DoD's $24.5M IBM Contract for P2P, O2C, B2R, and CAD Services Under Scrutiny

Contract Overview

Contract Amount: $24,495,786 ($24.5M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2015-08-01

End Date: 2018-07-31

Contract Duration: 1,095 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF DAI P2P, O2C B2R AND CAD SUSTAINMENT AND DEVELOPMENT SERVICES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF DAI P2P, O2C B2R AND CAD SUSTAINMENT AND DEVELOPMENT SERVICES Key points: 1. Contract awarded to IBM for critical sustainment and development services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract value of $24.5M over three years warrants a review of its cost-effectiveness. 4. Services include custom computer programming, indicating a focus on specialized IT solutions.

Value Assessment

Rating: fair

The contract's fixed price structure aims to control costs. However, without specific per-unit data, a direct comparison to similar custom programming services is challenging. The total award value of $24.5M over three years suggests a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders participated. This method generally promotes price discovery and competitive pricing, though the final negotiated price is key.

Taxpayer Impact: Taxpayer funds are being utilized for specialized IT development and sustainment services. The effectiveness of the competition in securing optimal pricing will determine the ultimate taxpayer impact.

Public Impact

Ensures continued operation and development of critical Defense Department financial and procurement systems. Supports the Department of Defense's modernization efforts in financial management and business processes. Potential for improved efficiency and integration across various defense supply chain and financial operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific per-unit cost data for benchmarking.
Potential for scope creep in custom development services.
Long contract duration may outpace technological advancements.

Positive Signals

Awarded under full and open competition.
Firm Fixed Price contract type.
Services support critical defense operations.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. Spending in this area is substantial across government, with benchmarks varying widely based on complexity and service level agreements.

Small Business Impact

The contract was awarded to a large business (IBM) and there is no indication of small business subcontracting in the provided data. This suggests limited direct benefit to small businesses from this specific award.

Oversight & Accountability

The contract's duration and value necessitate robust oversight to ensure deliverables meet requirements and costs remain justified. The Defense Logistics Agency's role in managing this contract is crucial for accountability.

Related Government Programs

Custom Computer Programming Services
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Significant contract value over a multi-year period.
Custom programming services can be prone to scope creep.
Long contract duration may not keep pace with rapid technological change.
Lack of detailed cost breakdown or per-unit pricing for benchmarking.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF DAI P2P, O2C B2R AND CAD SUSTAINMENT AND DEVELOPMENT 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 (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $24.5 million.

What is the period of performance?

Start: 2015-08-01. End: 2018-07-31.

What specific performance metrics are in place to ensure the value delivered by IBM aligns with the $24.5M investment?

The provided data does not detail specific performance metrics. However, typical government contracts of this nature include Service Level Agreements (SLAs) and key performance indicators (KPIs) tied to system uptime, response times, and successful completion of development milestones. The Defense Logistics Agency would be responsible for monitoring these metrics and ensuring IBM meets its contractual obligations.

Given the custom nature of the services, what are the primary risks associated with cost overruns or schedule delays?

The primary risks include scope creep, where requirements expand beyond the initial agreement, leading to increased costs and delays. Unforeseen technical challenges in custom development can also impact timelines and budgets. Effective project management, clear change control processes, and regular progress reviews by the DLA are essential to mitigate these risks.

How does the sustainment and development of these P2P, O2C, B2R, and CAD systems contribute to the overall effectiveness of the DoD's financial and operational capabilities?

These systems are fundamental to the DoD's financial management and business operations, covering processes from procure-to-pay (P2P), order-to-cash (O2C), budget-to-report (B2R), and computer-aided design (CAD). Their effective sustainment and development ensure seamless financial transactions, accurate reporting, and efficient operational support, directly impacting the DoD's ability to manage resources and execute its mission.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11107 SUNSET HILLS RD STE 500, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,238,885

Exercised Options: $26,238,885

Current Obligation: $24,495,786

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $11,228,846

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline