IBM's $10.4M DHS contract for IT services awarded under full and open competition

Contract Overview

Contract Amount: $10,408,315 ($10.4M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2003-11-18

End Date: 2003-12-31

Contract Duration: 43 days

Daily Burn Rate: $242.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TO12

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $10.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: TO12 Key points: 1. Contract awarded to a large, established technology provider. 2. Limited duration suggests a specific, short-term need. 3. Firm fixed-price contract type offers cost certainty. 4. Awarded by U.S. Customs and Border Protection, indicating a focus on border security IT. 5. The contract value is moderate for IT services provided by a major corporation.

Value Assessment

Rating: fair

The contract value of $10.4 million for a 43-day period is difficult to benchmark without more specific service details. Given the short duration, the per-day cost appears high, but this could be justified by specialized IT support or critical system maintenance. Comparing it to similar short-term, high-urgency IT support contracts would be necessary for a more precise value assessment. The firm fixed-price nature provides cost predictability for the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this method generally fosters competitive pricing and allows the government to select the best value offer. The open competition suggests a standard IT service requirement where a broad range of vendors could meet the needs.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and ensure the government receives competitive pricing.

Public Impact

Benefits U.S. Customs and Border Protection by providing necessary IT services. Supports the agency's mission in border security and trade facilitation. Likely impacts IT personnel within the agency and potentially contractor staff. Geographic impact is primarily within the operational areas of CBP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited duration may indicate a reactive or emergency IT need, potentially pointing to underlying system vulnerabilities or unexpected demands.
Lack of specific service details makes it hard to assess if the price reflects true market value for the work performed.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm fixed-price contract provides cost certainty and limits the government's financial exposure.
Contract awarded to a well-established IT provider (IBM) which may imply reliability and expertise.

Sector Analysis

This contract falls within the Information Technology sector, specifically supporting government IT infrastructure and services. The market for government IT services is vast, with numerous large and small businesses competing for contracts. This particular award to IBM, a major player in the IT industry, is consistent with large federal agencies procuring complex IT solutions. Benchmarking would involve comparing this to other IT support or maintenance contracts awarded by DHS or similar agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large corporation. There is no information provided on subcontracting plans. This suggests that small businesses were likely not the primary focus for this specific award, though they may participate in the broader IT services market supporting federal agencies.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Customs and Border Protection's contracting and program management offices. As a delivery order under a larger contract vehicle, oversight may also be tied to the parent contract's structure. Transparency is generally facilitated by contract award databases, but specific performance oversight details are not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Homeland Security IT Services
Customs and Border Protection Technology Modernization
Federal Civilian IT Procurement
Large Business IT Support Contracts

Risk Flags

Limited contract duration
Lack of specific service details
High daily cost potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $10.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. TO12

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

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 $10.4 million.

What is the period of performance?

Start: 2003-11-18. End: 2003-12-31.

What specific IT services were provided under this delivery order?

The provided data does not specify the exact IT services rendered under this delivery order (TO12). However, given it was awarded by U.S. Customs and Border Protection (CBP) to IBM, it likely involved critical IT support, maintenance, or system enhancements necessary for CBP's operations. These could range from network management and cybersecurity support to software development or hardware maintenance. Without more granular information, the precise nature of the services remains undefined, making it challenging to assess the value or necessity of the expenditure beyond its general IT support context.

How does the $10.4 million cost compare to similar IT support contracts for federal agencies?

Benchmarking this $10.4 million contract is difficult due to its short 43-day duration and lack of specific service details. If this represents a one-time, high-urgency support need, the cost might be justifiable. However, on a per-day basis, it is substantial. For context, typical large-scale IT support contracts for federal agencies can run into hundreds of millions or billions of dollars over several years. Shorter-term, specialized support contracts can vary widely. To provide a meaningful comparison, one would need to identify contracts with similar scope, duration, and service complexity, ideally within the Department of Homeland Security or for border security-related IT functions.

What is IBM's track record with the Department of Homeland Security?

International Business Machines Corporation (IBM) has a significant and long-standing track record of contracting with the Department of Homeland Security (DHS) and its predecessor agencies. IBM provides a wide array of IT services, including cloud computing, cybersecurity, data analytics, and system modernization. Their involvement spans numerous critical programs within DHS components like U.S. Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), and the Transportation Security Administration (TSA). While specific performance details for individual contracts like this delivery order are not detailed here, IBM's consistent presence suggests a generally accepted capability to meet DHS's complex IT requirements, though like any large contractor, they would be subject to ongoing performance reviews and oversight.

What are the potential risks associated with a short-duration, high-value IT contract?

Short-duration, high-value IT contracts, like this $10.4 million delivery order for IBM, can present several risks. One primary risk is the potential for cost overruns if the scope is not perfectly defined or if unforeseen issues arise, although the firm fixed-price structure mitigates this to some extent. Another risk is the possibility of inadequate service delivery if the contractor lacks sufficient understanding of the critical systems or if the transition is poorly managed. For the government, there's also the risk of vendor lock-in if the services provided are highly specialized and difficult to transfer to another provider. Finally, the compressed timeline might lead to rushed implementation or insufficient testing, increasing the likelihood of operational disruptions or security vulnerabilities.

How does the 'full and open competition' award method impact cost-effectiveness for taxpayers?

Awarding contracts through 'full and open competition' is generally considered beneficial for taxpayers. This method ensures that all responsible sources are permitted to submit a bid, maximizing the pool of potential contractors. Increased competition typically drives down prices as companies vie for the contract by offering more competitive rates and better value. It also allows the government to select the offer that provides the best overall value, which may include factors beyond just price, such as technical approach, past performance, and management capability. This process is designed to prevent monopolies, encourage innovation, and ultimately lead to more efficient use of taxpayer funds compared to sole-source or limited competition methods.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,408,315

Exercised Options: $10,408,315

Current Obligation: $10,408,315

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline