IBM Awarded $35.4M DHS Contract for Production Application Maintenance

Contract Overview

Contract Amount: $35,444,033 ($35.4M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2011-04-30

End Date: 2013-02-14

Contract Duration: 656 days

Daily Burn Rate: $54.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MODERNIZATION TASK ORDER PROD: PRODUCTION APPLICATION MAINTENANCE.

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $35.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MODERNIZATION TASK ORDER PROD: PRODUCTION APPLICATION MAINTENANCE. Key points: 1. Contract value of $35.4 million for application maintenance. 2. IBM is the sole contractor, raising questions about competition. 3. Risk of vendor lock-in and potential cost overruns. 4. IT sector spending on application maintenance is significant.

Value Assessment

Rating: fair

The contract value of $35.4 million for application maintenance over approximately two years appears reasonable given the scope. However, without specific performance metrics or benchmarks for similar maintenance contracts, a precise pricing assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the data indicates IBM is the sole awardee, suggesting potential limitations in the competitive landscape or specific technical requirements.

Taxpayer Impact: While competition was intended, the single awardee may limit price discovery. Taxpayer funds are utilized for essential application maintenance, with the ultimate impact depending on the efficiency and effectiveness of the services provided.

Public Impact

Ensures continued operation of critical production applications for U.S. Customs and Border Protection. Supports border security and trade facilitation by maintaining essential IT systems. Potential for job creation within IBM for IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole awardee despite full and open competition
Lack of detailed performance metrics for cost evaluation
Potential for scope creep in application maintenance

Positive Signals

Essential service for national security and trade
Contract awarded through a competitive process

Sector Analysis

This contract falls within the IT sector, specifically application maintenance and support. Government spending on IT modernization and maintenance is substantial, with application support being a critical component for agency operations.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract award. Large prime contractors like IBM typically manage these contracts, with subcontracting opportunities for small businesses being dependent on their internal policies.

Oversight & Accountability

Oversight would typically be managed by the U.S. Customs and Border Protection contracting officer's representative. Accountability for performance and cost would be tied to the terms of the Cost Plus Fixed Fee contract and any established performance metrics.

Related Government Programs

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

Risk Flags

Potential for cost overruns due to CPFF structure
Limited visibility into specific performance metrics
Sole awardee raises questions about true competition
Long-term dependency on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $35.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MODERNIZATION TASK ORDER PROD: PRODUCTION APPLICATION MAINTENANCE.

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 $35.4 million.

What is the period of performance?

Start: 2011-04-30. End: 2013-02-14.

What was the rationale for IBM being the sole awardee under a full and open competition?

The rationale for a sole awardee under full and open competition could stem from several factors. It might indicate that only IBM possessed the specific proprietary knowledge, existing infrastructure, or unique technical capabilities required for this particular application maintenance. Alternatively, it could suggest that other bidders did not meet the stringent technical requirements or that the evaluation criteria heavily favored IBM's proposal, leading to a single, highly-rated offer.

How does the cost-plus-fixed-fee structure impact the risk for taxpayers?

A Cost Plus Fixed Fee (CPFF) structure means the contractor (IBM) is reimbursed for allowable costs plus a fixed fee representing profit. This structure can shift some risk to the government if costs exceed estimates, as the contractor's fee remains fixed. However, it also incentivizes the contractor to control costs to maximize their overall return, as they bear the risk of cost overruns impacting their profit margin.

What are the key performance indicators (KPIs) used to measure the effectiveness of this application maintenance?

Effectiveness is typically measured through KPIs such as application uptime/availability, response times for critical issues, resolution times for reported bugs, and successful deployment of updates or patches. Adherence to service level agreements (SLAs) is crucial. Without access to the specific contract details and performance reports, it's difficult to ascertain the exact KPIs and their achieved values for this contract.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $71,687,871

Exercised Options: $71,687,871

Current Obligation: $35,444,033

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline