IBM awarded $21.5M for DoD's Background Investigation Enterprise Systems modernization and cloud migration

Contract Overview

Contract Amount: $21,469,108 ($21.5M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2024-12-09

End Date: 2027-06-08

Contract Duration: 911 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: THIS TASK ORDER IS FOR THE BACKGROUND INVESTIGATION ENTERPRISE SYSTEMS (BIES) MODERNIZATION AND MIGRATION TO CLOUD. SEE THE PERFORMANCE WORK STATEMENT LOCATED AT SECTION J, ATTACHMENT 0001.

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $21.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: THIS TASK ORDER IS FOR THE BACKGROUND INVESTIGATION ENTERPRISE SYSTEMS (BIES) MODERNIZATION AND MIGRATION TO CLOUD. SEE THE PERFORMANCE WORK STATEMENT LOCATED AT SECTION J, ATTACHMENT 0001. Key points: 1. The contract focuses on modernizing and migrating critical IT systems to the cloud, indicating a strategic shift towards enhanced data security and accessibility. 2. IBM's selection suggests a reliance on established large-scale IT service providers for complex government modernization projects. 3. The duration of the contract (over 2.5 years) implies a significant undertaking requiring sustained effort and expertise. 4. The 'Other Computer Related Services' NAICS code points to a broad scope of work, potentially encompassing software development, cloud integration, and system maintenance. 5. The contract's value, while substantial, needs to be benchmarked against similar large-scale IT modernization efforts to fully assess value for money.

Value Assessment

Rating: fair

The contract value of $21.5 million for a period of over 2.5 years for IT modernization and cloud migration appears to be within a reasonable range for a project of this scale and complexity, especially given the involvement of a large contractor like IBM. However, without specific details on the scope of work, deliverables, and performance metrics, a definitive assessment of value for money is challenging. Benchmarking against similar government cloud migration or system modernization projects would provide a clearer picture of pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This competitive process is intended to drive down costs and ensure the government receives the best value. The number of bidders and the specific evaluation criteria would provide further insight into the effectiveness of the competition in achieving these goals.

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

Public Impact

The Department of Defense (DoD) will benefit from modernized and cloud-based systems for background investigations, potentially improving efficiency and security. The services delivered will include system modernization, migration to cloud infrastructure, and ongoing IT support. The primary geographic impact is likely within the Department of Defense's operational footprint, with potential implications for personnel security across various branches. Workforce implications may include the need for specialized IT skills within the DoD to manage and integrate the new systems, as well as potential impacts on existing IT support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in complex IT modernization projects.
Risk of vendor lock-in with cloud migration services.
Challenges in ensuring seamless data migration and system integration.
Dependence on a single large contractor for critical infrastructure.

Positive Signals

Award to a large, established contractor like IBM suggests a high likelihood of technical capability and project management experience.
Full and open competition indicates a structured procurement process aimed at achieving best value.
Modernization to cloud infrastructure can enhance scalability, security, and disaster recovery capabilities.
Clear performance work statement (PWS) is crucial for defining expectations and measuring success.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT services, system modernization, and cloud computing. The market for government IT modernization is substantial, driven by the need to update legacy systems, enhance cybersecurity, and leverage cloud technologies for efficiency and scalability. Comparable spending benchmarks would involve analyzing other large-scale IT infrastructure and cloud migration contracts awarded by federal agencies, particularly within the defense sector.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to IBM, it is unlikely that small businesses will be directly involved as prime contractors. However, there may be opportunities for small businesses to participate as subcontractors to IBM, depending on IBM's subcontracting plan and the specific needs of the project. The absence of a small business set-aside means that the primary contract award did not prioritize small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices, given the agency (Department of the Army). The performance work statement (PWS) and contract clauses will define specific oversight mechanisms, including reporting requirements, inspections, and acceptance criteria. Transparency will be facilitated through contract award notices and potentially through public reporting on contract performance, though detailed operational oversight is typically internal to the agency.

Related Government Programs

DoD Cloud Computing Strategy
Defense Information Systems Agency (DISA) IT Modernization Programs
Federal Risk and Authorization Management Program (FedRAMP)
Background Investigation Services Contracts

Risk Flags

Potential for scope creep in complex IT modernization projects.
Cybersecurity risks associated with cloud migration of sensitive data.
Dependency on contractor performance for critical national security functions.
Challenges in ensuring interoperability with other defense systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. THIS TASK ORDER IS FOR THE BACKGROUND INVESTIGATION ENTERPRISE SYSTEMS (BIES) MODERNIZATION AND MIGRATION TO CLOUD. SEE THE PERFORMANCE WORK STATEMENT LOCATED AT SECTION J, ATTACHMENT 0001.

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 $21.5 million.

What is the period of performance?

Start: 2024-12-09. End: 2027-06-08.

What is the historical spending pattern for background investigation systems modernization within the Department of Defense?

Analyzing historical spending on background investigation systems modernization within the DoD is crucial for contextualizing the current $21.5 million award. This involves examining past contracts for similar modernization efforts, including system upgrades, data migration, and cloud adoption initiatives. Trends in spending can reveal whether this award represents an increase or decrease in investment in this area, and whether previous projects experienced cost overruns or delays. Understanding the lifecycle costs of legacy systems versus the projected costs of modernized, cloud-based solutions is also key. Without specific historical data, it's difficult to definitively state the pattern, but large-scale IT modernization projects often involve multi-year, multi-million dollar investments, and this contract appears to align with such a profile.

How does the per-unit cost or scope of this contract compare to similar IT modernization projects within the federal government?

Benchmarking the per-unit cost or scope of this $21.5 million contract against similar federal IT modernization projects is essential for assessing value for money. This comparison would ideally involve projects of comparable scale, complexity, and duration, particularly those involving cloud migration and enterprise system upgrades. Factors to consider include the number of users supported, the volume of data managed, and the specific technologies being implemented. For instance, if similar projects for modernizing large-scale enterprise resource planning (ERP) systems or migrating critical infrastructure to the cloud have cost significantly more or less for a comparable scope, it would provide valuable context. Without access to detailed cost breakdowns and specific project scopes for comparable contracts, a precise per-unit cost comparison is challenging, but the overall contract value suggests a significant undertaking.

What is IBM's track record with large-scale federal IT modernization and cloud migration contracts?

IBM has a long and extensive track record of executing large-scale IT modernization and cloud migration contracts for various federal agencies. They are a major player in the enterprise IT services market, with significant experience in areas such as cloud infrastructure, software development, cybersecurity, and system integration. Past performance on similar contracts, such as those involving complex system overhauls, data center consolidations, and transitions to cloud environments (e.g., AWS, Azure, or hybrid cloud solutions), would be relevant. Evaluating IBM's performance on these prior engagements, including their ability to meet deadlines, stay within budget, and deliver on technical requirements, provides insight into their capability to successfully execute this DoD contract. Agencies often review a contractor's past performance as a key factor in award decisions for complex projects.

What are the primary risks associated with migrating the Background Investigation Enterprise Systems (BIES) to the cloud, and how are they being mitigated?

The primary risks associated with migrating the BIES to the cloud include data security and privacy concerns, potential for system downtime during transition, integration challenges with existing DoD systems, and the risk of vendor lock-in. Ensuring the confidentiality and integrity of sensitive background investigation data is paramount. Mitigation strategies typically involve robust cybersecurity measures, adherence to stringent government cloud security standards (like FedRAMP), phased migration approaches to minimize disruption, comprehensive testing and validation of integrated systems, and carefully negotiated contract terms that address data ownership and portability. The performance work statement (PWS) and associated security requirements documentation would detail the specific mitigation plans and controls implemented for this contract.

How does the 'Other Computer Related Services' NAICS code (541519) scope align with the stated goal of BIES modernization and cloud migration?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that appropriately encompasses the stated goals of the Background Investigation Enterprise Systems (BIES) modernization and cloud migration. This code covers services such as computer systems integration design consulting, computer facilities management, computer disaster recovery services, and computer systems software consulting. Modernizing and migrating complex enterprise systems to the cloud inherently involves a wide array of computer-related services, including system analysis, design, development, implementation, and ongoing management. Therefore, this NAICS code provides the necessary flexibility to cover the diverse technical activities required for such a significant IT transformation project, ensuring that IBM can provide the full spectrum of services needed.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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: $69,554,668

Exercised Options: $53,308,359

Current Obligation: $21,469,108

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18DA032

IDV Type: IDC

Timeline