Navy's $58.6M IBM ERP Support Contract Awarded Under Full and Open Competition

Contract Overview

Contract Amount: $58,594,384 ($58.6M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2012-06-17

End Date: 2015-12-14

Contract Duration: 1,275 days

Daily Burn Rate: $46.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NAVY ERP HARDWARE AND SOFTWARE SUPPORT SERVICES

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21401, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $58.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: NAVY ERP HARDWARE AND SOFTWARE SUPPORT SERVICES Key points: 1. Contract awarded to IBM for ERP hardware and software support services. 2. Significant spending on IT infrastructure and maintenance within the Department of the Navy. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract duration was 1275 days, indicating a medium-term support requirement.

Value Assessment

Rating: fair

The contract value of $58.6 million over approximately 3.5 years averages to about $16.7 million annually. Benchmarking this against similar IT support contracts is difficult without more specific service details, but it appears to be within a reasonable range for enterprise-level support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, which generally promotes competitive pricing and allows for a wide range of potential bidders. This method aims to ensure the government receives the best value through a robust price discovery process.

Taxpayer Impact: The use of full and open competition is intended to maximize taxpayer value by fostering a competitive environment that drives down costs and improves service quality.

Public Impact

Ensures continued operation of critical Navy Enterprise Resource Planning (ERP) systems. Supports the technological backbone for naval operations and administration. Potential for modernization and efficiency gains through ongoing vendor support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or KPIs in provided data.
Potential for vendor lock-in with long-term IT support contracts.
Cost overruns are a common risk in complex IT projects.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
IBM is a major IT provider with extensive experience.
Contract supports critical Navy IT infrastructure.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on enterprise resource planning (ERP) systems. Spending on IT support services for large government agencies is substantial, with benchmarks varying widely based on system complexity and scope of services.

Small Business Impact

The data indicates the prime contractor is IBM, a large business. There is no explicit information provided regarding subcontracting opportunities for small businesses on this particular contract.

Oversight & Accountability

Oversight would typically involve contract performance reviews, milestone tracking, and financial audits by the Department of the Navy to ensure IBM meets contractual obligations and manages costs effectively.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for cost overruns in IT support contracts.
Risk of vendor lock-in impacting future flexibility.
Dependence on a single vendor for critical ERP system support.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. NAVY ERP HARDWARE AND SOFTWARE SUPPORT SERVICES

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $58.6 million.

What is the period of performance?

Start: 2012-06-17. End: 2015-12-14.

What specific hardware and software components are covered under this support contract, and how do they align with the Navy's current IT modernization strategy?

The provided data does not specify the exact hardware and software components. Understanding this would require reviewing the contract's Statement of Work (SOW). Alignment with modernization strategies is crucial; if the supported systems are legacy, the contract might hinder or necessitate specific upgrade paths, impacting long-term value and efficiency.

What are the key performance indicators (KPIs) and service level agreements (SLAs) established for this contract, and how is IBM's performance measured against them?

Key performance indicators and service level agreements are not detailed in the provided summary data. Effective oversight necessitates clearly defined metrics for uptime, response times, issue resolution, and software update delivery. Performance measurement against these SLAs is critical for ensuring the Navy receives the contracted value and maintains operational readiness.

What is the total cost of ownership for the Navy's ERP system, including this support contract and any associated licensing, upgrade, or implementation costs over its lifecycle?

The provided data only reflects the cost of hardware and software support services ($58.6 million). A comprehensive total cost of ownership (TCO) analysis would need to incorporate initial acquisition costs, ongoing licensing fees, potential upgrade expenses, internal personnel costs for system management, and any related training or integration efforts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002411R3382

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: $59,559,832

Exercised Options: $59,559,832

Current Obligation: $58,594,384

Subaward Activity

Number of Subawards: 53

Total Subaward Amount: $13,935,306

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4364

IDV Type: IDC

Timeline