DoD's $30.7M P2P Support Services Contract with IBM Faces Scrutiny for Value and Competition
Contract Overview
Contract Amount: $30,763,191 ($30.8M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Defense
Start Date: 2018-08-01
End Date: 2022-07-31
Contract Duration: 1,460 days
Daily Burn Rate: $21.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: IGF::OT::IGF DAI PROCURE TO PAY (P2P)SUPPORT SERVICES
Place of Performance
Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $30.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF DAI PROCURE TO PAY (P2P)SUPPORT SERVICES Key points: 1. The contract awarded to IBM for $30.7 million represents a significant investment in P2P support services. 2. IBM, a major player, secured this contract under full and open competition. 3. Potential risks include the cost-plus incentive fee structure and the lack of small business participation. 4. The IT sector, specifically custom computer programming services, is the focus of this spending.
Value Assessment
Rating: fair
The contract's Cost Plus Incentive Fee (CPIF) structure can lead to cost overruns if not managed carefully. Benchmarking against similar custom computer programming services contracts is difficult without more granular data on service delivery and performance metrics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the CPIF structure may incentivize higher costs, and the lack of small business participation limits the breadth of competition.
Taxpayer Impact: Taxpayer funds are utilized for this contract. The CPIF structure necessitates careful oversight to ensure cost efficiency and prevent unnecessary expenditure.
Public Impact
Ensures critical procurement-to-pay processes within the Department of Defense are supported. Potential for cost efficiencies through incentive fees, but also risk of overspending. Lack of small business involvement may limit innovation and economic opportunity for smaller firms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee structure
- No small business participation
- Long contract duration (4 years)
Positive Signals
- Full and open competition
- Awarded to a reputable large business
Sector Analysis
This contract falls within the Information Technology sector, specifically custom computer programming services. Spending benchmarks for similar large-scale P2P support services contracts can vary widely based on scope and complexity.
Small Business Impact
The contract explicitly states no small business participation (ss: false, sb: false). This indicates that opportunities for small businesses to contribute to or benefit from this significant IT services contract were not pursued or realized.
Oversight & Accountability
The Cost Plus Incentive Fee (CPIF) structure requires robust oversight from the Defense Logistics Agency to ensure IBM meets performance targets and cost controls. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to CPIF structure
- Lack of small business participation limits competition and innovation
- Contract duration is substantial, requiring long-term oversight
- Limited transparency on performance metrics driving incentive fees
Tags
custom-computer-programming-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF DAI PROCURE TO PAY (P2P)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 (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $30.8 million.
What is the period of performance?
Start: 2018-08-01. End: 2022-07-31.
What specific performance metrics were used to determine incentive fee payouts, and how effectively did IBM meet these metrics?
The provided data does not detail the specific performance metrics tied to the incentive fee payouts. Effective oversight would involve the Defense Logistics Agency rigorously tracking IBM's performance against pre-defined Key Performance Indicators (KPIs) related to the P2P support services. Without this information, assessing the true value and fairness of the incentive fee structure is challenging.
Given the CPIF structure, what mechanisms are in place to mitigate the risk of cost escalation and ensure optimal taxpayer value?
The CPIF structure inherently carries a risk of cost escalation. Mitigation relies heavily on the contracting agency's (DLA) robust oversight, including detailed cost analysis, regular performance reviews, and strict adherence to contract terms. The incentive portion should be designed to reward efficiency and cost savings, not just completion, requiring clear and measurable targets.
How does the absence of small business participation impact the overall effectiveness and innovation of the P2P support services provided?
The exclusion of small businesses can limit the diversity of innovative solutions and approaches to P2P support services. While large contractors like IBM have extensive resources, smaller, specialized firms often bring niche expertise and agility. This lack of small business involvement may reduce competitive pressure and potentially lead to less cost-effective or innovative outcomes over the long term.
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
Solicitation ID: SP470118R0015
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $30,763,191
Exercised Options: $30,763,191
Current Obligation: $30,763,191
Subaward Activity
Number of Subawards: 47
Total Subaward Amount: $28,040,708
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-08-01
Current End Date: 2022-07-31
Potential End Date: 2022-07-31 00:00:00
Last Modified: 2022-10-26
More Contracts from International Business Machines Corporation
- Navy Enterprise Resource Planning (ERP) Technical Support Services (netss) — $837.8M (Department of Defense)
- This Requirement IS for the Creation, Maintenance, Enforcement, Analysis and Updates of the Standards and Governance Established by the Current DTC and Provide Technical and Operational Support to the DTC for Saas, Paas, and Emerging Technologies — $621.7M (Department of Veterans Affairs)
- Eadis Software Development — $580.5M (Department of Homeland Security)
- THE Government Intends to Establish a Single-Award Delivery Order Base Plus Four 1year Option Periods for the Renewal of IBM Software Maintenance and the Purchase of More Additional IBM Software Licenses Against the General Services Administrations Federal Supply Schedule Program. Previous Order SS00-15-30081 — $525.4M (Social Security Administration)
- Uscis Transformation Program Solutions Architect (SA) — $376.3M (Department of Homeland Security)
View all International Business Machines Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)