GSA's $12.4M IT consulting contract awarded to IBM for administrative management services

Contract Overview

Contract Amount: $12,408,916 ($12.4M)

Contractor: International Business Machines Corporation

Awarding Agency: General Services Administration

Start Date: 2008-02-15

End Date: 2008-11-30

Contract Duration: 289 days

Daily Burn Rate: $42.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COMPUTER SYSTEM

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301, UNITED STATES OF AMERICA

State: Colorado Government Spending

Plain-Language Summary

General Services Administration obligated $12.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: COMPUTER SYSTEM Key points: 1. Contract awarded to a single, large incumbent vendor. 2. Limited competition may have impacted price competitiveness. 3. Fixed-price contract type mitigates cost overrun risk. 4. Short performance period suggests a focused scope of work. 5. Administrative management consulting is a common federal service. 6. Contract value is moderate for IT consulting services.

Value Assessment

Rating: fair

The contract value of $12.4 million for approximately 9 months of service appears within a reasonable range for large-scale IT consulting. However, without specific deliverables or performance metrics, a precise value-for-money assessment is challenging. Benchmarking against similar administrative management consulting contracts awarded by GSA or other agencies would provide a clearer picture of whether the pricing was competitive, especially given the sole-source nature of the award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed broadly. While sole-source awards can be appropriate in specific circumstances, they typically limit the potential for competitive pricing and innovation. The absence of multiple bidders means the government did not benefit from a range of proposals and pricing structures that a full and open competition might have yielded.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as they forgo the potential savings that competition can drive. This limits the government's ability to secure the best possible price for the services rendered.

Public Impact

Federal agencies seeking administrative management and general management consulting services benefit from this contract. The services delivered likely support improved operational efficiency and strategic planning within the agency. The geographic impact is primarily within the agency's operational locations, likely nationwide. Workforce implications include the utilization of IBM's consulting expertise, potentially augmenting agency staff capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Lack of competition may reduce incentive for cost optimization by the contractor.
Short performance duration might indicate a specific, potentially urgent, need rather than a long-term strategic engagement.

Positive Signals

Award to a large, established contractor like IBM suggests a degree of confidence in their capabilities.
Firm fixed-price contract type provides cost certainty for the government.
The contract falls under a common NAICS code for administrative management consulting, indicating a standard service offering.

Sector Analysis

This contract falls within the Information Technology (IT) and professional services sector, specifically administrative management and general management consulting. The market for these services is vast, with numerous large and small businesses offering expertise. Federal spending in this area is substantial, supporting agency operations, strategic planning, and process improvements. Benchmarks for similar IT consulting services vary widely based on scope, duration, and contractor expertise, but a $12.4 million contract for a 9-month period is a significant award.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award to a large corporation like IBM suggests that subcontracting opportunities for small businesses may be limited or dependent on IBM's internal policies. Without specific subcontracting plans detailed in the award, the direct impact on the small business ecosystem is likely minimal, though indirect benefits could arise if IBM utilizes small business partners for specific tasks.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the General Services Administration (GSA). Performance monitoring and acceptance of deliverables would be key accountability measures. Transparency is generally facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Professional Services
Management and Consulting Services
General Services Administration Contracts
Large Business Prime Contracts

Risk Flags

Sole Source Award
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $12.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. COMPUTER SYSTEM

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 $12.4 million.

What is the period of performance?

Start: 2008-02-15. End: 2008-11-30.

What specific administrative management and general management consulting services were provided under this contract?

The provided data indicates the contract falls under NAICS code 541611, 'Administrative Management and General Management Consulting Services.' This broad category encompasses a wide range of activities, including strategic planning, organizational design, process improvement, performance management, and executive-level advisory services. Without access to the contract's statement of work (SOW), the precise nature of the services rendered remains unspecified. However, typical engagements involve helping federal agencies improve efficiency, effectiveness, and overall management of their operations, often focusing on policy implementation, organizational restructuring, or the adoption of best practices in management.

How does the $12.4 million award compare to typical spending on similar IT consulting contracts by the GSA?

The $12.4 million award for a contract with a duration of approximately 9 months (February 15, 2008, to November 30, 2008) represents a substantial investment. GSA awards a wide range of IT and management consulting contracts, with values varying significantly based on scope, duration, and complexity. While this figure is not exceptionally large in the context of major IT modernization projects, it is a significant amount for administrative management consulting over a less-than-one-year period. Benchmarking against other GSA contracts under NAICS 541611 during that fiscal year would provide more precise context on whether this represented a high, average, or low value for the services procured.

What are the potential risks associated with a sole-source award for IT consulting services?

Sole-source awards, like the one to IBM in this case, carry inherent risks. The primary risk is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to deliver maximum value or innovate. Without competing proposals, the government may not be securing the most cost-effective solution or the best available expertise. There's also a risk that the agency's specific needs might be better met by a different vendor whose capabilities were not explored due to the sole-source nature of the procurement. This can limit the government's options and potentially lead to suboptimal outcomes or higher long-term costs.

What was IBM's track record with the GSA prior to this contract award?

The data indicates that International Business Machines Corporation (IBM) was awarded this contract by the General Services Administration (GSA). While specific prior contract history with GSA is not detailed in the provided snippet, IBM is a major federal contractor with a long history of providing a wide array of IT and professional services across numerous government agencies, including GSA. Their extensive experience suggests a substantial portfolio of past performance, which likely played a role in their selection, even under a sole-source justification. A deeper dive into FPDS or other federal procurement databases would reveal the full extent of their prior engagements with GSA and other agencies.

How does the firm fixed-price contract type influence risk for this IT consulting engagement?

The 'Firm Fixed Price' (FFP) contract type is generally considered advantageous for the government as it shifts most of the cost risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs incurred. This provides budget certainty for the agency and incentivizes the contractor to manage their costs efficiently. For an IT consulting engagement like this, where the scope of work is likely well-defined, FFP helps prevent cost overruns that could occur with cost-reimbursement contracts. The primary risk for the contractor is underestimating costs, while the government's main risk is ensuring the contractor doesn't cut corners to maintain profitability.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 4QCF97084114

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,408,916

Exercised Options: $12,408,916

Current Obligation: $12,408,916

Parent Contract

Parent Award PIID: 2003J289400000

IDV Type: IDC

Timeline