IBM awarded $110.8M task order for HR management consulting by GSA

Contract Overview

Contract Amount: $110,857,428 ($110.9M)

Contractor: International Business Machines Corporation

Awarding Agency: General Services Administration

Start Date: 2016-11-18

End Date: 2026-11-17

Contract Duration: 3,651 days

Daily Burn Rate: $30.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF - AWARD OF TASK ORDER TO SUPPORT GSA OFFICE OF HUMAN RESOURCE MANAGEMENT.

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95113

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $110.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF - AWARD OF TASK ORDER TO SUPPORT GSA OFFICE OF HUMAN RESOURCE MANAGEMENT. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for administrative management and general management consulting services. 3. A firm-fixed-price contract type indicates that the price is set regardless of the actual costs incurred. 4. The duration of the contract is over 10 years, suggesting a long-term need for these services. 5. The task order was awarded to a single contractor, IBM. 6. The contract is not set aside for small businesses.

Value Assessment

Rating: fair

The contract value of $110.8 million over approximately 10 years averages to about $11 million annually. Without specific performance metrics or deliverables, it is difficult to benchmark the value for money. However, for large-scale, long-term consulting services, this annual figure may fall within a reasonable range, though a detailed cost-benefit analysis would be needed for a definitive assessment. The firm-fixed-price structure shifts risk to the contractor, which can be beneficial for the government if 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 all responsible sources were permitted to submit a bid. The data shows 2 bids were received. While the number of bidders is low, the 'full and open' designation suggests an attempt to maximize competition. The limited number of bids could imply a specialized service or a limited pool of qualified contractors, potentially impacting price discovery.

Taxpayer Impact: A competitive process, even with a low number of bids, generally provides better price discovery for taxpayers than a sole-source award. However, further analysis would be needed to determine if the pricing reflects optimal market value given the limited competition.

Public Impact

The General Services Administration (GSA) office of Human Resource Management is the primary beneficiary, receiving consulting services. The services provided are administrative management and general management consulting, aimed at improving HR operations. The contract's geographic impact is likely national, given GSA's role, though specific locations for service delivery are not detailed. The contract supports the federal workforce by potentially improving HR processes and efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bids received (2) despite full and open competition, raising questions about the breadth of market engagement.
Long contract duration (over 10 years) could lead to potential cost inefficiencies if needs change or technology evolves significantly.

Positive Signals

Awarded under full and open competition, which is generally a positive indicator for market-based pricing.
Firm-fixed-price contract type transfers cost overrun risk to the contractor.
The contract supports a critical function (HR management) within a major federal agency (GSA).

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This sector is a significant part of federal contracting, with agencies frequently seeking external expertise to improve operations, efficiency, and strategic planning. Comparable spending benchmarks for management consulting services vary widely based on scope, duration, and contractor expertise, but large, multi-year engagements like this represent substantial investments.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are limited unless they are part of a larger bid or subcontracting plan not detailed here. The absence of small business set-asides in this large contract does not necessarily reflect the overall small business utilization across GSA, but it does mean this particular award does not directly contribute to small business contracting goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the GSA Office of Human Resource Management. The firm-fixed-price nature of the contract implies that performance monitoring is key to ensuring value. Transparency is facilitated by the public nature of federal contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

GSA Federal Acquisition Service Contracts
Administrative Management and General Management Consulting Services
Human Resource Management Support Contracts
Federal IT and Management Consulting Spending

Risk Flags

Long contract duration may increase risk of obsolescence or changing needs.
Limited number of bidders (2) despite full and open competition.
Firm-fixed-price contract requires careful performance monitoring to ensure value.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $110.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF - AWARD OF TASK ORDER TO SUPPORT GSA OFFICE OF HUMAN RESOURCE MANAGEMENT.

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 $110.9 million.

What is the period of performance?

Start: 2016-11-18. End: 2026-11-17.

What is the track record of International Business Machines Corporation (IBM) in performing similar federal consulting contracts?

IBM has a long and extensive history of performing federal consulting contracts across various agencies and service areas, including management consulting, IT services, and administrative support. Their track record generally includes large, complex engagements. Specific to HR management consulting, IBM has been involved in numerous projects aimed at modernizing HR systems, improving workforce analytics, and streamlining HR processes for federal entities. While specific performance ratings for individual contracts are not publicly detailed in this summary, IBM's status as a major federal contractor suggests a capacity to handle significant work. However, like any large contractor, past performance can vary, and a deeper dive into specific contract performance data and past performance reviews would be necessary for a comprehensive assessment.

How does the awarded price compare to market rates for similar consulting services?

Benchmarking the $110.8 million price tag for this 10-year contract against market rates is challenging without detailed service descriptions and deliverables. The average annual cost of approximately $11 million for administrative and management consulting services for a large agency like GSA's HR office is substantial. Market rates for high-level consulting can range significantly, from hundreds to thousands of dollars per hour per consultant, depending on expertise and firm. Given the firm-fixed-price nature, the government has locked in a price. To assess value, one would need to compare the scope of work, expected outcomes, and the level of expertise required against industry standards and pricing models for comparable federal or large commercial consulting engagements. The limited number of bids (2) could suggest that the price might be at the higher end if the market for such specialized, long-term services is constrained.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include scope creep, contractor underperformance, and technological obsolescence over the long contract duration. Scope creep is mitigated by the firm-fixed-price structure, which disincentivizes the government from expanding the scope without a formal modification and potential price adjustment. Contractor underperformance is managed through contract oversight, performance monitoring, and defined deliverables. Technological obsolescence is a significant risk for a 10-year contract; mitigation would rely on IBM's ability to adapt its solutions and GSA's flexibility in incorporating new technologies through contract modifications or future procurements. The limited competition also presents a risk of suboptimal pricing or reduced innovation.

What is the expected effectiveness of these consulting services in improving GSA's HR operations?

The effectiveness hinges on the specific objectives outlined in the task order and the quality of IBM's execution. Consulting services in HR management typically aim to improve efficiency, reduce costs, enhance employee experience, ensure compliance, and support strategic workforce planning. If IBM delivers on its contractual obligations, GSA's HR operations could see benefits such as modernized HR systems, better data analytics for decision-making, streamlined recruitment and retention processes, and improved employee services. The long duration suggests an expectation of significant, sustained improvements. However, effectiveness is ultimately measured by achieving predefined performance metrics and realizing the intended strategic HR outcomes.

How does this contract's spending compare to historical patterns for similar services within GSA or other federal agencies?

Historical spending data for similar administrative and management consulting services within GSA and other federal agencies would provide context. GSA, as a central service provider, often procures extensive consulting support for its own operations and for agencies it serves. Large, multi-year contracts for management consulting are common across the federal government. Without specific historical data points for GSA's HR consulting needs or comparable agency procurements, it's difficult to definitively state if $110.8 million over 10 years is high or low. However, agencies frequently spend tens to hundreds of millions of dollars on large-scale consulting engagements to address complex management and operational challenges.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

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, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $132,796,408

Exercised Options: $127,662,331

Current Obligation: $110,857,428

Actual Outlays: $-526

Subaward Activity

Number of Subawards: 344

Total Subaward Amount: $66,538,424

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS02F0036U

IDV Type: FSS

Timeline