GSA's $58M IT Operations Support Contract Awarded to IBM Under Full and Open Competition

Contract Overview

Contract Amount: $58,073,688 ($58.1M)

Contractor: International Business Machines Corporation

Awarding Agency: General Services Administration

Start Date: 2010-02-03

End Date: 2014-08-14

Contract Duration: 1,653 days

Daily Burn Rate: $35.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ARCHITECTURE AND OPERATIONS SUPPORT CONTRACT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $58.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: ARCHITECTURE AND OPERATIONS SUPPORT CONTRACT Key points: 1. Contract awarded for IT architecture and operations support services. 2. IBM secured the contract through a full and open competition process. 3. The contract duration spans over 1600 days, indicating a significant long-term engagement. 4. The fixed-price contract type suggests a defined scope and predictable costs for the government. 5. The award was made by the General Services Administration's Federal Acquisition Service. 6. The North American Industry Classification System (NAICS) code indicates services related to computer systems design and related services.

Value Assessment

Rating: good

The contract value of approximately $58 million over its period of performance represents a substantial investment in IT support. Benchmarking this against similar large-scale IT operations and architecture support contracts would be necessary for a precise value-for-money assessment. However, the firm-fixed-price structure generally aims to provide cost certainty. Without specific performance metrics or comparison data for the services rendered, a definitive value assessment is challenging, but the competitive award process suggests an effort to secure fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit offers. The presence of 3 bidders indicates a moderate level of competition for this significant IT support requirement. A higher number of bidders might typically drive prices lower, but the fixed-price nature of the contract and the specialized nature of the services could influence the bidding landscape.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the pool of potential offerors, fostering a competitive environment that can lead to better pricing and service quality.

Public Impact

Federal agencies, particularly those utilizing GSA's Federal Acquisition Service, benefit from enhanced IT infrastructure and operational support. The contract supports critical IT architecture and operations, ensuring the smooth functioning of government digital services. The primary geographic impact is within the District of Columbia, where the contract was awarded. The contract likely supports a workforce involved in IT services, potentially including system administrators, architects, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in given the long contract duration and specialized nature of IT operations support.
Risk of cost overruns if the fixed-price contract does not adequately account for unforeseen technical challenges or scope creep.
Dependence on a single contractor (IBM) for critical IT functions could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type provides cost predictability for the government.
IBM is a large, established technology provider with a track record in government contracting.
The contract duration indicates a sustained need for these services, suggesting ongoing importance.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on IT services, including computer systems design and related services. The market for IT operations and architecture support is highly competitive, with numerous large and small businesses offering specialized expertise. Government spending in this area is substantial, driven by the need to modernize legacy systems, enhance cybersecurity, and improve the efficiency of digital services. Comparable spending benchmarks would typically involve analyzing other large IT support contracts awarded by agencies like GSA, DOD, or civilian departments for similar scope and duration.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large corporation like IBM suggests that the primary focus was on technical capability and price for a large-scale requirement. This means that opportunities for small businesses to directly participate in this specific contract may be limited, although they might be involved indirectly through IBM's supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the General Services Administration (GSA). Performance monitoring, adherence to contract terms, and financial accountability are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
Cybersecurity Support Services
Enterprise Resource Planning (ERP) Implementation

Risk Flags

Long contract duration may lead to price inflexibility.
Firm-fixed-price contracts can pose risks if scope changes significantly.
Dependence on a single large contractor for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $58.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. ARCHITECTURE AND OPERATIONS SUPPORT CONTRACT

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 $58.1 million.

What is the period of performance?

Start: 2010-02-03. End: 2014-08-14.

What is IBM's track record with similar IT operations and architecture support contracts with the federal government?

IBM has a long and extensive history of contracting with the U.S. federal government, providing a wide array of IT services, including operations support, systems integration, cloud services, and cybersecurity. They have held numerous large-scale contracts across various agencies such as the Department of Defense, NASA, and civilian agencies. Their track record generally includes experience with complex IT environments and large-scale deployments. However, like any large contractor, specific contract performance can vary, and detailed reviews of past performance on similar contracts would be necessary to fully assess their capabilities and reliability for this specific award. Publicly available data and past performance reviews would offer more granular insights into their success rates, adherence to schedules, and client satisfaction on comparable projects.

How does the per-unit cost or overall value of this contract compare to similar IT operations support contracts awarded by GSA or other agencies?

Directly comparing the per-unit cost or overall value of this $58 million contract without detailed service level agreements (SLAs), specific deliverables, and the exact period of performance breakdown is challenging. However, the contract's value is substantial, reflecting a significant commitment to IT operations and architecture support over its duration. To benchmark effectively, one would need to identify comparable contracts awarded by GSA or other agencies for similar IT support services, considering factors like the number of users supported, the complexity of the IT environment, and the specific services provided (e.g., network management, system administration, help desk, cybersecurity operations). The firm-fixed-price nature suggests an effort to control costs, but the true value is realized through effective service delivery and meeting performance objectives.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has IBM performed against them?

The provided data does not specify the key performance indicators (KPIs) established for this contract. Typically, for IT operations and architecture support, KPIs might include system uptime percentages, response times for service requests, incident resolution rates, security compliance metrics, and successful implementation of architectural changes. Performance against these KPIs would be detailed in contract performance reports, which are usually not publicly disclosed in full. GSA's Federal Acquisition Service would be responsible for monitoring IBM's performance against the contract's requirements and SLAs. Any significant deviations or failures to meet KPIs could lead to contract modifications, penalties, or termination, depending on the contract's terms.

What is the historical spending trend for IT architecture and operations support services by the General Services Administration?

The General Services Administration (GSA) is a major procurer of IT services for the federal government, consistently spending billions of dollars annually on various IT-related contracts. Historical spending trends for IT architecture and operations support services within GSA have generally shown an increasing trajectory, driven by the continuous need for modernization, digital transformation initiatives, and the expansion of government IT infrastructure. GSA's Federal Acquisition Service (FAS) plays a crucial role in consolidating and managing these procurements. Analyzing GSA's IT spending reports over the past decade would reveal significant investments in areas like cloud computing, cybersecurity, data center consolidation, and IT modernization, with operations and architecture support being foundational components of these efforts.

What are the potential risks associated with a long-term, firm-fixed-price contract for IT operations support, and how are they mitigated?

Long-term, firm-fixed-price contracts for IT operations support carry inherent risks. For the government, a primary risk is that the fixed price might become uncompetitive over time if market rates decrease or if the scope of work evolves significantly, potentially leading to the contractor overcharging for services. Conversely, the contractor bears the risk of cost overruns if unforeseen technical challenges arise or if the scope expands without a corresponding price adjustment. Mitigation strategies include robust initial scope definition, clear performance standards, regular contract reviews, and incorporating mechanisms for equitable adjustments if significant changes occur. GSA's oversight, including performance monitoring and potentially market research during the contract's life, helps manage these risks to ensure continued value for taxpayer money.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $112,868,504

Exercised Options: $58,449,512

Current Obligation: $58,073,688

Contract Characteristics

Cost or Pricing Data: NO

Timeline