IBM contract for computer hardware and software stores reached over $99 million across 5 orders

Contract Overview

Contract Amount: $99,485,693 ($99.5M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of the Interior

Start Date: 2001-06-15

End Date: 2009-11-30

Contract Duration: 3,090 days

Daily Burn Rate: $32.2K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of the Interior obligated $99.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: Key points: 1. Value for money appears fair given the long duration and scope of services. 2. Competition dynamics indicate a competitive delivery order, suggesting potential for price negotiation. 3. Risk indicators are moderate, with a fixed-price contract type mitigating cost overrun risks. 4. Performance context shows a long-term engagement spanning nearly a decade. 5. Sector positioning is within IT hardware and software procurement, a common government need.

Value Assessment

Rating: fair

The total award of over $99 million across five delivery orders suggests a significant investment in IT infrastructure. Benchmarking against similar large-scale IT procurements is challenging without more granular data on the specific hardware and software acquired. However, the firm fixed-price contract type generally provides cost certainty for the government, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The presence of five distinct orders suggests a potentially ongoing need that was met through a competitive process. The level of competition, while not explicitly detailed by the number of bidders, is implied to be sufficient to drive a fair market price.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering price discovery and potentially leading to lower overall costs compared to sole-source or limited competition scenarios.

Public Impact

The Department of the Interior benefits from access to necessary computer hardware and software. Essential IT services and equipment are delivered to support departmental operations. The primary geographic impact is likely within Maryland, where the contract was administered. Workforce implications include ensuring IT staff have the tools needed for their roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific proprietary software or hardware was heavily emphasized.
Long contract duration could lead to technology obsolescence if not managed proactively.
Reliance on a single large contractor might limit opportunities for smaller, innovative vendors.

Positive Signals

Firm fixed-price contract type provides cost predictability.
Competitive award process suggests a degree of market vetting for pricing.
Long-term engagement indicates a stable supplier relationship for critical IT needs.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on the procurement of computer hardware and software. The market for government IT procurement is vast and highly competitive, with numerous vendors vying for contracts. This specific award represents a portion of the government's overall spending on IT infrastructure, which is critical for operational efficiency across all agencies.

Small Business Impact

Information regarding small business set-asides or subcontracting plans for this specific contract is not readily available in the provided data. However, large IT contracts often include provisions for small business participation, either through direct set-asides or subcontracting goals. The extent to which small businesses were involved would depend on the specific terms negotiated and the nature of the IT goods and services procured.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's contracting officers and program managers. Transparency is generally facilitated through contract databases like FPDS. Accountability measures are inherent in the firm fixed-price structure, which holds the contractor responsible for delivering goods and services within the agreed-upon price. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedule IT Contracts
Department of Defense IT Procurement
Federal Civilian Agency IT Modernization Programs

Risk Flags

Long contract duration may lead to technology obsolescence.
Lack of specific performance metrics requires further investigation.
Potential for unexercised options if contract structure allowed.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $99.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $99.5 million.

What is the period of performance?

Start: 2001-06-15. End: 2009-11-30.

What specific types of computer hardware and software were procured under this contract?

The provided data indicates the contract was for 'Computer and Software Stores' (NAICS code 443120), suggesting a broad range of IT equipment and software licenses. Without access to the detailed delivery orders or contract line item numbers (CLINs), it is impossible to specify the exact hardware (e.g., servers, desktops, peripherals) or software (e.g., operating systems, productivity suites, specialized applications) purchased. This level of detail is crucial for a comprehensive value assessment and understanding the specific technological capabilities acquired by the Department of the Interior.

How does the total award amount of over $99 million compare to similar IT procurements by the Department of the Interior during the contract period?

Comparing the $99 million award to other Department of the Interior IT procurements between 2001 and 2009 requires access to historical spending data for that agency. However, for a contract spanning nearly a decade and involving multiple delivery orders, this amount suggests a substantial and ongoing investment in IT infrastructure. It is likely representative of a significant portion of the department's IT budget during that era, especially if it encompassed core operational systems or widespread hardware refresh cycles. Further analysis would involve benchmarking against average IT spending per employee or per agency during that timeframe.

What were the primary risks associated with this firm fixed-price contract, and how were they managed?

For a firm fixed-price contract, the primary risk to the government is paying a premium if the contractor's costs are lower than anticipated. Conversely, the primary risk to the contractor is incurring costs exceeding the fixed price, potentially leading to financial losses or pressure to cut corners. Risks for the government could also include scope creep if not managed tightly, or the contractor delivering less-than-optimal solutions to maximize profit. Management of these risks would involve clear performance standards, rigorous acceptance testing, and active contract administration to ensure deliverables meet requirements and that the contractor adheres to the agreed-upon scope and quality.

What was the contractor's performance history with the Department of the Interior prior to and during this contract?

The provided data identifies INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM) as the contractor. IBM is a major technology provider with a long history of contracting with the U.S. federal government. Assessing their specific performance on this particular contract would require reviewing performance evaluations, past performance questionnaires, and any documented issues or commendations related to these five delivery orders. Generally, large contractors like IBM have extensive track records, and their performance can vary across different contracts and agencies. A review of their CPARS (Contractor Performance Assessment Reporting System) data, if available, would offer insights.

How did the number of delivery orders (5) impact the overall cost and efficiency of this contract?

Having five separate delivery orders under a larger contract vehicle could indicate a phased approach to procurement, allowing the agency to acquire IT resources as needs arose or budgets became available. This can offer flexibility. From a cost perspective, multiple orders might allow for re-competition or price adjustments if market conditions changed significantly over the contract's lifespan, potentially leading to better pricing on later orders. However, managing multiple orders can also increase administrative overhead for both the government and the contractor compared to a single, large order. The efficiency gain or loss depends on how well these orders were planned and executed.

What is the significance of the contract's end date (November 30, 2009) in relation to the start date (June 15, 2001)?

The significant duration of this contract, spanning over eight years from June 15, 2001, to November 30, 2009, highlights a long-term commitment by the Department of the Interior to procure computer hardware and software from IBM. Such extended periods are common for foundational IT infrastructure needs where stability and compatibility are paramount. This longevity suggests that the procured items were critical and likely formed the backbone of departmental IT systems for an extended period. It also implies that the initial procurement strategy was designed for sustained support and potential upgrades over a considerable timeframe, rather than short-term, project-specific needs.

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: COMPETITIVE DELIVERY ORDER

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

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: $105,750,606

Exercised Options: $105,750,606

Current Obligation: $99,485,693

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4984H

IDV Type: FSS

Timeline