DHS awards $12.3M IT modernization task order to IBM for U.S. Customs and Border Protection

Contract Overview

Contract Amount: $12,305,114 ($12.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2006-10-01

End Date: 2007-10-31

Contract Duration: 395 days

Daily Burn Rate: $31.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MODERNIZATION TASK ORDER 26

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 $12.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MODERNIZATION TASK ORDER 26 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Task order duration of 395 days indicates a focused, short-term project. 3. Cost Plus Fixed Fee contract type may incentivize cost overruns if not closely managed. 4. The award to a large, established contractor like IBM suggests a need for specialized expertise. 5. Focus on IT modernization points to critical infrastructure upgrades for border security. 6. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: fair

Benchmarking the value of this specific task order is challenging without more detailed cost breakdowns or comparable project data. However, a $12.3 million award for IT modernization over approximately 13 months suggests a significant investment. The Cost Plus Fixed Fee (CPFF) structure requires careful oversight to ensure value for money, as it can sometimes lead to higher costs than fixed-price contracts if not managed diligently. Comparing this to other IT modernization efforts within DHS or CBP would provide better context for its cost-effectiveness.

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. This approach generally fosters a competitive environment, which can lead to better pricing and innovative solutions. The number of bidders is not specified, but the open competition suggests that multiple companies likely vied for this work, providing the agency with a range of options.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services due to the competitive pressure on bidders.

Public Impact

U.S. Customs and Border Protection (CBP) personnel will benefit from modernized IT systems, potentially improving operational efficiency. Services delivered include IT modernization, crucial for maintaining and upgrading critical government infrastructure. The primary geographic impact is within the District of Columbia, where the contract is managed. Workforce implications may include the need for specialized IT skills within CBP or reliance on IBM's workforce for project execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type requires robust oversight to prevent potential cost escalations.
Lack of specific details on performance metrics makes it difficult to assess project success independently.
The short duration might indicate a specific phase of a larger, ongoing modernization effort, raising questions about long-term strategy.

Positive Signals

Awarded through full and open competition, suggesting a competitive and potentially cost-effective process.
Focus on IT modernization addresses a critical need for government infrastructure.
Contract awarded to a reputable large business with extensive IT experience.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on modernization efforts for a critical government agency. The federal IT market is vast, with agencies consistently investing in upgrading legacy systems to improve security, efficiency, and capability. Comparable spending benchmarks for IT modernization projects vary widely based on scope and complexity, but a $12.3 million task order for a 13-month period is a significant, yet not extraordinary, investment for a federal agency like DHS.

Small Business Impact

This contract was not set aside for small businesses and was awarded to a large prime contractor, International Business Machines Corporation. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless IBM actively engages small businesses as subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Customs and Border Protection contracting officers and program managers within the Department of Homeland Security. As a Cost Plus Fixed Fee contract, rigorous financial and performance monitoring is essential. Transparency is facilitated through contract award databases, but detailed performance reports and Inspector General reviews would depend on specific agency policies and any identified issues.

Related Government Programs

Department of Homeland Security IT Modernization Programs
U.S. Customs and Border Protection Technology Investments
Federal Civilian IT Services Contracts
Cost Plus Fixed Fee IT Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Limited public information on specific performance metrics makes independent assessment challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $12.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MODERNIZATION TASK ORDER 26

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 $12.3 million.

What is the period of performance?

Start: 2006-10-01. End: 2007-10-31.

What specific IT systems or infrastructure were targeted for modernization under this task order?

The provided data does not specify the exact IT systems or infrastructure targeted for modernization. Task Order 26, awarded to IBM by U.S. Customs and Border Protection (CBP) under the Department of Homeland Security (DHS), focuses broadly on 'MODERNIZATION TASK ORDER 26'. To understand the specific systems, one would need to consult the detailed contract statement of work (SOW) or related documentation. Typically, IT modernization efforts in agencies like CBP involve upgrading legacy software, enhancing network infrastructure, improving data management systems, or implementing new cybersecurity measures to support border security operations.

How does the $12.3 million cost compare to similar IT modernization projects within DHS or CBP?

Directly comparing the $12.3 million cost of this specific task order to similar IT modernization projects within DHS or CBP is difficult without access to detailed project scopes and performance data. However, $12.3 million for a 13-month IT modernization effort is a substantial investment. Federal IT modernization projects can range from a few million to hundreds of millions of dollars, depending on their complexity, duration, and the systems being upgraded. This award suggests a significant, but not exceptionally large, undertaking. A more precise comparison would require analyzing the number of users impacted, the criticality of the systems, the specific technologies implemented, and the overall project objectives against other comparable federal IT contracts.

What are the key performance indicators (KPIs) used to measure the success of this modernization effort?

The provided data does not include the specific Key Performance Indicators (KPIs) used to measure the success of this modernization effort. For a Cost Plus Fixed Fee (CPFF) contract, success is typically measured against the defined objectives in the Statement of Work (SOW). Common KPIs for IT modernization might include system uptime, reduction in processing times, successful migration of data, improved security posture (e.g., reduction in vulnerabilities), user satisfaction, and achievement of specific functional requirements. The contracting agency, U.S. Customs and Border Protection, would be responsible for monitoring IBM's performance against these agreed-upon metrics throughout the contract period.

What is IBM's track record with similar large-scale IT modernization contracts for federal agencies?

International Business Machines Corporation (IBM) has a long and extensive track record of executing large-scale IT modernization contracts for numerous federal agencies, including the Department of Homeland Security (DHS) and its components like U.S. Customs and Border Protection (CBP). IBM has been involved in major government IT initiatives ranging from cloud migrations and data center consolidations to cybersecurity enhancements and the development of complex mission-critical systems. Their experience often includes managing large budgets, diverse technical teams, and navigating complex regulatory environments. While this specific task order (MODERNIZATION TASK ORDER 26) is a discrete award, it aligns with IBM's broader portfolio of federal IT services.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT modernization?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to IBM for this IT modernization task order, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. If the contractor's costs exceed initial estimates, the government bears the burden of these increased expenses, although the fixed fee remains constant. This can incentivize less cost-conscious behavior compared to fixed-price contracts. Effective risk mitigation requires robust government oversight, detailed cost tracking, clear definition of allowable costs, and strong negotiation of the fee structure to ensure the contractor remains motivated to control expenses.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $12,305,114

Exercised Options: $12,305,114

Current Obligation: $12,305,114

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline