DHS awards $45.8M IBM contract extension for USCIS IT services, raising competition concerns

Contract Overview

Contract Amount: $45,804,405 ($45.8M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2014-06-01

End Date: 2015-05-31

Contract Duration: 364 days

Daily Burn Rate: $125.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: EXTENSTION OF OPTION 7 (4 MONTHS) CLINS 7001A&001B, 7003 AND 0002AX UNDER SA CONTRACT HSHQDC-09-J-00001 (5/20/14-TO FUND THE EXECUTION OF THE IBM BRIDGE CONTRACT)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $45.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: EXTENSTION OF OPTION 7 (4 MONTHS) CLINS 7001A&001B, 7003 AND 0002AX UNDER SA CONTRACT HSHQDC-09-J-00001 (5/20/14-TO FUND THE EXECUTION OF THE IBM BRIDGE CONTRACT) Key points: 1. The contract extension for IBM services is substantial at $45.8 million. 2. Competition was full and open, but the extension nature warrants scrutiny. 3. Potential risks include vendor lock-in and cost overruns on extended services. 4. The IT sector is highly dynamic, requiring continuous evaluation of technology and pricing.

Value Assessment

Rating: questionable

The $45.8 million award for a 4-month extension appears high. Benchmarking against similar IT service contracts for government agencies is crucial to determine if the pricing is competitive for the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the extension of an existing option period, rather than a new competitive procurement, may limit price discovery and potentially lead to less favorable terms.

Taxpayer Impact: Taxpayer funds are being used for this IT service extension. While competition was initially open, the extended duration and specific vendor raise questions about maximizing value for money.

Public Impact

USCIS IT infrastructure relies on this IBM contract for continued operation. The extension impacts the continuity of critical immigration processing systems. Taxpayers are funding a significant contract extension for IT services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract extension without clear justification for duration/cost
Potential for cost creep in time and materials contract
Limited visibility into specific services provided under the extension

Positive Signals

Initial award was under full and open competition
Contract supports critical government functions

Sector Analysis

This contract falls within the Information Technology sector, specifically computer and software stores, supporting government IT infrastructure. Spending benchmarks in this area vary widely based on service type and duration, but large extensions warrant close examination.

Small Business Impact

The data does not indicate any specific involvement or benefit for small businesses in this contract extension. The primary awardee is a large corporation, IBM.

Oversight & Accountability

Oversight is needed to ensure the necessity and cost-effectiveness of this 4-month extension. The Department of Homeland Security and USCIS should provide clear justification for the extension and monitor performance closely.

Related Government Programs

Computer and Software Stores
Department of Homeland Security Contracting
U.S. Citizenship and Immigration Services Programs

Risk Flags

High cost for a short extension period
Potential for vendor lock-in
Lack of detailed justification for extension
Time and Materials contract type can lead to cost overruns
Limited transparency on specific services provided

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $45.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. EXTENSTION OF OPTION 7 (4 MONTHS) CLINS 7001A&001B, 7003 AND 0002AX UNDER SA CONTRACT HSHQDC-09-J-00001 (5/20/14-TO FUND THE EXECUTION OF THE IBM BRIDGE CONTRACT)

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. Citizenship and Immigration Services).

What is the total obligated amount?

The obligated amount is $45.8 million.

What is the period of performance?

Start: 2014-06-01. End: 2015-05-31.

What specific services are being funded by this 4-month extension, and why was a full competitive procurement not initiated for these needs?

The extension is to fund the execution of the IBM Bridge Contract, covering CLINS 7001A&001B, 7003, and 0002AX. A full competitive procurement was likely not initiated due to the short duration and the nature of extending existing support, potentially to maintain continuity of operations for critical USCIS systems.

How does the $45.8 million cost for a 4-month extension compare to industry benchmarks for similar IT support services?

Without specific details on the services rendered, a precise benchmark is difficult. However, $45.8 million for four months equates to over $11 million per month, which is substantial. This necessitates a detailed cost analysis against comparable government or commercial IT support contracts to ensure fair pricing.

What measures are in place to ensure effective performance and prevent cost overruns under this time and materials contract extension?

Effective oversight by DHS and USCIS is critical. This includes rigorous monitoring of hours worked, services delivered, and adherence to the scope. Establishing clear performance metrics and regular progress reviews can help mitigate risks associated with time and materials contracts and prevent uncontrolled cost escalation.

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: $45,804,405

Exercised Options: $45,804,405

Current Obligation: $45,804,405

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4984H

IDV Type: FSS

Timeline