IBM awarded $24M contract for R&D in social sciences and humanities by HHS

Contract Overview

Contract Amount: $23,956,392 ($24.0M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2014-09-29

End Date: 2019-09-28

Contract Duration: 1,825 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF Key points: 1. Contract awarded to a single, large incumbent vendor, raising questions about competition. 2. The contract type, Cost Plus Fixed Fee, can lead to cost overruns if not managed tightly. 3. Performance period of five years suggests a long-term need for these research services. 4. The specific NAICS code (541720) indicates a focus on specialized research, not general services. 5. The contract was awarded via full and open competition, suggesting an initial intent for broad participation.

Value Assessment

Rating: fair

The contract value of $23.96 million over five years averages to approximately $4.8 million annually. Benchmarking this against similar R&D contracts in social sciences and humanities is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation. The fixed fee component provides some predictability, but the cost reimbursement aspect requires robust oversight to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit an offer. However, the data shows only two offers were received, and the award went to IBM. While competition was allowed, the low number of bids might suggest barriers to entry or a highly specialized market. Further analysis would be needed to understand why more potential bidders did not participate.

Taxpayer Impact: The use of full and open competition is generally positive for taxpayers as it aims to solicit the best possible offers. However, with only two bids received, the potential for significant price savings through robust competition may have been limited.

Public Impact

This contract supports research and development in social sciences and humanities, potentially benefiting academic institutions and policy makers. The services delivered are likely to be specialized research studies, data analysis, and reports contributing to a better understanding of societal issues. The geographic impact is not specified but likely national, given the nature of federal research funding. Workforce implications could include employment for researchers, analysts, and support staff within IBM and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not closely monitored.
Low number of bids (2) in a full and open competition may indicate limited market interest or high barriers to entry.
The specific R&D area (social sciences and humanities) might be less commercially driven, potentially impacting innovation incentives.

Positive Signals

Awarded through full and open competition, suggesting an effort to maximize potential offers.
The contract has a defined period of performance (5 years), allowing for structured project management.
IBM is a large, established contractor with a significant track record in government contracting.

Sector Analysis

The contract falls under the Research and Development in the Social Sciences and Humanities sector (NAICS 541720). This is a niche area within the broader R&D market, often characterized by long-term projects, specialized expertise, and funding driven by specific government policy objectives rather than immediate commercial returns. Comparable spending benchmarks are difficult to establish without more granular data on the specific research topics undertaken.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the award to a large corporation like IBM, the primary focus is likely on large-scale research capabilities. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data. The impact on the small business ecosystem for this specific contract is likely minimal unless IBM actively engages small businesses for specialized research support.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program managers within the Department of Health and Human Services (HHS). The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract databases like FPDS, though detailed research findings may be subject to confidentiality or publication policies. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

National Science Foundation (NSF) Research Grants
National Institutes of Health (NIH) Research Contracts
Department of Education Research Programs
Social Science Research Council (SSRC) Initiatives

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Low number of bids (2) in Full and Open Competition warrants scrutiny of market dynamics.
Potential for cost overruns inherent in CPFF contracts for R&D.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2014-09-29. End: 2019-09-28.

What specific research areas within social sciences and humanities were prioritized under this contract?

The provided data does not specify the exact research areas within social sciences and humanities covered by this contract. NAICS code 541720 broadly encompasses research and experimental development in social sciences and humanities. Typically, such contracts could involve studies on public health behaviors, socioeconomic trends, educational outcomes, policy analysis, or historical research relevant to HHS's mission. The Centers for Medicare and Medicaid Services (CMS), as the awarding agency, likely directed the research towards areas impacting healthcare access, quality, and cost, or understanding patient populations and healthcare system dynamics.

How does the $23.96 million contract value compare to typical R&D spending in social sciences and humanities by HHS?

Comparing the $23.96 million contract value requires context on HHS's overall R&D budget and historical spending patterns within the social sciences and humanities domain. While this amount represents a significant investment, it needs to be viewed relative to the agency's total research portfolio. Federal agencies often fund a wide range of research, from basic science to applied policy research. Without specific historical data for this NAICS code or similar research initiatives within HHS, it's difficult to definitively state if this contract is high or low. However, R&D contracts of this magnitude suggest a substantial, multi-year research effort.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D effort?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks, particularly for research and development where the scope and outcomes can be uncertain. The primary risk is that the contractor may not be sufficiently incentivized to control costs, as the government agrees to reimburse all allowable costs incurred. While the fixed fee provides a profit margin, the contractor could potentially incur higher costs to achieve the research objectives, leading to the government paying more than initially anticipated. Effective oversight, clear performance metrics, and robust cost accounting standards are crucial to mitigate these risks and ensure the government receives good value.

What was the rationale for awarding this contract to IBM, given the competition dynamics?

The rationale for awarding this contract to IBM, despite only two offers being received, likely stems from IBM's demonstrated capabilities, past performance, and potentially its proposed technical approach and price. In specialized R&D fields, a limited number of contractors may possess the specific expertise, infrastructure, and security clearances required. Even with full and open competition, if only a few entities can realistically meet the stringent requirements, the number of bids can be low. IBM, as a major technology and research corporation, likely presented a compelling offer that met or exceeded the government's technical and programmatic needs.

What is the expected impact of this contract on advancing knowledge in social sciences and humanities?

The expected impact of this contract on advancing knowledge hinges on the specific research objectives set by HHS and CMS. Contracts in social sciences and humanities R&D aim to generate new insights, data, and methodologies that can inform policy, improve public services, and deepen societal understanding. For example, research could lead to better models for predicting healthcare utilization, understanding patient adherence to treatment, or evaluating the effectiveness of public health interventions. The ultimate impact depends on the quality of the research conducted, the dissemination of findings, and their subsequent application by policymakers, practitioners, and the academic community.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 100 PHOENIX DR, ANN ARBOR, MI, 48108

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

Financial Breakdown

Contract Ceiling: $32,634,725

Exercised Options: $23,956,392

Current Obligation: $23,956,392

Actual Outlays: $22,163

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $8,384,632

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500201000025I

IDV Type: IDC

Timeline