IBM awarded $31.1M contract for computer systems design services by the Department of the Army

Contract Overview

Contract Amount: $31,119,072 ($31.1M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2016-12-23

End Date: 2024-01-14

Contract Duration: 2,578 days

Daily Burn Rate: $12.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF HQAES AWARD

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF HQAES AWARD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2578 days indicates a long-term need for these services. 3. Firm Fixed Price contract type suggests predictable costs for the government. 4. The award was made by the Department of the Army, a major component of the Department of Defense. 5. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 6. No small business set-aside was indicated for this contract.

Value Assessment

Rating: fair

Benchmarking the value of this $31.1 million contract requires more detailed cost breakdowns and comparisons to similar computer systems design services contracts. Without specific performance metrics or a breakdown of labor categories and rates, it is difficult to definitively assess value for money. However, the firm fixed-price nature of the contract provides cost certainty for the government, which is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 4 bids (as indicated by 'no': 4) suggests a moderate level of competition for this specific award. While competition is present, the exact number of bidders can influence price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions.

Public Impact

The Department of the Army is the primary beneficiary, receiving computer systems design services. These services are crucial for maintaining and potentially upgrading the Army's IT infrastructure. The contract's impact is likely concentrated within the geographic areas where the Army operates and where IBM has a presence. The contract supports jobs within IBM and potentially its subcontractors in the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in given the long contract duration.
Complexity of systems design can lead to cost overruns if not managed effectively.
Reliance on a single large contractor for critical IT infrastructure.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Awarded through full and open competition, indicating a competitive process.
Long contract duration suggests a stable, ongoing requirement met by the contractor.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The market for IT services is vast and highly competitive, with numerous large and small firms offering specialized solutions. This contract represents a portion of the Department of Defense's significant spending on IT infrastructure and support, which is a critical area for national security and operational efficiency.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). Therefore, there are no direct subcontracting requirements mandated for small businesses through this specific award. The absence of a small business set-aside means larger prime contractors like IBM are not obligated to allocate a portion of the work to small businesses under this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract type, which penalizes cost overruns for the contractor. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly available.

Related Government Programs

Department of Defense IT Modernization Programs
Army Command and Control Systems Support
Information Technology Professional Services

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Firm Fixed Price contracts can sometimes disincentivize innovation if not structured carefully.
Reliance on a single large contractor for critical systems design.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF HQAES AWARD

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 Army).

What is the total obligated amount?

The obligated amount is $31.1 million.

What is the period of performance?

Start: 2016-12-23. End: 2024-01-14.

What is the historical spending pattern for computer systems design services by the Department of the Army?

The Department of the Army, as a major component of the Department of Defense, consistently allocates significant funds towards IT services, including computer systems design. Historical data reveals a sustained investment in this area, driven by the need to maintain, upgrade, and secure complex military information systems. Spending fluctuates based on modernization initiatives, cybersecurity threats, and evolving technological landscapes. For instance, periods of increased spending often correlate with the rollout of new command and control systems or the implementation of advanced data analytics capabilities. Analyzing past contract awards for similar NAICS codes (e.g., 541512) provides a benchmark for current spending levels and helps identify trends in contractor selection and contract values.

How does the awarded amount compare to similar contracts for computer systems design services?

Comparing the $31.1 million award to similar contracts requires access to a broader dataset of recent awards for NAICS code 541512 within the Department of Defense or other federal agencies. However, for a contract with a duration of over 2500 days, this value appears to be within a reasonable range for comprehensive systems design services. Larger, multi-year contracts for complex IT infrastructure projects can easily reach tens or hundreds of millions of dollars. Factors influencing the value include the scope of work, the level of customization required, the number of systems involved, and the specific expertise needed. Without more granular details on the project's complexity and the specific deliverables, a precise comparison is challenging, but the amount is not an outlier for long-term, large-scale IT design services.

What is IBM's track record with the Department of Defense for IT services?

International Business Machines Corporation (IBM) has a long-standing and extensive track record of providing a wide array of IT services to the Department of Defense (DoD) and its various branches, including the Department of the Army. Their engagements typically span areas such as cloud computing, cybersecurity, data analytics, systems integration, and legacy system modernization. IBM has secured numerous large-value contracts over the years, reflecting its established presence and capabilities within the federal IT landscape. While specific performance details for individual contracts are often proprietary, IBM's continued success in winning competitive bids from the DoD suggests a generally positive performance history and a strong understanding of military IT requirements.

What are the potential risks associated with this contract?

Potential risks associated with this contract include vendor lock-in, where the government becomes heavily reliant on IBM for critical systems design, potentially limiting future flexibility or negotiation power. Given the complexity of computer systems design, there's a risk of scope creep or unforeseen technical challenges that could lead to schedule delays or cost increases, despite the firm fixed-price structure. Furthermore, a significant portion of IT infrastructure being managed by a single entity could pose a concentrated cybersecurity risk if not rigorously protected. Ensuring effective knowledge transfer and maintaining competitive options for future phases or related services are key risk mitigation strategies.

What are the performance expectations and metrics for this contract?

Specific performance expectations and metrics for this contract are not detailed in the provided data. However, for computer systems design services, typical performance indicators would include adherence to project timelines, successful integration of designed systems, compliance with technical specifications and security standards, and the overall functionality and reliability of the delivered designs. The firm fixed-price nature of the contract implies that IBM is responsible for delivering the agreed-upon scope within the set budget. Performance would likely be monitored through regular progress reports, technical reviews, and acceptance testing of design deliverables by the Army's project managers.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

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: $31,119,072

Exercised Options: $31,119,072

Current Obligation: $31,119,072

Actual Outlays: $155,459

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $1,347,130

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline