DHS awarded IBM $19M for IGF SF Development Support, a 460-day contract

Contract Overview

Contract Amount: $19,030,837 ($19.0M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2012-09-09

End Date: 2013-12-13

Contract Duration: 460 days

Daily Burn Rate: $41.4K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::CT::IGF SF DEVELOPMENT SUPPORT

Place of Performance

Location: SPRINGFIELD, ACCOMACK County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $19.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::CT::IGF SF DEVELOPMENT SUPPORT Key points: 1. Contract value of $19M for a 460-day period suggests a significant investment in software development. 2. The contract was competed under SAP, indicating a potentially competitive process. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to ensure cost control. 4. The award to a large, established contractor like IBM may indicate a need for specialized expertise. 5. The contract duration of 460 days allows for substantial development and implementation phases. 6. The North American Industry Classification System (NAICS) code 423430 points to a focus on computer equipment and software wholesaling, which may be related to the infrastructure or licensing aspects of the development support.

Value Assessment

Rating: fair

The contract value of $19 million over approximately 15 months (460 days) averages to roughly $1.27 million per month. Without specific deliverables or performance metrics, it's difficult to benchmark this against similar contracts. The CPFF pricing structure, while common for development, can lead to cost overruns if not managed tightly. The value appears substantial for software development support, suggesting complex or critical system needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'COMPETED UNDER SAP' (Small Acquisition Procedures), which typically implies a streamlined process for smaller value procurements. While competed, SAP procedures may not always achieve the same level of broad competition as full and open competition. The number of bidders is not specified, but the use of SAP suggests it might have been a limited number of pre-qualified vendors or a specific solicitation process.

Taxpayer Impact: Competing under SAP may limit the potential for the lowest possible price compared to a full and open competition, but it can also lead to faster award times. Taxpayers benefit from competition, but the extent of savings is unclear without knowing the number of bids received.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving support for its Information Gateway Framework (IGF) Software Development. This contract delivers critical software development services, likely enhancing the functionality, security, or efficiency of TSA systems. The geographic impact is primarily within the TSA's operational domain, likely supporting national transportation security infrastructure. Workforce implications could include the direct employment of software developers, project managers, and support staff by IBM, as well as potential indirect impacts on TSA personnel managing the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize profit if not closely monitored.
The limited competition under SAP might have resulted in a higher price than could have been achieved through full and open competition.
The specific nature of 'IGF SF DEVELOPMENT SUPPORT' is broad and requires detailed oversight to ensure alignment with TSA's strategic goals.

Positive Signals

The contract was competed, indicating an effort to obtain services through a competitive process.
Awarding to a large, experienced contractor like IBM suggests a focus on reliability and proven capability for critical development tasks.
The contract duration allows for a structured and comprehensive development lifecycle.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software development and support. The IT services market is vast and highly competitive, with significant government spending allocated to software development, maintenance, and modernization. Benchmarking this contract's value would require comparing it to similar custom software development projects for federal agencies, considering factors like complexity, security requirements, and the specific technologies involved. The NAICS code 423430, while related to computer equipment wholesaling, might indicate the procurement of software licenses or hardware necessary for the development environment.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to IBM, a large corporation, suggests that small businesses were likely not the primary focus of this specific procurement. However, large prime contractors often utilize small business subcontractors. Further analysis would be needed to determine if IBM is meeting any subcontracting goals with small businesses for this contract, which could provide opportunities for smaller firms within the IT ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Department of Homeland Security (DHS), specifically the Transportation Security Administration (TSA). The contract type (CPFF) necessitates robust financial oversight to scrutinize costs and ensure they are reasonable and allocable. Performance monitoring would involve tracking milestones, deliverables, and adherence to the Statement of Work. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal. The Inspector General for DHS would have jurisdiction to investigate potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal IT Software Development Contracts
Department of Homeland Security IT Services
Transportation Security Administration Systems Support
Information Gateway Framework (IGF) Programs
Cost Plus Fixed Fee IT Contracts

Risk Flags

Potential for cost overruns due to CPFF pricing structure.
Limited competition under SAP may not yield the best price.
Unclear specific deliverables and performance metrics without SOW.
NAICS code mismatch requires further clarification of contract scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $19.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::CT::IGF SF DEVELOPMENT 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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $19.0 million.

What is the period of performance?

Start: 2012-09-09. End: 2013-12-13.

What specific software or systems does the IGF SF Development Support contract pertain to, and what are the key objectives of this development?

The contract details refer to 'IGF SF DEVELOPMENT SUPPORT,' likely pertaining to the Information Gateway Framework (IGF) Software Factory (SF). The IGF is a critical component for TSA, potentially managing data integration, workflow automation, or security-related information across various transportation security operations. The 'Software Factory' aspect suggests a focus on developing, deploying, and managing software development processes and tools. Key objectives would likely include enhancing the capabilities of the IGF, improving its efficiency, ensuring its security, or adapting it to new operational requirements. Without access to the specific Statement of Work (SOW), the precise systems and objectives remain generalized, but it is clearly tied to TSA's core mission of ensuring transportation security through robust IT infrastructure.

How does the $19 million contract value compare to typical spending on similar software development projects within the federal government or specifically within TSA?

A $19 million contract for software development over approximately 15 months is a substantial investment. Federal IT spending varies widely based on project complexity, duration, and the criticality of the systems involved. For large-scale software development or modernization efforts within agencies like DHS/TSA, such figures are not uncommon, especially when dealing with complex, mission-critical systems. However, without specific benchmarks for 'IGF SF Development Support' or comparable TSA projects, a direct comparison is challenging. Factors like the novelty of the technology, the required security clearances, and the integration with legacy systems can significantly influence costs. Generally, this value suggests a project of considerable scope and importance.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for software development, and how are these typically mitigated?

The primary risk with CPFF contracts is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee representing profit. If costs escalate beyond initial estimates, the government pays more, and the contractor's profit margin (the fixed fee) remains constant. This can disincentivize cost control if not managed properly. Mitigation strategies include rigorous oversight of contractor expenditures, detailed audits of costs, clear definition of allowable costs in the contract, and strong performance management to ensure the contractor is delivering value for the costs incurred. Regular reviews and reporting requirements are crucial to identify and address potential cost creep early in the contract lifecycle.

What is the track record of International Business Machines Corporation (IBM) in delivering federal IT development contracts, particularly for agencies like DHS?

IBM has a long and extensive history of contracting with the U.S. federal government, including significant work with the Department of Homeland Security (DHS) and its various components like the Transportation Security Administration (TSA). They are a major provider of IT services, including software development, cloud computing, cybersecurity, and legacy system modernization. IBM's track record generally includes delivering large-scale, complex IT solutions. However, like any large contractor, specific contract performance can vary. Reviews of past performance are typically conducted during the procurement process. For DHS, IBM has been involved in numerous projects, ranging from infrastructure support to advanced analytics and application development, demonstrating a broad capability set.

How does the competition level ('COMPETED UNDER SAP') for this contract potentially impact its overall value and efficiency for taxpayers?

Competing under Small Acquisition Procedures (SAP) means the contract was likely solicited and awarded using streamlined processes designed for procurements below certain dollar thresholds (e.g., under the simplified acquisition threshold). While this can lead to faster award times and reduced administrative burden, it typically involves fewer bidders than full and open competition. The impact on taxpayer value is mixed: it ensures some level of competition, preventing sole-source awards, but may not achieve the same price discovery as a broader competition. If only a few vendors were aware of or eligible for the SAP solicitation, the government might not have received the most competitive pricing available in the market. The efficiency gain comes from reduced acquisition cycle time and administrative costs.

What are the implications of the NAICS code 423430 (Computer and Computer Peripheral Equipment and Software Merchant Wholesalers) for a software development support contract?

The assignment of NAICS code 423430, which typically covers the wholesale distribution of computer hardware and software, to a software development support contract is somewhat unusual. It might suggest that the contract involves the procurement, licensing, or integration of specific software products or platforms that IBM is authorized to distribute, or that the development work is closely tied to the infrastructure or hardware environment where the software will operate. Alternatively, it could reflect a broader categorization by the government where the primary function involves acquiring and managing software assets, even if the core service is development. This classification warrants a closer look at the contract's Statement of Work to understand the precise nature of the services and goods being acquired.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: HSTS0212RTTC148

Offers Received: 1

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: $27,377,837

Exercised Options: $19,030,837

Current Obligation: $19,030,837

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSTS0307ACIO925

IDV Type: BPA

Timeline