IBM awarded $59.3M for management consulting services, a transfer from another DoD office
Contract Overview
Contract Amount: $59,286,181 ($59.3M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Defense
Start Date: 2016-07-01
End Date: 2019-06-30
Contract Duration: 1,094 days
Daily Burn Rate: $54.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Other
Official Description: IGF::OT::IGF THIS ACTION AWARDS JOB ORDER 1 UNDER BOA HQ0727-16-G-0001. THIS JOB ORDER IS A TRANSFER FROM MPO IN THE MIDDLE OF POP 3.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $59.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::OT::IGF THIS ACTION AWARDS JOB ORDER 1 UNDER BOA HQ0727-16-G-0001. THIS JOB ORDER IS A TRANSFER FROM MPO IN THE MIDDLE OF POP 3. Key points: 1. The contract was awarded as a delivery order under an existing Broad Agency Announcement (BOA). 2. The services provided fall under 'Other Management Consulting Services'. 3. The contract duration is approximately three years. 4. This action represents a transfer of work mid-program, indicating potential shifts in strategic priorities or resource allocation within the Department of Defense. 5. The contract type is Time and Materials, which can carry cost risks if not managed closely. 6. The award was not competed, raising questions about the process for selecting the contractor.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without more specific details on the services rendered. However, the award of $59.3 million for management consulting over three years is a significant investment. The Time and Materials contract type, while flexible, can lead to higher costs if not carefully monitored for scope creep and labor hours. Comparing this to similar large-scale management consulting contracts within the DoD would be necessary for a more precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as a delivery order under an existing BOA (HQ0727-16-G-0001) and was not competed. The data indicates it was a transfer from another office within the Department of Defense (MPO). The lack of competition means that pricing and service terms were likely negotiated directly with IBM, potentially limiting the government's ability to secure the most favorable terms compared to a competitive bidding process.
Taxpayer Impact: The absence of competition means taxpayers may not have benefited from the cost savings that could arise from a bidding war among multiple qualified vendors. This could result in a higher overall cost for the services provided.
Public Impact
The primary beneficiary is the Department of Defense, specifically the Defense Microelectronics Activity, which receives management consulting services. The services delivered are categorized as 'Other Management Consulting Services', suggesting support for strategic planning, operational efficiency, or program management. The geographic impact is likely concentrated within the operational areas of the Department of Defense, with a specific mention of Virginia as the state. Workforce implications are not explicitly detailed but could involve the integration of IBM's consulting expertise with existing DoD personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition for a significant contract value.
- Time and Materials contract type can lead to cost overruns if not managed stringently.
- Award is a transfer mid-program, suggesting potential instability or re-prioritization of original objectives.
Positive Signals
- Awarded under an existing BOA, suggesting a pre-vetted framework for engagement.
- IBM is a large, established contractor with extensive experience in government services.
- The contract is for management consulting, which can provide valuable expertise to the agency.
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically management consulting. The federal government is a major consumer of these services, often engaging contractors for strategic advice, program management, and operational improvements. The Department of Defense, in particular, frequently utilizes management consulting to navigate complex technological and logistical challenges. Comparable spending benchmarks would typically involve analyzing other large-scale consulting contracts awarded to major IT and professional services firms within the defense sector.
Small Business Impact
The data indicates this contract was not competed and does not specify any small business set-aside provisions. Given the contractor is IBM, a large corporation, and the nature of the award (delivery order under a BOA), it is unlikely that small businesses were directly involved as prime contractors. Subcontracting opportunities for small businesses are not detailed but would depend on IBM's procurement practices for this specific engagement.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a delivery order under a BOA, the initial BOA likely had its own oversight mechanisms. The Time and Materials nature of the contract necessitates close monitoring of labor hours and costs to ensure accountability. Transparency is limited by the sole-source award; however, contract modifications and performance reports would be subject to internal DoD review and potentially Inspector General oversight if performance issues or irregularities arise.
Related Government Programs
- Department of Defense Management Consulting Services
- Broad Agency Announcements (BOA)
- Time and Materials Contracts
- Defense Microelectronics Activity Programs
Risk Flags
- Lack of Competition
- Time and Materials Contract Type
- Mid-Program Transfer
Tags
department-of-defense, management-consulting, time-and-materials, sole-source, delivery-order, broad-agency-announcement, defense-microelectronics-activity, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::OT::IGF THIS ACTION AWARDS JOB ORDER 1 UNDER BOA HQ0727-16-G-0001. THIS JOB ORDER IS A TRANSFER FROM MPO IN THE MIDDLE OF POP 3.
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 Microelectronics Activity).
What is the total obligated amount?
The obligated amount is $59.3 million.
What is the period of performance?
Start: 2016-07-01. End: 2019-06-30.
What specific management consulting services were provided under this contract?
The provided data categorizes the services as 'Other Management Consulting Services' (NAICS 541618) but does not detail the specific tasks performed. Typically, such services can encompass a wide range of activities including strategic planning, organizational analysis, process improvement, program management support, and policy development. Given the awarding agency is the Defense Microelectronics Activity, the consulting likely supported initiatives related to microelectronics research, development, acquisition, or sustainment within the Department of Defense. Further details would require access to the contract's statement of work or performance reports.
Why was this contract awarded to IBM on a sole-source basis?
The data indicates this was a delivery order under an existing BOA (HQ0727-16-G-0001) and was 'NOT COMPETED'. Often, delivery orders under BOAs are not competed if the BOA itself was established through a competitive process and allows for direct ordering for specific needs. However, the 'transfer from MPO in the middle of POP 3' suggests a potential re-allocation of existing work or a shift in requirements that may have led to a sole-source justification for this specific order. Without the specific justification document, the precise reason for not competing this delivery order remains unclear, but it could be due to urgency, unique capabilities, or continuation of services already underway.
What are the potential risks associated with a Time and Materials contract for management consulting?
Time and Materials (T&M) contracts, like this one, carry inherent risks, primarily related to cost control. Unlike fixed-price contracts, the government pays for the actual labor hours and materials used. This can lead to cost overruns if the scope of work is not clearly defined or if contractor performance is inefficient. For management consulting, there's a risk that the project could take longer than anticipated, or that more senior (and thus more expensive) personnel are assigned than strictly necessary, driving up costs. Effective oversight, detailed tracking of hours, and strong project management by the government are crucial to mitigate these risks and ensure value for money.
How does the transfer of this job order mid-program impact its effectiveness?
The transfer of this job order from MPO to the Defense Microelectronics Activity (DEMA) in the middle of 'POP 3' (Period of Performance 3) introduces several potential impacts. It could signify a change in strategic direction or a consolidation of efforts within the DoD. For effectiveness, continuity is key; a mid-program transfer might disrupt established workflows, team dynamics, or the understanding of project history and objectives. However, it could also be a move to centralize expertise or resources under DEMA if they are deemed better positioned to manage or benefit from the consulting services. The success will depend on how smoothly the transition is managed and whether the receiving organization can effectively integrate the ongoing work and leverage the consulting support.
What is the historical spending context for 'Other Management Consulting Services' within the Department of Defense?
The Department of Defense is one of the largest federal agencies and consistently spends billions of dollars annually on various professional services, including management consulting. Spending in this category (NAICS 541618) fluctuates based on strategic priorities, program needs, and budget allocations. Historically, the DoD utilizes management consultants for a wide array of functions, from supporting major acquisition programs and IT modernization efforts to improving organizational efficiency and developing strategic plans. The $59.3 million awarded to IBM represents a portion of this broader spending landscape, and its significance should be viewed relative to the overall DoD budget for consulting services.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
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: $62,709,060
Exercised Options: $62,709,060
Current Obligation: $59,286,181
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $12,228,322
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ072716G0001
IDV Type: BOA
Timeline
Start Date: 2016-07-01
Current End Date: 2019-06-30
Potential End Date: 2019-06-30 00:00:00
Last Modified: 2019-07-11
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