IBM contract for Secure Flight systems development and support valued at $38.3M

Contract Overview

Contract Amount: $38,303,645 ($38.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2010-08-27

End Date: 2012-09-28

Contract Duration: 763 days

Daily Burn Rate: $50.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: UNDER THIS WORK ORDER THE CONTRACTOR SHALL PROVIDE THE DEVELOPMENT, TESTING, DEPLOYMENT, AND RELATED INFRASTRUCTURE SUPPORT SERVICES FOR THE AUTOMATED SYSTEMS SUPPORTING SECURE FLIGHT. THE CONTRACTOR SHALL ALSO PROVIDE TIER 3 SUPPORT FOR THE SF PLATFORM.

Place of Performance

Location: ANNAPOLIS JUNCTION, HOWARD County, MARYLAND, 20701

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $38.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: UNDER THIS WORK ORDER THE CONTRACTOR SHALL PROVIDE THE DEVELOPMENT, TESTING, DEPLOYMENT, AND RELATED INFRASTRUCTURE SUPPORT SERVICES FOR THE AUTOMATED SYSTEMS SUPPORTING SECURE FLIGHT. THE CONTRACTOR SHALL ALSO PROVIDE TIER 3 SUPPORT FOR THE SF PLATFORM. Key points: 1. Contract focuses on critical infrastructure for aviation security. 2. Services include development, testing, deployment, and ongoing support. 3. The contract duration was 763 days. 4. This represents a significant investment in automated systems for national security. 5. The contractor, IBM, is a major player in IT services. 6. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The contract value of $38.3 million for a two-year period for complex IT development and support services appears within a reasonable range for a project of this nature. However, without specific benchmarks for Secure Flight system development or comparable Tier 3 support contracts, a precise value-for-money assessment is difficult. The Cost Plus Fixed Fee (CPFF) contract type introduces some risk, as it incentivizes the contractor to incur costs, though the fixed fee component provides some cost control. Further analysis would require comparing the delivered functionality and performance against the initial objectives and industry standards for similar systems.

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 competitive process is generally expected to yield better pricing and service offerings for the government. The number of bidders is not specified, but the fact that it was competed openly suggests a healthy market for these types of services. The open competition is a positive indicator for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: Taxpayers benefit from the competitive process through potentially lower overall costs and access to innovative solutions that might not be available through sole-source or limited competition.

Public Impact

Benefits air travelers and the broader aviation industry through enhanced security. Delivers critical IT infrastructure and support for the Secure Flight program. Impacts national security by improving passenger screening processes. Supports a workforce involved in the development, testing, and maintenance of advanced security systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize cost incurrence.
Lack of specific performance metrics makes it hard to gauge efficiency.
Long-term sustainment costs beyond this initial contract are not detailed.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Contractor (IBM) has extensive experience in large-scale IT projects.
Focus on critical aviation security infrastructure is a positive national priority.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on software development, system integration, and infrastructure support for a government security program. The market for such services is large and competitive, with many established players capable of undertaking complex projects. The Transportation Security Administration (TSA) relies heavily on IT solutions to manage and secure air travel. Benchmarking this contract's value against other large-scale government IT procurements for similar security-related systems would provide further context on its relative cost-effectiveness.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. As a large contract awarded to a major corporation like IBM, it is possible that subcontracting opportunities for small businesses exist, but this information is not explicitly detailed. Further investigation into the contract's subcontracting plan would be needed to assess its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and program management offices, as well as the Transportation Security Administration. Inspector General oversight is standard for federal contracts of this magnitude, ensuring accountability and investigating potential fraud, waste, or abuse. Transparency is generally maintained through contract award databases and public reporting requirements, though specific performance details may be sensitive.

Related Government Programs

Secure Flight Program
Aviation Security Technology
Department of Homeland Security IT Modernization
Federal Passenger Screening Systems

Risk Flags

Cost Plus Fixed Fee contract type requires careful cost oversight.
Potential for cost overruns if contractor efficiency is not managed.
Dependence on a single contractor for critical system support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $38.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. UNDER THIS WORK ORDER THE CONTRACTOR SHALL PROVIDE THE DEVELOPMENT, TESTING, DEPLOYMENT, AND RELATED INFRASTRUCTURE SUPPORT SERVICES FOR THE AUTOMATED SYSTEMS SUPPORTING SECURE FLIGHT. THE CONTRACTOR SHALL ALSO PROVIDE TIER 3 SUPPORT FOR THE SF PLATFORM.

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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $38.3 million.

What is the period of performance?

Start: 2010-08-27. End: 2012-09-28.

What is the track record of IBM in delivering similar large-scale IT development and support contracts for federal agencies, particularly in the security sector?

IBM has a long and extensive history of delivering large-scale IT solutions and support services to numerous federal agencies, including those within the defense and intelligence communities, as well as civilian agencies like the Department of Homeland Security (DHS). Their track record includes managing complex system development, integration, and sustainment projects. For instance, IBM has been involved in significant IT modernization efforts for agencies such as the Social Security Administration and the Department of Veterans Affairs. In the security sector, their experience often involves managing sensitive data and critical infrastructure, aligning with the requirements of the Secure Flight program. While specific performance metrics for past contracts are not always publicly available, IBM's continued success in winning and executing large federal contracts suggests a generally positive track record in meeting government requirements, though like any large contractor, they have also faced scrutiny and challenges on specific projects.

How does the $38.3 million value of this contract compare to similar IT development and support contracts for aviation security systems?

Comparing the $38.3 million value requires context regarding the scope, duration, and complexity of the services provided. For a two-year contract (approximately 763 days) involving the development, testing, deployment, and Tier 3 support for a critical system like Secure Flight, this figure appears to be within a reasonable range for a major IT undertaking. However, direct comparisons are challenging without access to detailed cost breakdowns and specific performance metrics. Similar contracts for developing or significantly upgrading passenger screening technologies, air traffic control systems, or other national security-related IT infrastructure can range from tens to hundreds of millions of dollars, depending on the scale and technological sophistication. The Cost Plus Fixed Fee (CPFF) nature of this contract also means the final cost could fluctuate based on actual expenses incurred, making a precise benchmark difficult. It is advisable to consult government contract databases and industry reports for comparable procurements to establish a more robust benchmark.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for developing and supporting a critical system like Secure Flight?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, such as the one for the Secure Flight system, is that the government may end up paying more than necessary if the contractor's costs are not efficiently managed. While the 'fixed fee' provides a ceiling on the profit, the 'cost plus' element means the government reimburses the contractor for all allowable costs incurred. This can create less incentive for the contractor to control expenses compared to fixed-price contracts. If the contractor incurs higher-than-expected costs due to inefficiencies, scope creep, or unforeseen technical challenges, the government bears that burden. For a critical system like Secure Flight, ensuring robust oversight, clear performance metrics, and stringent cost controls is paramount to mitigate these risks and ensure the government receives good value for its investment. The government must actively monitor expenditures and contractor performance to prevent cost overruns.

What is the expected effectiveness of the Secure Flight system based on the services provided under this contract?

The effectiveness of the Secure Flight system, supported by this contract, is intended to enhance aviation security by improving the accuracy and efficiency of passenger screening. The contract covers development, testing, deployment, and ongoing Tier 3 support, which are all crucial for ensuring the system functions as intended. Effective implementation means the system can accurately identify individuals on watchlists, differentiate them from the general traveling public, and facilitate smoother passenger processing. The success of the system hinges on the quality of the software developed, the robustness of the testing and deployment phases, and the responsiveness of the support services. While this contract focuses on the technical delivery and support, the ultimate effectiveness is measured by its contribution to preventing acts of terrorism and ensuring the safety of air travel, which is a continuous process evaluated through operational performance and security incident analysis.

How has federal spending on aviation security IT systems, including Secure Flight, evolved over time?

Federal spending on aviation security IT systems, including programs like Secure Flight, has seen a significant and generally increasing trend, particularly following the September 11, 2001, terrorist attacks. The establishment of the Transportation Security Administration (TSA) in 2001 marked a major shift, leading to substantial investments in technology to enhance passenger and baggage screening, data analysis, and information sharing. Secure Flight itself, designed to compare passenger information against government watchlists, represents a key component of this evolving security architecture. Over the years, funding has been allocated for the development, implementation, and continuous improvement of such systems, driven by technological advancements, evolving threat landscapes, and legislative mandates. While specific year-over-year spending figures for individual programs fluctuate based on project phases and budget appropriations, the overall trajectory indicates a sustained commitment to leveraging IT for national security in the aviation sector. This contract, awarded in 2010, falls within a period of significant investment in these capabilities.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Computer and Computer Peripheral Equipment and Software Merchant Wholesalers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $57,263,259

Exercised Options: $38,303,645

Current Obligation: $38,303,645

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSTS0307ACIO925

IDV Type: BPA

Timeline