IBM contract for IT services awarded by Interior Department for over $20.7M

Contract Overview

Contract Amount: $20,728,439 ($20.7M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of the Interior

Start Date: 2006-11-16

End Date: 2008-05-30

Contract Duration: 561 days

Daily Burn Rate: $36.9K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BUSINESS BLUEPRINT

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $20.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: BUSINESS BLUEPRINT Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost savings. 2. The contract duration of 561 days suggests a medium-term engagement for IT services. 3. Fixed-price contract type aims to control costs, but the lack of competition limits price discovery. 4. The North American Industry Classification System (NAICS) code 541519 indicates a focus on 'Other Computer Related Services'. 5. The award was a Delivery Order (DO) under a larger contract vehicle. 6. The contractor, IBM, is a large, established entity in the IT services sector.

Value Assessment

Rating: fair

Benchmarking the value of this specific $20.7 million contract is challenging without more detailed service descriptions and performance metrics. As a non-competitive award, it bypasses the typical price discovery mechanisms that occur during open competition. While a firm-fixed-price contract can offer cost certainty, the absence of competitive bids means there's no direct comparison to market rates or alternative providers to definitively assess if the pricing represents excellent value for money. Further analysis would require understanding the specific services rendered and comparing them to similar sole-source or limited-competition IT service contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order. The specific justification for this sole-source award is not provided in the data, but it implies that only one source was deemed capable of fulfilling the requirement. This lack of competition means that the Department of the Interior did not solicit bids from multiple vendors, potentially limiting the opportunity to secure the most cost-effective solution through a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through open competition among multiple bidders.

Public Impact

The primary beneficiary of this contract is the Department of the Interior, receiving IT services. The services delivered are categorized under 'Other Computer Related Services', suggesting a broad range of IT support. The geographic impact is likely concentrated within the operational areas of the Department of the Interior, primarily in Virginia where the contractor is located. The contract supports the IT infrastructure and operations necessary for the Department's mission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Potential for vendor lock-in due to sole-source nature.
Limited transparency into the justification for non-competitive award.

Positive Signals

Firm-fixed-price contract type provides cost certainty.
Award to a large, established contractor like IBM may indicate reliability.
Delivery order structure suggests it's part of a pre-existing framework.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically 'Other Computer Related Services'. The IT services market is vast and highly competitive, with numerous large and small businesses offering a wide array of solutions. Contracts for IT services are a significant portion of federal spending, supporting everything from infrastructure and cybersecurity to software development and data analytics. Benchmarking this $20.7 million contract would involve comparing it to other federal IT service contracts, particularly those awarded to large system integrators for similar types of services, while also considering the competitive landscape.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor is not a small business (ss: false). Therefore, this specific award does not directly contribute to small business set-aside goals. There is no information provided regarding subcontracting plans, so the impact on the small business ecosystem through subcontracting opportunities is unknown. The focus on a large, established contractor like IBM suggests the primary benefits are directed towards major players in the IT industry.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Interior. As a delivery order under a larger contract vehicle, there may be established oversight mechanisms tied to that parent contract. Transparency is limited by the non-competitive nature of the award; the specific justification for the sole-source award would be a key area for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Services Contracts
Department of the Interior IT Spending
Large System Integrator Contracts
Non-Competitive IT Procurements

Risk Flags

Non-competitive award
Lack of detailed service description
Potential for higher cost due to no competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $20.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. BUSINESS BLUEPRINT

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 $20.7 million.

What is the period of performance?

Start: 2006-11-16. End: 2008-05-30.

What specific 'Other Computer Related Services' were provided under this contract?

The provided data only specifies the NAICS code '541519 - Other Computer Related Services' and the contractor, IBM. To understand the specific services, one would need to consult the contract's Statement of Work (SOW) or performance work statement (PWS). This category is broad and can encompass a wide range of activities, including IT consulting, systems integration, custom software development, IT support, and network management. Without the SOW, it's impossible to detail the exact nature of the services rendered, which is crucial for assessing value and performance.

What was the justification for awarding this contract on a non-competitive basis?

The data explicitly states this was a 'NON-COMPETITIVE DELIVERY ORDER' (ct: NON-COMPETITIVE DELIVERY ORDER). Federal procurement regulations (like the Federal Acquisition Regulation - FAR) outline specific circumstances under which contracts can be awarded without full and open competition. These typically include situations where only one responsible source is available, or in cases of urgent need, or for follow-on work to a previously competed contract where it's deemed to be in the government's best interest. The specific justification document, often referred to as a Justification and Approval (J&A) for Other Than Full and Open Competition (OTFOC), would detail the rationale. Accessing this document would be necessary to understand why IBM was the sole source selected.

How does the $20.7 million value compare to similar IT services contracts awarded by the Department of the Interior?

Comparing this $20.7 million contract requires context regarding the scope and duration of services. The Department of the Interior procures a wide range of IT services, from small, specialized projects to large-scale enterprise solutions. A $20.7 million contract over approximately 1.5 years (561 days) for 'Other Computer Related Services' is a substantial award. To benchmark it effectively, one would need to identify comparable contracts within the Department of the Interior or other agencies that procured similar services (e.g., IT modernization, system integration, managed IT services) from large IT vendors over a similar timeframe. Without such comparisons, it's difficult to definitively state if the value is high or low relative to the market.

What is IBM's track record with the Department of the Interior for IT services?

IBM is a major federal contractor with a long history of providing IT services across numerous government agencies, including the Department of the Interior. While this specific data point doesn't detail IBM's past performance with DOI, it's reasonable to assume IBM has held multiple contracts with the agency over the years, given its size and market presence. A comprehensive assessment of IBM's track record would involve reviewing historical contract awards, performance evaluations (like Contractor Performance Assessment Reporting System - CPARS), and any past issues or successes related to IT service delivery to the Department of the Interior.

What are the potential risks associated with a sole-source IT contract of this magnitude?

The primary risks associated with a sole-source IT contract of this magnitude include: 1) **Higher Costs:** Without competition, the government may pay a premium compared to what could be achieved through competitive bidding. 2) **Limited Innovation:** The lack of competitive pressure might reduce incentives for the contractor to introduce innovative solutions or efficiencies. 3) **Vendor Lock-in:** The agency could become dependent on the sole provider, making future transitions difficult and potentially costly. 4) **Reduced Accountability:** While performance standards exist, the absence of competing alternatives can sometimes lessen the urgency for the contractor to exceed expectations. 5) **Potential for Scope Creep:** Without competitive constraints, there might be a greater risk of contract modifications leading to increased costs and extended timelines.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,702,483

Exercised Options: $20,728,439

Current Obligation: $20,728,439

Parent Contract

Parent Award PIID: INN06PC10435

IDV Type: IDC

Timeline