DHS awards $88M for ADP backup and security services to IBM Credit LLC

Contract Overview

Contract Amount: $88,156,470 ($88.2M)

Contractor: IBM Credit LLC

Awarding Agency: Department of Homeland Security

Start Date: 2003-10-01

End Date: 2007-03-31

Contract Duration: 1,277 days

Daily Burn Rate: $69.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: ADP BACKUP AND SECURITY SERVICES

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $88.2 million to IBM CREDIT LLC for work described as: ADP BACKUP AND SECURITY SERVICES Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1277 days (approx. 3.5 years) indicates a medium-term need for these services. 3. The fixed-price contract with economic price adjustment aims to manage cost fluctuations. 4. Services provided fall under 'Other Computer Related Services', a broad category. 5. The award was made by U.S. Customs and Border Protection, a major component of DHS. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: fair

The total award amount of $88,156,470 for ADP backup and security services over approximately 3.5 years suggests a significant investment. Without specific performance metrics or detailed breakdowns of services rendered, a precise value-for-money assessment is challenging. Benchmarking against similar contracts for comprehensive data backup and cybersecurity solutions would be necessary to determine if the pricing is competitive. The fixed-price nature with economic price adjustment offers some cost control but also introduces potential for price increases.

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 bids. The presence of two bids suggests a moderate level of competition for this requirement. While two bidders participated, it is unclear if this represents the full extent of potential interest in the market for such services. A higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and services, potentially leading to cost savings and better quality.

Public Impact

The primary beneficiary is the Department of Homeland Security, specifically U.S. Customs and Border Protection, which receives essential data backup and security services. These services are critical for maintaining the operational continuity and data integrity of CBP's information systems. The geographic impact is likely national, supporting the widespread IT infrastructure of CBP. The contract supports IT professionals and cybersecurity experts, potentially including roles within IBM Credit LLC and any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the effectiveness and efficiency of the services provided.
The broad 'Other Computer Related Services' category could obscure the specific nature and criticality of the backup and security functions.
Economic price adjustments can lead to cost overruns if not carefully managed and monitored.

Positive Signals

Awarded through full and open competition, indicating a structured and potentially competitive procurement process.
The fixed-price contract structure provides a baseline cost certainty, with adjustments for economic factors.
The contract addresses critical IT infrastructure needs for a major federal agency (DHS).

Sector Analysis

The IT services sector, particularly data backup and cybersecurity, is a significant area of federal spending. This contract falls within the broader category of IT support services, which includes a wide range of activities from hardware maintenance to complex software development and security solutions. Federal agencies increasingly rely on robust data management and cybersecurity to protect sensitive information and ensure mission continuity. Spending in this area is driven by evolving threats, technological advancements, and the growing volume of digital data.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this particular award. However, larger prime contractors like IBM Credit LLC may engage small businesses for specialized support, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within U.S. Customs and Border Protection. Performance monitoring, invoice review, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS, which provide award details. The Inspector General for the Department of Homeland Security would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

DHS IT Modernization Programs
Federal Cybersecurity Initiatives
Data Center Consolidation Programs
Cloud Computing Services Contracts
Information Assurance Services

Risk Flags

Broad Service Classification
Potential for Cost Escalation (FP-EPA)
Limited Competition Indicated (2 Bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $88.2 million to IBM CREDIT LLC. ADP BACKUP AND SECURITY SERVICES

Who is the contractor on this award?

The obligated recipient is IBM CREDIT LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $88.2 million.

What is the period of performance?

Start: 2003-10-01. End: 2007-03-31.

What specific backup and security services are included under this contract?

The provided data classifies this contract under NAICS code 541519, 'Other Computer Related Services,' and the description is 'ADP BACKUP AND SECURITY SERVICES.' This broad classification suggests a range of services related to protecting and ensuring the availability of automated data processing (ADP) systems. These could encompass data backup and recovery solutions, disaster recovery planning, cybersecurity measures such as intrusion detection and prevention, vulnerability assessments, and potentially managed security services. However, without a more detailed statement of work or contract line item details, the precise scope of services remains general. Further analysis would require accessing the full contract documentation to understand the specific deliverables and technical requirements.

How does the $88 million award compare to similar federal contracts for data backup and security services?

Benchmarking this $88 million award requires comparing it to contracts of similar scope, duration, and service complexity within the federal government. The contract duration is approximately 3.5 years (1277 days). Federal spending on cybersecurity and data management is substantial, with numerous large-scale contracts awarded annually across various agencies. For instance, other agencies like the Department of Defense or the General Services Administration may award contracts in the tens or hundreds of millions for comprehensive IT security and data resilience solutions. A direct comparison would involve identifying contracts with similar NAICS codes (e.g., 541519, 541513, 541512) and service descriptions, considering factors like the number of users supported, data volume managed, and specific security certifications required. Without access to a detailed database of comparable contracts and their specific terms, it's difficult to definitively state if $88 million represents a high, low, or average cost for these services.

What is the track record of IBM Credit LLC in providing ADP backup and security services to the federal government?

IBM Credit LLC, as a subsidiary or financing arm of IBM, is primarily associated with financing solutions. However, the broader IBM corporation has a long and extensive history of providing a wide array of IT services, including data backup, disaster recovery, and cybersecurity solutions to government agencies. When analyzing this specific contract, it's crucial to understand whether IBM Credit LLC is acting as the prime contractor and directly performing the services, or if it's a contractual vehicle through which IBM's service divisions are delivering the work. Assuming IBM's service divisions are involved, their track record is generally strong, marked by numerous large federal contracts. Past performance evaluations, if available through contract databases or agency reports, would offer more specific insights into their reliability, technical capabilities, and customer satisfaction in delivering similar ADP backup and security services.

What are the potential risks associated with a fixed-price contract with economic price adjustment for these services?

A fixed-price contract with economic price adjustment (FP-EPA) aims to provide cost certainty while allowing for adjustments due to fluctuations in specific economic factors, such as labor rates or material costs. The primary risk for the government is potential cost escalation beyond initial projections if the economic factors driving the adjustments increase significantly. While the base price is fixed, the 'economic price adjustment' clause can lead to higher overall expenditures than initially budgeted, especially over a multi-year contract. For the contractor, the risk is mitigated by the adjustment clause, as they are protected against unforeseen cost increases. Effective risk management for the government involves clearly defining the economic factors subject to adjustment, establishing reasonable adjustment caps, and robustly monitoring market indices to ensure adjustments are justified and fair.

How does the 'Other Computer Related Services' classification impact the understanding of this contract's value?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specifically classified under other codes. This generality can make it challenging to precisely assess the value and scope of the contract without further detail. While it correctly identifies the contract's domain as computer services, it doesn't specify whether the focus is on hardware, software, networking, consulting, or specialized security functions. For 'ADP BACKUP AND SECURITY SERVICES,' this classification is appropriate but lacks specificity. This ambiguity can hinder direct comparisons with more narrowly defined contracts (e.g., dedicated cybersecurity services or data storage solutions) and makes it harder to benchmark pricing and performance effectively. Understanding the specific deliverables within this broad category is key to a thorough value assessment.

What is the significance of the contract being awarded by U.S. Customs and Border Protection (CBP)?

The awarding agency, U.S. Customs and Border Protection (CBP), is a critical component of the Department of Homeland Security (DHS) responsible for border security and facilitating lawful international trade and travel. Awarding this contract signifies the importance of reliable ADP backup and security services for CBP's mission-critical operations. CBP manages vast amounts of data related to trade, travel, and enforcement activities. Ensuring the integrity, availability, and security of this data through robust backup and cybersecurity measures is paramount to their operational effectiveness and national security. This context suggests that the services procured are likely subject to stringent requirements and high standards due to the sensitive nature of CBP's data and operations.

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: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: International Business Machines Corporation (UEI: 001368083)

Address: 6700 ROCKLEDGE DR, BETHESDA, MD, 08

Business Categories: Category Business, Higher Education, Higher Education (Minority Serving), Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $99,714,400

Exercised Options: $88,156,470

Current Obligation: $88,156,470

Timeline