Treasury's $24.8M IBM Contract for Computer Systems Design Services Awarded Competitively
Contract Overview
Contract Amount: $24,788,278 ($24.8M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of the Treasury
Start Date: 2009-09-09
End Date: 2012-10-26
Contract Duration: 1,143 days
Daily Burn Rate: $21.7K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: RECOMPETE TIPSS -3 RTCP # 2256
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $24.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: RECOMPETE TIPSS -3 RTCP # 2256 Key points: 1. Contract awarded to IBM for $24.8M for computer systems design. 2. Competition was present, indicated by 'COMPETITIVE DELIVERY ORDER'. 3. The contract duration was 1143 days. 4. The NAICS code 541512 points to a common IT service sector.
Value Assessment
Rating: fair
The contract's cost-plus-fixed-fee structure can lead to cost overruns if not managed tightly. Benchmarking against similar contracts for computer systems design services is difficult without more detailed scope information.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded as a competitive delivery order, suggesting multiple vendors had the opportunity to bid. This method generally promotes price discovery and competitive pricing.
Taxpayer Impact: The competitive nature of the award suggests taxpayers likely received a fair price, though the cost-plus-fixed-fee structure warrants ongoing scrutiny.
Public Impact
This contract supports the Internal Revenue Service's IT infrastructure. The services provided are crucial for the functioning of a major government agency. IBM's involvement highlights the role of large IT contractors in government operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts require diligent oversight to prevent cost creep.
- Lack of specific performance metrics makes it hard to assess value for money.
- Contract duration is relatively long, increasing risk of scope drift.
Positive Signals
- Awarded competitively, indicating potential for good pricing.
- Supports critical IRS functions.
- IBM is a well-established IT provider.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design. Spending in this area is substantial across federal agencies, supporting everything from infrastructure to specialized software development. Benchmarks vary widely based on service complexity and duration.
Small Business Impact
The contract was awarded to IBM, a large business. There is no indication that small businesses were involved as subcontractors or prime contractors in this specific award.
Oversight & Accountability
The competitive award process suggests some level of oversight. However, the cost-plus-fixed-fee nature necessitates robust monitoring by the Department of the Treasury to ensure efficient use of funds and prevent contractor overcharging.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Cost-plus-fixed-fee contract type can lead to cost overruns.
- Lack of detailed performance metrics.
- Long contract duration increases risk.
- Potential for contractor overcharging without strict oversight.
Tags
computer-systems-design-services, department-of-the-treasury, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $24.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. RECOMPETE TIPSS -3 RTCP # 2256
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 $24.8 million.
What is the period of performance?
Start: 2009-09-09. End: 2012-10-26.
What specific computer systems design services were rendered, and how did they align with the IRS's strategic IT goals?
The contract data indicates 'Computer Systems Design Services' under NAICS 541512. Without a detailed statement of work, it's impossible to ascertain the precise services. These likely involved the design, development, integration, or modification of computer systems to meet IRS operational needs, potentially related to tax processing, data management, or internal systems.
How effectively was the cost-plus-fixed-fee structure managed to control costs and ensure value for the $24.8 million expenditure?
The effectiveness of cost-plus-fixed-fee management hinges on stringent oversight, clear performance metrics, and proactive risk mitigation. While the contract was competitively awarded, the inherent nature of this pricing model requires continuous monitoring by the IRS to prevent scope creep and ensure that the fixed fee remains appropriate for the delivered value. Without post-award performance data, assessing cost control effectiveness is speculative.
What was the impact of IBM's incumbency or prior experience on the competitive bidding process and final pricing?
IBM's status as a large, established IT provider could have influenced the competitive landscape. While the award was competitive, incumbent advantage or perceived expertise might have played a role in bidders' strategies and the final pricing. The 'full-and-open' competition suggests other qualified vendors participated, but understanding the specific dynamics requires more insight into the bidding process and the number of proposals received.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
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: $34,551,440
Exercised Options: $32,885,745
Current Obligation: $24,788,278
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: TIRNO06D00019
IDV Type: IDC
Timeline
Start Date: 2009-09-09
Current End Date: 2012-10-26
Potential End Date: 2012-10-26 00:00:00
Last Modified: 2016-04-14
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 the Treasury Contracts
- Advertising Services — $636.5M (True North Communications Inc)
- Cade 2 Ltis3 Covid-19 — $383.8M (Deloitte Consulting LLP)
- Establish a Broad Networking and Telecommunications Service Environment to Meet ITS Network Services (wide Area and Local Area Network), Voice Telecommunications Services, Audio/Video/Web Conferencing, and Cyber Requirements — $320.2M (AT&T Enterprises, LLC)
- THE Internal Revenue Service (IRS), Office of Information Technology Office, Issues This Order Under GSA Alliant 2 (unrestricted). Enterprise Case Management (ECM) Solution Integration Services — $305.5M (Booz Allen Hamilton Inc)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Verizon Business Network Services LLC)