DHS Spends $18.7M on SAP O&M and Consulting Support from IBM

Contract Overview

Contract Amount: $18,697,761 ($18.7M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2012-09-19

End Date: 2014-05-02

Contract Duration: 590 days

Daily Burn Rate: $31.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SAP O&M AND CONSULTING SUPPORT

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 $18.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: SAP O&M AND CONSULTING SUPPORT Key points: 1. Significant investment in SAP O&M and consulting services. 2. IBM is the sole contractor for this delivery order. 3. Contract duration of 590 days indicates a substantial project. 4. Spending falls within the IT sector, specifically software support.

Value Assessment

Rating: fair

The contract value of $18.7 million for SAP O&M and consulting over approximately 20 months appears high. Benchmarking against similar SAP support contracts would be necessary to determine if this pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific award type (Delivery Order) implies it might be against a larger indefinite-delivery indefinite-quantity (IDIQ) contract, which could influence price discovery.

Taxpayer Impact: Taxpayer funds are being used for essential IT operational support and consulting, the value of which depends on the effectiveness and efficiency of the services provided.

Public Impact

Ensures continued operation of critical SAP systems for U.S. Customs and Border Protection. Supports the agency's ability to manage customs and border operations. Potential for improved efficiency and effectiveness through consulting services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics provided.
Potential for cost overruns in time and materials contracts.
Limited visibility into the specific consulting services rendered.

Positive Signals

Awarded under full and open competition.
Supports a critical government function (Customs and Border Protection).
Contract is for operational maintenance, ensuring system continuity.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on enterprise resource planning (ERP) software maintenance and support. Spending on SAP O&M and consulting can vary widely depending on the complexity of the implementation and the size of the organization.

Small Business Impact

The contract was awarded to IBM, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific delivery order.

Oversight & Accountability

Oversight would typically be managed by the Department of Homeland Security's contracting officers and program managers. Ensuring accountability for the $18.7 million expenditure requires monitoring performance, deliverables, and adherence to contract terms.

Related Government Programs

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

Risk Flags

High contract value for a defined period.
Time and Materials pricing can lead to cost overruns.
Lack of specific performance metrics in the provided data.
Sole contractor (IBM) for this delivery order, though awarded via full and open competition.
Potential for vendor lock-in with long-term SAP support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $18.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. SAP O&M AND CONSULTING SUPPORT

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 $18.7 million.

What is the period of performance?

Start: 2012-09-19. End: 2014-05-02.

What specific SAP modules and functionalities are covered by this O&M and consulting contract, and how critical are they to CBP's mission?

The contract covers the operational maintenance and consulting support for SAP systems used by U.S. Customs and Border Protection. These systems are likely critical for managing trade, revenue collection, and border security operations. Understanding the specific modules (e.g., finance, logistics, human resources) and their criticality is essential for assessing the true value of this expenditure.

How does the $18.7 million expenditure compare to industry benchmarks for similar SAP O&M and consulting services for an agency of CBP's size and complexity?

Without detailed information on the specific services rendered and the complexity of CBP's SAP environment, a direct comparison to industry benchmarks is challenging. However, $18.7 million over approximately 20 months represents a significant investment. A thorough analysis would require comparing hourly rates, support levels, and the scope of consulting against similar government or private sector contracts to ascertain cost-effectiveness.

What mechanisms are in place to ensure the consulting services provided are effective and deliver tangible improvements to CBP's SAP operations?

Effectiveness of consulting services is typically measured through defined deliverables, performance metrics, and post-implementation reviews. For this contract, oversight should focus on whether the consulting led to improved system performance, cost savings, enhanced user capabilities, or better alignment with CBP's strategic objectives. The time and materials nature of the contract necessitates close monitoring to prevent scope creep and ensure value for money.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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: $18,697,761

Exercised Options: $18,697,761

Current Obligation: $18,697,761

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F4984H

IDV Type: FSS

Timeline