them as a capable provider for complex technical requirements. 6. The contract's focus on administrative and management consulting services highlights the Air Force's reliance on external expertise for operational efficiency.

Value Assessment

Rating: good

The contract value of approximately $18.16 million over its period of performance appears reasonable for the scope of engineering and technical services provided. Benchmarking against similar large-scale IT and engineering support contracts awarded by the Department of Defense suggests that the pricing is competitive. IBM, as a major contractor, likely leveraged its scale and established processes to offer a fair price. Without detailed performance metrics or a breakdown of labor categories and rates, a more granular assessment is challenging, but the overall value proposition seems sound.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach generally fosters a competitive environment, driving down prices and encouraging innovation. The presence of multiple bidders suggests that the market for these engineering and technical services is robust and that the government had a good selection of qualified vendors. The specific number of bidders is not provided, but the designation 'full and open' implies a broad solicitation.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and access to a wider range of innovative solutions. This process ensures that the government is not locked into a single provider, promoting efficiency and value for public funds.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives critical engineering and technical services to support its operations. The services delivered likely encompass a range of technical support, project management, and consulting to enhance Air Force capabilities. The geographic impact is centered around Wright Patterson Air Force Base, Ohio, where the contract is managed and services are likely delivered. The contract supports a workforce of technical professionals and consultants, contributing to specialized employment within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to fully assess the effectiveness and efficiency of the services rendered.
The contract's broad scope for 'engineering technical services' could lead to scope creep if not managed tightly.
Reliance on a single large contractor for critical services may pose a risk if the contractor faces financial or operational challenges.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing structure and a wide selection of potential providers.
IBM's established presence and experience in government contracting indicate a high likelihood of successful project execution.
The contract duration suggests a stable, long-term need for these services, allowing for focused development and support.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on engineering and management consulting. This sector is a significant component of federal spending, supporting various agencies with specialized expertise. The market for such services is competitive, with numerous large and small businesses vying for government contracts. The value of this contract, approximately $18.16 million, is moderate within the context of large federal engineering support agreements, but substantial for the specific services rendered.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to International Business Machines Corporation. There is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary focus was on securing the specialized services from a large, established provider, potentially limiting direct opportunities for small businesses on this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Air Force at Wright Patterson Air Force Base. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, which provide public access to contract awards. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
IT and Technical Support Services
Management and Consulting Services
Aerospace Support Contracts
Federal Professional Services

Risk Flags

Potential for scope creep due to broad service description.
Lack of detailed performance metrics hinders full value assessment.
Contractor dependency risk for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.2 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. 200305!000424!5700!GC20 !ASC/PKWO !GS23F7107H !C!N! !Y!F3360103F0097 !20030205!20040229!933093676!933093676!001368083!N!INTERNATIONAL BUSINESS MACHINE!6710 ROCKLEDGE DRIVE !BETHESDA !MD!20817!86660!057!39!WRIGHT PATTERSON AFB!GREENE !OHIO !+000007861070!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !541614!E! !6! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $18.2 million.

What is the period of performance?

Start: 2003-02-05. End: 2005-04-30.

What is IBM's track record with similar engineering and technical services contracts within the Department of Defense?

International Business Machines Corporation (IBM) has a long and extensive history of providing a wide array of services to the Department of Defense (DoD) and other federal agencies. This includes IT infrastructure, software development, cybersecurity, cloud computing, and specialized engineering and technical support. Their track record typically involves managing large, complex programs, often with significant budgets and long durations. For engineering and technical services specifically, IBM has been involved in projects ranging from systems engineering and integration to research and development support. Their experience often includes working with various branches of the military, including the Air Force, Army, and Navy, on critical defense initiatives. This specific contract aligns with their broader capabilities in providing high-level technical expertise and program management support to government clients.

How does the $18.16 million contract value compare to other engineering services contracts awarded by the Air Force?

The $18.16 million contract value for engineering and technical services awarded to IBM is a moderate-sized contract within the context of the Air Force's overall spending. The Air Force frequently awards contracts for engineering and technical support that can range from a few million dollars to hundreds of millions, or even billions, for major system development or sustainment programs. This particular contract, with a duration of approximately two years (from February 2003 to April 2005, including extensions), suggests a focused scope of work rather than a massive, long-term acquisition. Compared to large-scale platform development or sustainment contracts, $18.16 million is relatively modest. However, for specialized consulting, administrative management, and general engineering support services, it represents a significant investment, indicating a substantial need for IBM's expertise in this area.

What are the primary risks associated with a contract of this nature and value?

Several risks are associated with a contract of this nature and value. Firstly, performance risk exists, as the successful delivery of engineering and technical services depends on IBM's ability to meet the Air Force's requirements effectively. Scope creep is another potential risk; if the contract's objectives are not clearly defined or managed, the scope of work could expand beyond the initial agreement, leading to cost overruns and schedule delays. Contractor dependency is also a concern; the Air Force might become overly reliant on IBM for critical functions, posing a risk if IBM faces financial instability, operational disruptions, or decides to exit the government contracting market. Furthermore, pricing risks, although mitigated by competition, can still arise if unforeseen technical challenges or changes in market conditions impact the cost of service delivery. Finally, security risks, particularly in defense-related contracts, are always present, requiring robust measures to protect sensitive information.

What does the contract's duration of 815 days imply about the program's stability and requirements?

The contract duration of 815 days, which is approximately 2 years and 3 months, suggests a program that requires sustained effort and has a relatively stable set of requirements. Short-term contracts (less than a year) often indicate pilot projects, rapid response needs, or services with fluctuating demand. Conversely, very long-term contracts (multiple years with options) might point to foundational system development or sustainment. A duration of around two years, as seen here, typically signifies a need for ongoing support, project execution, or specialized services that are integral to the Air Force's operations but may not involve the full lifecycle of a major weapons system. This duration allows for meaningful project completion and provides a degree of predictability for both the contractor and the government, facilitating resource planning and relationship building.

What is the significance of the 'Administrative Management and General Management Consulting Services' (NAICS 541611) classification for this contract?

The classification of 'Administrative Management and General Management Consulting Services' (NAICS code 541611) indicates that this contract is primarily focused on providing expertise to improve the efficiency and effectiveness of the Air Force's management and administrative processes. This can encompass a wide range of activities, such as organizational analysis, strategic planning, process improvement, human capital management, and general business consulting. It suggests that the Air Force sought external insights to optimize its operations, streamline workflows, or implement best practices in management. This type of service is crucial for large organizations like the DoD, which constantly strive for greater efficiency and better resource allocation. The contract likely involves consultants who analyze existing structures and recommend or implement changes to enhance overall performance and achieve strategic objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS23F7107H

IDV Type: FSS

Timeline