FEMA Awards $61.5M to IBM for IT Operations and Maintenance, Lacking Competition

Contract Overview

Contract Amount: $61,466,750 ($61.5M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2017-09-29

End Date: 2019-11-30

Contract Duration: 792 days

Daily Burn Rate: $77.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF THE SCOPE OF SERVICES INCLUDES OPERATIONS AND MAINTENANCE, PROJECT PLANNING, KNOWLEDGE AND ASSET TRANSFER, ADVISING ON ARCHITECTURE DESIGN, SYSTEMS ENGINEERING, TECHNICAL DOCUMENTATION, AND SYSTEMS TESTING AND ADVISING THE CDS PROVIDER AS NECESSARY.

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $61.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::CT::IGF THE SCOPE OF SERVICES INCLUDES OPERATIONS AND MAINTENANCE, PROJECT PLANNING, KNOWLEDGE AND ASSET TRANSFER, ADVISING ON ARCHITECTURE DESIGN, SYSTEMS ENGINEERING, TECHNICAL DOCUMENTATION, AND SYSTEMS TESTING AND ADVISING THE CDS PROVIDER AS NECESSARY. Key points: 1. IBM secured a significant contract for comprehensive IT services, including O&M, project planning, and systems engineering. 2. The contract was not competed, raising questions about potential price discovery and value for taxpayer dollars. 3. The lack of competition presents a risk of inflated costs and limited innovation compared to a competitive environment. 4. This spending falls within the Information Technology sector, specifically 'All Other Information Services'.

Value Assessment

Rating: questionable

The contract value of $61.5M for a two-year period is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar IT operations and maintenance contracts in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This significantly impacts price discovery, as there was no market pressure to drive down costs or encourage innovative solutions.

Taxpayer Impact: The absence of competition may lead to taxpayers paying a premium for these IT services, as there was no mechanism to ensure the most cost-effective solution was selected.

Public Impact

Citizens rely on FEMA for critical services, and the efficiency of its IT infrastructure directly impacts disaster response and recovery. A lack of competitive bidding on IT contracts can lead to higher costs for essential government functions. Transparency in government contracting is crucial for public trust and ensuring responsible use of taxpayer funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment
Limited innovation incentives

Positive Signals

Definitive contract type
Firm Fixed Price contract type

Sector Analysis

This contract falls under the Information Technology sector, specifically 'All Other Information Services'. IT spending is a significant portion of federal budgets, and competitive procurement is vital for cost efficiency and technological advancement.

Small Business Impact

There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The lack of competition suggests potential weaknesses in the procurement process oversight. Robust oversight is needed to ensure that sole-source or limited-competition awards are justified and that fair pricing is achieved.

Related Government Programs

All Other Information Services
Department of Homeland Security Contracting
Federal Emergency Management Agency Programs

Risk Flags

Sole-source award
Potential for inflated pricing
Lack of market-driven innovation
Limited transparency in justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $61.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::CT::IGF THE SCOPE OF SERVICES INCLUDES OPERATIONS AND MAINTENANCE, PROJECT PLANNING, KNOWLEDGE AND ASSET TRANSFER, ADVISING ON ARCHITECTURE DESIGN, SYSTEMS ENGINEERING, TECHNICAL DOCUMENTATION, AND SYSTEMS TESTING AND ADVISING THE CDS PROVIDER AS NECESSARY.

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 (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $61.5 million.

What is the period of performance?

Start: 2017-09-29. End: 2019-11-30.

What was the justification for not competing this contract, and were alternative solutions explored?

The provided data states the contract was 'NOT COMPETED'. A thorough review would require access to the contract file to understand the specific justification (e.g., urgent need, unique capability). Without this, it's impossible to determine if alternative solutions were adequately explored or if this was the most responsible approach.

How does the per-unit cost of services compare to industry benchmarks, given the lack of competition?

Directly comparing per-unit costs is challenging without a competitive baseline. The absence of competition means there's no market-driven benchmark. An independent cost analysis or benchmarking against similar government contracts awarded competitively would be necessary to assess value for money.

What mechanisms are in place to ensure ongoing value and performance from IBM, despite the non-competitive award?

With a non-competed contract, robust performance monitoring and contract management are critical. FEMA should have clear performance metrics, regular reviews, and mechanisms for addressing any deficiencies to ensure they are receiving adequate value and service quality.

Industry Classification

NAICS: Information › Other Information Services › All Other Information Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSFE60-17-R-0009

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $64,274,961

Exercised Options: $61,466,750

Current Obligation: $61,466,750

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $16,057,825

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline