IBM contract for IT services awarded $31M by DHS, demonstrating long-term IT support needs

Contract Overview

Contract Amount: $31,027,237 ($31.0M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2007-09-26

End Date: 2010-02-28

Contract Duration: 886 days

Daily Burn Rate: $35.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TO ENTS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20004

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $31.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: TO ENTS Key points: 1. Value for money assessed through comparison with similar IT service contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract type (Cost Plus Fixed Fee) which can allow for cost overruns. 4. Performance context is tied to IT services for U.S. Customs and Border Protection. 5. Sector positioning within the federal IT services market, a significant area of government spending.

Value Assessment

Rating: fair

The $31 million award to IBM for IT services appears to be a substantial investment. Benchmarking this against similar long-term IT support contracts awarded by agencies like DHS or other large federal entities would be crucial for a comprehensive value assessment. The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, can sometimes lead to higher costs if not managed tightly, suggesting a need for vigilant oversight to ensure cost-effectiveness over the contract's duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The fact that IBM was selected indicates they offered the best value proposition among the bidders. A full and open competition generally fosters a competitive environment, which can lead to more favorable pricing and innovative solutions for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and quality for essential IT services, reducing the risk of overpayment compared to less competitive award methods.

Public Impact

Benefits U.S. Customs and Border Protection by providing necessary IT services. Ensures the continuity of critical IT infrastructure and support for border security operations. The contract's impact is primarily within the federal government's IT infrastructure, supporting national security functions. Workforce implications may include the direct employment of IBM personnel and potential indirect impacts on government IT staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type may incentivize cost increases if not closely monitored.
Long contract duration (886 days) increases exposure to potential scope creep or evolving technological needs.
Limited specific performance metrics provided in the data make it difficult to assess efficiency.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
IBM is a large, established contractor with significant experience in federal IT services.
Contract supports a critical agency (DHS) and function (border protection).

Sector Analysis

The federal IT services sector is a vast and continuously growing market, with agencies consistently seeking to modernize and maintain their technological infrastructure. This contract with IBM for U.S. Customs and Border Protection falls within this broad category, representing a typical investment in maintaining and upgrading essential systems. Comparable spending benchmarks would likely show significant annual outlays across various agencies for similar IT support, maintenance, and development services.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large prime contract awarded to a major corporation like IBM, the primary impact on the small business ecosystem would likely be through potential subcontracting opportunities if IBM chooses to engage small businesses for specific components or services. Without explicit set-aside or subcontracting plans, the direct benefit to small businesses from this specific award is unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Customs and Border Protection contracting officers and program managers within the Department of Homeland Security. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS, which provide public access to award details, though detailed performance reports are often internal.

Related Government Programs

Department of Homeland Security IT Modernization Programs
Federal Civilian IT Services Contracts
Customs and Border Protection Technology Modernization
Large-Scale IT Infrastructure Support Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration increases exposure to technological obsolescence and scope creep.
Specific performance metrics and outcomes are not detailed in the provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $31.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. TO ENTS

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 $31.0 million.

What is the period of performance?

Start: 2007-09-26. End: 2010-02-28.

What is the historical spending pattern of the Department of Homeland Security on IT services, and how does this IBM contract compare?

The Department of Homeland Security (DHS) is one of the largest federal agencies, with a significant portion of its budget allocated to IT services to support its vast mission set, including border security, cybersecurity, and emergency management. Historical data indicates consistent and substantial spending on IT across various sub-agencies like U.S. Customs and Border Protection (CBP). This $31 million contract, awarded in 2007 and ending in 2010, represents a specific investment within a broader, ongoing trend of IT procurement by DHS. While this single award is a snapshot, DHS's overall IT spending has been in the billions annually, reflecting the critical role technology plays in its operations. Analyzing this contract in isolation provides limited insight into the overall trend, but it aligns with the agency's continuous need for IT support and modernization.

How does the Cost Plus Fixed Fee (CPFF) contract type typically perform in terms of cost control compared to other contract types for IT services?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or when there is a high degree of uncertainty, common in research and development or complex IT projects. Under a CPFF agreement, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While this structure provides flexibility for the government to adapt to changing requirements, it carries a higher risk of cost overruns compared to fixed-price contracts. The contractor has less incentive to control costs because their profit is fixed. Effective cost control under CPFF relies heavily on robust government oversight, detailed cost tracking, and stringent auditing to ensure that all reimbursed costs are reasonable, allocable, and necessary. Without strong oversight, CPFF contracts can become more expensive than initially anticipated.

What is IBM's track record with federal IT service contracts, particularly with agencies like DHS?

International Business Machines (IBM) has a long and extensive history as a major contractor for the U.S. federal government, including significant engagements with the Department of Homeland Security (DHS) and its predecessor agencies. IBM has been awarded numerous contracts across various IT domains, such as cloud computing, cybersecurity, data analytics, and legacy system modernization. Their track record generally reflects a capacity to handle large-scale, complex IT projects. However, like any large contractor, IBM's performance has varied across contracts, with some engagements receiving high marks for delivery and innovation, while others may have faced challenges related to cost, schedule, or scope. Specific performance data for individual contracts, including this CBP award, would be necessary for a detailed assessment of their performance in this particular instance.

What are the potential risks associated with a long-duration IT services contract like this one, and how are they typically mitigated?

Long-duration IT services contracts, such as this 886-day award, present several potential risks. One primary risk is technological obsolescence; the IT landscape evolves rapidly, and a system or service implemented at the start of a long contract might be outdated by its end. Another risk is scope creep, where requirements expand beyond the original agreement, leading to increased costs and delays. Contractor performance degradation over time is also a concern. Mitigation strategies include building flexibility into the contract for technology refreshes or scope adjustments, establishing clear performance metrics and incentives, conducting regular performance reviews, and ensuring strong government oversight to manage changes and monitor progress effectively. Break clauses or options for early termination can also be included to allow the government to exit if performance is unsatisfactory or needs change.

How does the level of competition (full and open) influence the pricing and innovation for federal IT contracts?

A 'full and open competition' process is designed to maximize the number of potential bidders, thereby fostering a competitive environment. This increased competition generally leads to better pricing for the government, as contractors are incentivized to offer their most competitive rates and proposals to win the contract. Beyond price, robust competition can also drive innovation. When multiple companies vie for a contract, they are more likely to propose novel solutions, advanced technologies, or more efficient methodologies to differentiate themselves. This benefits the government by potentially securing not only cost savings but also higher quality services and more effective technological solutions that might not emerge from a sole-source or limited competition scenario.

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: $31,027,237

Exercised Options: $31,027,237

Current Obligation: $31,027,237

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline