DHS Awards IBM $137.8M Task Order for Modernization, Full and Open Competition

Contract Overview

Contract Amount: $137,827,700 ($137.8M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2006-09-28

End Date: 2008-03-31

Contract Duration: 550 days

Daily Burn Rate: $250.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: MODERNIZATION TASK ORDER 27

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $137.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MODERNIZATION TASK ORDER 27 Key points: 1. Significant contract value of $137.8 million awarded to IBM. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of 550 days indicates a substantial, medium-term project. 4. Cost Plus Incentive Fee (CPIF) contract type introduces performance-based incentives. 5. No small business participation noted, which could be a missed opportunity.

Value Assessment

Rating: fair

The $137.8 million award for a 550-day modernization task order is substantial. Without specific benchmarks for similar IT modernization projects within DHS or CBP, assessing its pricing fairness is challenging. The CPIF structure suggests an attempt to control costs through incentives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition is a positive indicator for price discovery. This method allows all eligible vendors to bid, theoretically leading to more competitive pricing. The final price is influenced by the CPIF structure, which ties profit to performance.

Taxpayer Impact: A competitive bidding process for a large contract like this aims to ensure taxpayer funds are used efficiently. However, the CPIF structure requires careful monitoring to ensure cost overruns are minimized.

Public Impact

Modernization efforts by U.S. Customs and Border Protection aim to improve operational efficiency and security. The significant investment in IT infrastructure highlights the critical role of technology in border management. IBM's role suggests a focus on leveraging established technology providers for complex government projects. The contract's completion date in 2008 means its impact is historical, reflecting past modernization strategies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation.
CPIF contract type can lead to cost overruns if not managed tightly.
Contract awarded in 2006, data is historical.

Positive Signals

Full and open competition utilized.
Significant investment in critical infrastructure modernization.
Award to a major IT provider like IBM.

Sector Analysis

This contract falls within the Information Technology sector, specifically related to government modernization efforts. IT spending benchmarks for modernization projects vary widely based on scope and technology, but $137.8 million represents a significant investment for a single task order.

Small Business Impact

The data indicates that no small business participation was noted for this contract. This suggests that the prime contractor, IBM, likely handled the entire scope of work or subcontracted to other large businesses, potentially missing opportunities to engage smaller, specialized firms.

Oversight & Accountability

The use of full and open competition provides a degree of oversight through the bidding process. However, the CPIF contract type necessitates robust government oversight to ensure IBM meets performance targets and manages costs effectively throughout the contract period.

Related Government Programs

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

Risk Flags

Lack of small business participation.
Potential for cost overruns with CPIF.
Historical data (contract ended 2008).
No specific performance metrics provided.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $137.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MODERNIZATION TASK ORDER 27

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 $137.8 million.

What is the period of performance?

Start: 2006-09-28. End: 2008-03-31.

What specific modernization goals did this task order aim to achieve for U.S. Customs and Border Protection, and how were these measured?

The task order focused on modernizing systems critical to CBP's operations. Specific goals likely included enhancing data processing capabilities, improving border security technology, and streamlining internal workflows. Success would have been measured against predefined performance metrics tied to the incentive fee structure, potentially covering aspects like system uptime, processing speed improvements, and user satisfaction.

What were the primary risks associated with this CPIF contract, and how did the government mitigate them?

The primary risk with a Cost Plus Incentive Fee (CPIF) contract is the potential for cost overruns if performance targets are not met or if the 'cost' element escalates unexpectedly. Mitigation strategies employed by the government would include clearly defined performance metrics, rigorous monitoring of expenditures, regular progress reviews, and strong negotiation of the incentive fee structure to ensure it aligned with desired outcomes and taxpayer value.

Given the contract's completion in 2008, what was the long-term effectiveness of this modernization effort on CBP's capabilities?

Assessing the long-term effectiveness requires analyzing CBP's operational performance and technological capabilities post-2008. While the $137.8 million investment likely yielded improvements in specific areas, the true measure of success would be sustained enhancements in border security, data management, and operational efficiency that persisted beyond the contract's immediate impact, contributing to ongoing mission success.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $138,227,058

Exercised Options: $137,827,700

Current Obligation: $137,827,700

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline