IBM Awarded $43.1M DHS Contract for Modernization Task Order 8

Contract Overview

Contract Amount: $43,115,043 ($43.1M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2004-03-29

End Date: 2004-09-15

Contract Duration: 170 days

Daily Burn Rate: $253.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE

Sector: IT

Official Description: MODERNIZATION TASK ORDER 8.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20229

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $43.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MODERNIZATION TASK ORDER 8. Key points: 1. Significant contract value of $43.1 million awarded to a major IT vendor. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Incentive, which can lead to cost overruns if not managed carefully. 4. The sector is IT, a critical area for government operations and modernization.

Value Assessment

Rating: fair

The contract type (Cost Plus Incentive) carries inherent risk for cost control. Without specific benchmarks for similar modernization tasks, it's difficult to definitively assess pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the Cost Plus Incentive fee structure means the final price is not fixed upfront, and the government pays costs plus a fee, with incentives for performance.

Taxpayer Impact: Taxpayer funds are being used for IT modernization. While competition is positive, the cost-plus nature requires diligent oversight to ensure value for money.

Public Impact

Modernization of critical government IT infrastructure. Potential for improved efficiency and service delivery by U.S. Customs and Border Protection. Impact on the IT services market, particularly for large system integrators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive fee structure can lead to higher costs than fixed-price contracts.
Contract duration of 170 days is relatively short for a modernization task, raising questions about scope or phased approach.
No small business participation indicated.

Positive Signals

Awarded under full and open competition.
Focus on IT modernization, a key government priority.

Sector Analysis

This contract falls within the Information Technology sector, specifically for modernization efforts. IT spending benchmarks vary widely based on the type of service, but large modernization projects often represent significant investments.

Small Business Impact

The data indicates no specific set-aside for small businesses, and the prime contractor is a large corporation. This suggests that small businesses were likely not primary participants in this specific award.

Oversight & Accountability

The Cost Plus Incentive fee structure necessitates robust government oversight to monitor costs, performance, and ensure the contractor is incentivized to achieve objectives efficiently and cost-effectively.

Related Government Programs

Department of Homeland Security Contracting
U.S. Customs and Border Protection Programs

Risk Flags

Cost Plus Incentive fee structure.
Lack of specific performance metrics in provided data.
No indication of small business participation.
Short contract duration for a modernization effort.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $43.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MODERNIZATION TASK ORDER 8.

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 $43.1 million.

What is the period of performance?

Start: 2004-03-29. End: 2004-09-15.

What specific modernization goals were defined for this task order, and how will success be measured against the incentive structure?

The specific modernization goals are not detailed in the provided data. However, under a Cost Plus Incentive fee contract, success is typically measured against pre-defined performance metrics and cost targets. The incentive fee is adjusted based on how well the contractor meets or exceeds these targets, aiming to align contractor and government interests for optimal outcomes and cost efficiency.

What are the potential risks associated with a Cost Plus Incentive fee contract for IT modernization, and how are they mitigated?

Risks include potential cost overruns if the incentive structure is not well-defined or if unforeseen technical challenges arise. Mitigation involves strong government oversight, clear performance metrics, realistic cost projections, and regular reviews to ensure the contractor remains focused on efficiency and value. The government must actively manage the contract to prevent scope creep and control expenditures.

How does this modernization task order contribute to the overall IT effectiveness and mission of U.S. Customs and Border Protection?

This task order is intended to modernize specific IT systems, which should theoretically enhance the operational effectiveness and mission capabilities of CBP. Improved IT systems can lead to better data processing, enhanced security, more efficient border management, and improved inter-agency communication, ultimately supporting CBP's core functions.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE (V)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $43,115,043

Exercised Options: $43,115,043

Current Obligation: $43,115,043

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline