IBM awarded $14.3M for R&D services, with a 5-year performance period and cost-sharing contract type

Contract Overview

Contract Amount: $14,269,309 ($14.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2004-06-30

End Date: 2009-12-31

Contract Duration: 2,010 days

Daily Burn Rate: $7.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST SHARING

Sector: R&D

Official Description: 200409!002921!1700!D710J !SPACE AND NAVAL WARFARE SYSTEMS !N6600104C8032 !A!N! !N! ! !20040630!20051230!084006741!084006741!001368083!N!INTERNATIONAL BUSINESS MACHINE!1101 KITCHAWAN ROAD !YORKTOWN HEIGH !NY!10598!84088!119!36!YORKTOWN HEIGHTS !WESTCHESTER !NEW YORK !+000001731329!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !000 !* !541710!E! !3! ! ! ! ! !99990909!B!F!N!A! !A!N!T!2!001!E! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! !1700!N66001!0001! !

Place of Performance

Location: YORKTOWN HEIGHTS, WESTCHESTER County, NEW YORK, 10598

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: 200409!002921!1700!D710J !SPACE AND NAVAL WARFARE SYSTEMS !N6600104C8032 !A!N! !N! ! !20040630!20051230!084006741!084006741!001368083!N!INTERNATIONAL BUSINESS MACHINE!1101 KITCHAWAN ROAD !YORKTOWN HEIGH !NY!10598!84088!119!36!YORKTOWN HEIGHTS !WEST… Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. The contract has a significant performance period, spanning over five years. 3. Cost-sharing contract type suggests shared financial risk and potential for cost savings. 4. The awardee, IBM, is a major technology and consulting firm with extensive government contracting experience. 5. The contract falls under the 'Research and Development in Physical, Engineering, and Life Sciences' NAICS code. 6. The contract was awarded under full and open competition after exclusion of sources.

Value Assessment

Rating: good

The contract value of $14.3 million over five years averages to approximately $2.86 million per year. This appears to be a reasonable investment for advanced research and development services, especially considering the potential for innovation and technological advancement. Benchmarking against similar R&D contracts would provide further context, but the cost-sharing nature of the contract suggests an effort to optimize value by distributing risk.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on certain criteria. The number of bidders is not explicitly stated, but the 'full and open' designation generally implies a competitive process designed to solicit proposals from a wide range of qualified offerors, which can lead to better pricing and innovation.

Taxpayer Impact: This competitive approach aims to ensure that taxpayer dollars are used efficiently by fostering a marketplace where contractors vie to offer the best value, potentially driving down costs and improving the quality of research outcomes.

Public Impact

Benefits the Department of Defense by advancing research in critical physical, engineering, and life sciences. Services delivered likely include research, analysis, and development of new technologies or scientific understanding. Geographic impact is centered in New York, where IBM's facility is located. Workforce implications include employment opportunities for scientists, engineers, and support staff at IBM.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type warrants further investigation to understand the rationale and potential impact on competition.
The cost-sharing nature, while potentially beneficial, requires careful monitoring to ensure equitable distribution of costs and benefits.
The specific R&D focus is broad; clarity on project milestones and deliverables would enhance performance assessment.

Positive Signals

Award to a well-established and experienced contractor like IBM suggests a high likelihood of successful execution.
The five-year performance period allows for in-depth research and development, fostering long-term innovation.
The 'full and open' competition, even with exclusions, suggests an intent to leverage market capabilities.
The cost-sharing model can incentivize efficiency and shared commitment to project success.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, aiming to develop next-generation technologies and capabilities. The market for such services is characterized by specialized expertise, high intellectual property value, and significant government investment. Comparable spending benchmarks would typically involve analyzing other R&D contracts awarded by the Department of Defense or other federal agencies for similar scientific endeavors.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the nature of advanced R&D and the prime contractor being IBM, it is unlikely that significant subcontracting opportunities for small businesses would be mandated under this specific award, unless explicitly included in the contract terms. Further review of subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. Accountability measures would be tied to the research milestones and deliverables outlined in the contract. Transparency is facilitated through contract databases, though specific project details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) programs
Naval Research Laboratory initiatives
Air Force Research Laboratory projects
Army Futures Command research

Risk Flags

Competition Type Ambiguity
R&D Outcome Uncertainty
Cost Sharing Management
Long Performance Period Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. 200409!002921!1700!D710J !SPACE AND NAVAL WARFARE SYSTEMS !N6600104C8032 !A!N! !N! ! !20040630!20051230!084006741!084006741!001368083!N!INTERNATIONAL BUSINESS MACHINE!1101 KITCHAWAN ROAD !YORKTOWN HEIGH !NY!10598!84088!119!36!YORKTOWN HEIGHTS !WESTCHESTER !NEW YORK !+000001731329!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !000 !* !541710!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.3 million.

What is the period of performance?

Start: 2004-06-30. End: 2009-12-31.

What specific research areas are covered under this contract?

The contract data indicates the NAICS code 541710, which covers 'Research and Development in the Physical, Engineering, and Life Sciences.' While this provides a broad classification, the specific research areas are not detailed in the provided data. Typically, such contracts would involve detailed statements of work outlining specific scientific objectives, methodologies, and expected outcomes. These could range from materials science, advanced computing, aerospace engineering, biotechnology, to various other fields critical for national defense. Further inquiry into the contract's statement of work would be necessary to identify the precise research domains.

How does the cost-sharing arrangement work, and what are its implications for value?

A cost-sharing contract means that both the government and the contractor bear a portion of the project costs. The exact cost-sharing ratio is not specified in the provided data. This arrangement can incentivize the contractor to manage costs effectively, as they have a direct financial stake in the project's outcome. It can also lead to innovation as the contractor may invest their own resources in exploring novel approaches. For the government, it can potentially reduce the upfront financial burden and ensure a stronger commitment from the contractor. However, it requires robust oversight to ensure fair cost allocation and prevent potential disputes.

What is the significance of 'full and open competition after exclusion of sources'?

This contract type signifies that the competition was initially intended to be open to all qualified sources. However, certain sources were subsequently excluded. The reasons for exclusion are not provided but could be based on factors such as security clearances, specific technical capabilities, past performance, or other criteria deemed essential for the project. While 'full and open' competition is generally preferred for maximizing value, the exclusion of sources means the competitive pool was narrowed. Understanding the justification for these exclusions is key to assessing whether the competition was truly optimal for achieving the best value for taxpayers.

What is IBM's track record with similar R&D contracts for the Department of Defense?

International Business Machines (IBM) has a long and extensive history of contracting with the U.S. federal government, including the Department of Defense, across a wide range of services, including research and development. Given IBM's status as a major technology corporation, it possesses significant expertise and resources applicable to advanced R&D. While specific details on their past performance for similar R&D contracts are not in this data snippet, their general track record suggests a capacity to undertake complex projects. A deeper analysis would involve reviewing past performance evaluations and contract histories for IBM's R&D work within the DoD.

How does the $14.3 million award compare to typical R&D spending in this sector?

The $14.3 million award for a five-year R&D effort, averaging approximately $2.86 million annually, falls within a common range for specialized research projects. Federal R&D spending is substantial, with agencies like the Department of Defense investing billions annually in scientific and technological advancement. The specific value of this contract should be benchmarked against other contracts awarded under NAICS code 541710, particularly those with similar objectives and durations. Without broader market data, it's difficult to definitively label it as high or low, but it represents a significant investment in a specific area of R&D.

What are the potential risks associated with this contract?

Potential risks include the inherent uncertainties in R&D, where outcomes are not guaranteed. The cost-sharing aspect, if not managed properly, could lead to disputes over cost allocation. The exclusion of sources in the competition process might limit the range of innovative solutions considered. Furthermore, the long duration of the contract (five years) increases the risk of scope creep, technological obsolescence, or changes in government priorities. Effective risk mitigation would involve clear performance metrics, robust oversight, and flexible contract management.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST SHARING (T)

Evaluated Preference: NONE

Contractor Details

Address: 1101 KITCHAWAN ROAD, YORKTOWN HEIGH, NY

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,613,076

Exercised Options: $19,026,224

Current Obligation: $14,269,309

Contract Characteristics

Cost or Pricing Data: YES

Timeline