Treasury's IRS awards $26.4M IBM contract for IT services under full and open competition

Contract Overview

Contract Amount: $26,403,852 ($26.4M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of the Treasury

Start Date: 2004-04-14

End Date: 2006-05-31

Contract Duration: 777 days

Daily Burn Rate: $34.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 18

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IBM, TIPSS-2

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IBM, TIPSS-2 Key points: 1. Contract awarded to IBM for IT services. 2. Significant value of $26.4 million over two years. 3. Full and open competition was utilized. 4. Cost Plus Fixed Fee contract type. 5. Awarded by the Department of the Treasury, IRS.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. The fixed fee component provides some cost certainty, but the overall value needs to be benchmarked against similar IT service contracts for a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was employed, suggesting a robust process for selecting the contractor. This method generally promotes competitive pricing and ensures the government receives best value.

Taxpayer Impact: The use of full and open competition is positive for taxpayers, as it aims to secure competitive pricing and efficient service delivery.

Public Impact

Taxpayer funds allocated for essential IT services. Contract supports the Internal Revenue Service's operations. Potential for improved government IT infrastructure and services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize higher costs.
Contract duration of over two years requires ongoing monitoring.

Positive Signals

Full and open competition utilized.
Awarded to a major IT provider (IBM).

Sector Analysis

This contract falls within the Information Technology sector, specifically for IT services. Benchmarks for similar IT service contracts awarded by federal agencies can vary widely based on scope and complexity.

Small Business Impact

The data indicates the award went to a large corporation (IBM) and does not specify any set-asides for small businesses. Therefore, the direct impact on small businesses is likely minimal for this specific contract.

Oversight & Accountability

Oversight would be crucial for a Cost Plus Fixed Fee contract to ensure costs remain reasonable and the fixed fee is justified by performance. The Department of the Treasury and IRS are responsible for this oversight.

Related Government Programs

Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Contract duration of over two years.
Lack of specific service details.
No mention of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IBM, TIPSS-2

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 Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $26.4 million.

What is the period of performance?

Start: 2004-04-14. End: 2006-05-31.

What specific IT services were procured under this contract, and how do they align with the IRS's strategic IT goals?

The provided data does not specify the exact IT services. However, given the agency (IRS) and the contract type, it likely encompassed a range of IT support, maintenance, or development activities. Understanding the specific services is crucial to assess their alignment with the IRS's modernization efforts and overall mission objectives.

How was the 'fixed fee' component determined, and what metrics were used to ensure IBM delivered value commensurate with this fee?

The determination of the fixed fee typically involves negotiation based on estimated costs, project scope, and anticipated profit margins. Value assessment would rely on performance metrics and deliverables outlined in the contract. Without access to the contract details, it's difficult to ascertain the specific mechanisms for value assurance.

Were there any performance issues or cost overruns reported during the contract's lifecycle, and how were they addressed?

The provided data does not contain information on performance issues or cost overruns. A comprehensive review would require access to contract performance reports, payment histories, and any contract modification documentation. Such information is essential for a complete understanding of the contract's effectiveness and accountability.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 18

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,558,130

Exercised Options: $27,558,130

Current Obligation: $26,403,852

Parent Contract

Parent Award PIID: TIRNO00D00018

IDV Type: IDC

Timeline