IBM's $43.6M computer support contract with DHS shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $43,599,569 ($43.6M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2007-06-19

End Date: 2010-10-31

Contract Duration: 1,230 days

Daily Burn Rate: $35.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: COMPUTER SUPPORT

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 $43.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: COMPUTER SUPPORT Key points: 1. Contract awarded to a single, large incumbent vendor, suggesting potential for reduced price competition. 2. Performance period spanned over three years, indicating a need for sustained IT support. 3. The contract was competed on a full and open basis, allowing for broad participation. 4. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 5. The contract's value is moderate within the context of large federal IT support services. 6. Oversight mechanisms are assumed to be standard for a contract of this nature and duration.

Value Assessment

Rating: fair

The total value of $43.6 million over approximately three years suggests an average annual spend of around $14.5 million. Benchmarking this against similar large-scale IT support contracts for federal agencies indicates that this figure is within a reasonable range, though specific performance metrics and service levels would be needed for a definitive value assessment. The pricing structure, likely based on labor hours, can be variable and depends heavily on the skill mix and hours utilized. Without detailed breakdowns of labor categories and rates, a precise value-for-money comparison is challenging, but the overall spend is not an outlier.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' procurement strategy, which theoretically allows any interested and qualified vendor to submit a bid. The number of bidders is not specified in the provided data, but the fact that it was competed openly is a positive sign for price discovery. However, the ultimate success of the competition in driving down costs depends on the number of actual bids received and the competitiveness of those bids against the incumbent's offering.

Taxpayer Impact: A full and open competition, when effectively executed with multiple responsive bidders, generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions.

Public Impact

The primary beneficiary of this contract is the U.S. Customs and Border Protection (CBP) within the Department of Homeland Security, receiving essential computer support services. Services delivered likely include maintenance, troubleshooting, system administration, and potentially hardware/software support critical for CBP's operational functions. The geographic impact is centered around the District of Columbia, where the contract was managed and likely where many of the supported systems and personnel are located. The contract supported the federal workforce by ensuring the reliability and functionality of their IT infrastructure, enabling them to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess if the full value was realized.
Reliance on a single large contractor for critical IT support could pose a risk if the contractor underperforms or faces financial instability.
The contract duration might have limited opportunities for newer, potentially more cost-effective solutions to emerge during its term.

Positive Signals

Awarded through full and open competition, indicating an effort to ensure a fair and broad selection process.
The contract was awarded to a well-established technology provider (IBM), suggesting a degree of reliability and experience.
The contract duration implies a stable IT support environment was maintained for CBP.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on computer support and maintenance. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts like this are crucial for ensuring the operational continuity of government functions. Comparable spending benchmarks for IT support services vary widely based on scope, complexity, and service level agreements, but IBM's multi-million dollar award is typical for large federal IT support engagements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). This means that large businesses, such as IBM, were eligible to compete and were awarded the contract. While this ensures access to a wide range of capabilities, it also means that direct subcontracting opportunities for small businesses under this specific award are not guaranteed unless mandated by the prime contractor or agency policy. The absence of a small business set-aside might limit the direct infusion of federal dollars into the small business IT ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within U.S. Customs and Border Protection. Standard oversight mechanisms would include regular performance reviews, monitoring of deliverables, invoice verification, and adherence to contract terms. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse related to the contract were to arise.

Related Government Programs

Federal IT Infrastructure Support Services
Department of Homeland Security IT Contracts
Customs and Border Protection IT Services
Large-Scale IT Service Contracts
Information Technology Professional Services

Risk Flags

Potential for vendor lock-in due to incumbent status.
Lack of specific performance metrics hinders value assessment.
Contract type (labor hours) can lead to cost uncertainty if not managed tightly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $43.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. COMPUTER SUPPORT

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 $43.6 million.

What is the period of performance?

Start: 2007-06-19. End: 2010-10-31.

What was the specific nature of the computer support provided under this contract?

While the data specifies 'COMPUTER SUPPORT,' the exact nature of services typically encompasses a broad range of IT functions. This could include help desk support, network administration, server maintenance, cybersecurity monitoring, software installation and updates, hardware troubleshooting and repair, and potentially IT asset management. For U.S. Customs and Border Protection, these services are critical for maintaining the operational readiness of systems used for border security, trade facilitation, and law enforcement activities. The 'LABOR HOURS' contract type suggests that the primary cost driver was the time spent by personnel performing these support functions, rather than fixed-price deliverables.

How does the $43.6 million contract value compare to other similar IT support contracts awarded by DHS or CBP?

The $43.6 million total value over approximately three years (June 2007 - October 2010) places this contract in the mid-to-large tier for federal IT support services. Agencies like DHS and its components, such as CBP, often award multi-million dollar contracts for IT support due to the complexity and scale of their operations. Without access to a detailed database of comparable CBP or DHS IT support contracts from that specific period, a precise benchmark is difficult. However, annual spending in the range of $10-20 million for comprehensive IT support is not uncommon for large federal entities. The value appears reasonable in this context, assuming the scope of services was substantial.

What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, IT support contracts of this magnitude would include metrics such as system uptime percentages, response times for help desk tickets, resolution times for critical issues, and user satisfaction ratings. These KPIs are crucial for assessing the contractor's performance and ensuring the agency receives adequate value for its investment. The absence of this information in the summary data limits a thorough evaluation of the contractor's performance and the overall effectiveness of the support provided.

What is IBM's track record with federal IT support contracts, particularly with DHS?

International Business Machines (IBM) has a long and extensive history of providing IT services and support to the federal government, including numerous contracts with the Department of Homeland Security (DHS) and its various components. IBM is a major federal contractor known for its capabilities in areas such as cloud computing, cybersecurity, data analytics, and IT infrastructure management. While specific performance details for individual contracts are not always public, IBM generally holds a strong position in the federal IT market. Their track record includes managing large, complex IT systems for various agencies, indicating a capacity to handle significant support requirements like those of CBP.

Were there any identified risks or challenges during the performance of this contract?

The provided summary data does not explicitly detail any specific risks or challenges encountered during the performance of this IBM computer support contract with CBP. However, common risks associated with large federal IT support contracts include scope creep, budget overruns, cybersecurity threats, vendor performance issues, and difficulties in integrating new technologies. Given the contract's duration (over three years) and its focus on essential support services, potential challenges might have involved maintaining system security, ensuring adequate staffing levels with the right expertise, and adapting to evolving technological requirements within CBP.

How has federal spending on computer support services evolved since this contract was awarded in 2007?

Federal spending on computer support services has significantly evolved since 2007, driven by technological advancements, changing security landscapes, and shifts in procurement strategies. Post-2007, there has been a marked increase in spending on cloud computing services, cybersecurity solutions, data analytics platforms, and managed IT services. Agencies have increasingly sought to modernize their infrastructure, moving away from traditional on-premises solutions towards more flexible and scalable cloud-based environments. Furthermore, there's been a greater emphasis on agile development andDevOps practices. While traditional support remains crucial, the nature of 'computer support' has broadened to encompass a wider array of digital services and strategic IT planning.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

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: $61,098,319

Exercised Options: $61,098,319

Current Obligation: $43,599,569

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline