DHS Spends $32.3M on SAP Support Services from IBM via Full and Open Competition

Contract Overview

Contract Amount: $32,259,074 ($32.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2010-07-01

End Date: 2012-09-29

Contract Duration: 821 days

Daily Burn Rate: $39.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: DEVELOPMENT/SUPPORT SERVICE FOR SAP PROJECT.

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 $32.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: DEVELOPMENT/SUPPORT SERVICE FOR SAP PROJECT. Key points: 1. IBM secured a significant contract for SAP development and support. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The duration of the contract was 821 days. 4. The total award amount was over $32 million. 5. The contract falls under the 'Computer and Software Stores' NAICS code.

Value Assessment

Rating: fair

The contract's value of $32.3 million for SAP development and support over approximately two years appears substantial. Benchmarking against similar large-scale SAP implementation and support contracts would be necessary to definitively assess its value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and allows the government to select the best value offering.

Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers as it aims to secure competitive pricing and the best possible services.

Public Impact

Customs and Border Protection relies on IBM for critical SAP system support. The contract duration suggests a long-term need for these services. The significant expenditure highlights the importance of robust IT infrastructure for national security operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or outcomes in the provided data.
Potential for cost overruns in long-term IT support contracts.
Dependency on a single vendor (IBM) for critical system support.

Positive Signals

Awarded through full and open competition.
Clear contract award to a well-known vendor.
Defined contract period.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software development and support services. Spending benchmarks for similar large-scale enterprise resource planning (ERP) system support contracts can vary widely based on complexity and vendor.

Small Business Impact

The data indicates the prime contractor is IBM, a large business. There is no information provided regarding subcontracting to small businesses for this specific contract.

Oversight & Accountability

The Department of Homeland Security, through U.S. Customs and Border Protection, awarded this contract. Standard government oversight processes would apply, including contract performance monitoring and financial reviews.

Related Government Programs

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

Risk Flags

Lack of detailed scope of work.
No mention of performance metrics or service level agreements.
Potential for vendor lock-in with long-term support contracts.
Limited insight into the specific SAP modules supported.
Absence of small business subcontracting information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $32.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. DEVELOPMENT/SUPPORT SERVICE FOR SAP PROJECT.

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 $32.3 million.

What is the period of performance?

Start: 2010-07-01. End: 2012-09-29.

What specific SAP modules or functionalities were covered under this development and support contract, and how did their complexity influence the final price?

The provided data does not specify the SAP modules or functionalities covered. The complexity of these modules, such as finance, human resources, or supply chain management, would significantly impact the development and support effort required. Highly customized or integrated modules would naturally command higher costs due to the specialized expertise and extensive testing needed for successful implementation and ongoing maintenance.

Were there any key performance indicators (KPIs) established for IBM's performance, and how were they measured to ensure effective service delivery and value for money?

The available data does not detail specific Key Performance Indicators (KPIs) for this contract. Effective service delivery in IT support typically involves metrics like system uptime, response times for issue resolution, and successful implementation of updates or patches. Without explicit KPIs, assessing the effectiveness of IBM's performance and the true value derived by U.S. Customs and Border Protection is challenging.

Given the $32.3 million expenditure, what was the projected return on investment (ROI) or long-term cost savings anticipated from this SAP support contract for U.S. Customs and Border Protection?

The data does not provide information on the projected ROI or anticipated long-term cost savings. For large IT investments like SAP systems, the ROI is often measured through improved operational efficiency, reduced manual processes, better data accuracy, and enhanced decision-making capabilities. Quantifying these benefits would be crucial to justify the substantial expenditure over the contract's lifecycle.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,259,074

Exercised Options: $32,259,074

Current Obligation: $32,259,074

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4984H

IDV Type: FSS

Timeline