DoD's $29M IBM Self-Checkout Contract Raises Questions on Value and Competition

Contract Overview

Contract Amount: $28,961,280 ($29.0M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2018-07-01

End Date: 2021-06-30

Contract Duration: 1,095 days

Daily Burn Rate: $26.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF - SELF CHECK OUT SCO - CONUS

Place of Performance

Location: FORT LEE, PRINCE GEORGE County, VIRGINIA, 23801

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF - SELF CHECK OUT SCO - CONUS Key points: 1. The contract awarded to IBM for self-checkout services represents a significant expenditure. 2. IBM is a major player, but the limited competition details warrant scrutiny. 3. Potential risks include vendor lock-in and the effectiveness of the pricing strategy. 4. The IT sector context suggests a need for competitive benchmarking.

Value Assessment

Rating: questionable

The contract's value of $28.96 million over three years for 'Other Computer Related Services' needs further justification. Benchmarking against similar IT service contracts is crucial to determine if the pricing is competitive and reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Despite being awarded under 'Full and Open Competition,' the specific details of the bidding process and the number of bidders are not provided. This lack of transparency can obscure whether true price discovery occurred, potentially impacting the final negotiated price.

Taxpayer Impact: Taxpayer funds are being utilized for this contract. Ensuring competitive pricing and effective service delivery is paramount to maximizing the value of this investment.

Public Impact

Impacts the Department of Defense's IT infrastructure and operational efficiency. Potential for improved user experience through self-checkout technology. Raises questions about the long-term cost-effectiveness of this specific solution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition metrics
Unclear value proposition for the cost
Potential for vendor lock-in with IBM

Positive Signals

Utilizes established technology (self-checkout)
Contract awarded to a reputable IT vendor

Sector Analysis

This contract falls within the Information Technology sector, specifically 'Other Computer Related Services.' Spending benchmarks in this area often focus on the efficiency gains and cost savings derived from automation and streamlined processes.

Small Business Impact

The contract does not indicate any specific provisions or set-asides for small businesses. Analysis should explore whether opportunities were missed for small business participation in this IT service procurement.

Oversight & Accountability

Oversight by the Defense Information Systems Agency (DISA) is noted. Further examination of performance metrics, quality assurance, and any post-award reviews would be beneficial to ensure accountability.

Related Government Programs

Other Computer Related Services
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Lack of detailed competition data
Unclear value for money assessment
Potential for higher costs due to limited vendor options
Need for robust performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF - SELF CHECK OUT SCO - CONUS

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 (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2018-07-01. End: 2021-06-30.

What specific performance metrics were used to evaluate IBM's self-checkout services against the contract's objectives?

The provided data does not detail specific performance metrics. A thorough review would require access to the contract's statement of work and any associated performance work statements. These metrics are crucial for assessing whether IBM met its contractual obligations and delivered the expected value for the $28.96 million expenditure.

How does the per-unit cost of this self-checkout solution compare to industry standards or alternative service providers?

A direct per-unit cost benchmark is not available from the provided data. To assess value, a comparative analysis against similar self-checkout system implementations in both government and commercial sectors is necessary. This would involve examining installation, maintenance, and operational costs over the contract's duration.

What is the projected long-term cost savings or efficiency gain for the DoD resulting from this contract?

The data does not explicitly state projected long-term cost savings or efficiency gains. The justification for the $28.96 million expenditure should clearly articulate these benefits. Without this information, it is difficult to definitively assess the contract's effectiveness in achieving its intended outcomes beyond the immediate service provision.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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: HC102815R0025

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

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

Financial Breakdown

Contract Ceiling: $28,961,280

Exercised Options: $28,961,280

Current Obligation: $28,961,280

Subaward Activity

Number of Subawards: 81

Total Subaward Amount: $10,314,334

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102816D0007

IDV Type: IDC

Timeline