IBM awarded $16.8M NOAA contract for critical data center support services through 2026

Contract Overview

Contract Amount: $16,816,674 ($16.8M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Commerce

Start Date: 2024-06-12

End Date: 2026-06-11

Contract Duration: 729 days

Daily Burn Rate: $23.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), NATIONAL WEATHER SERVICE (NWS), NATIONAL CENTERS FOR ENVIRONMENTAL PREDICTION (NCEP), CENTRAL OPERATIONS (NCO) REQUIRES DATA CENTER SUPPORT SERVICES TO (1) PROVIDE OPERATIONS AND MAINTENANCE

Place of Performance

Location: COLLEGE PARK, PRINCE GEORGES County, MARYLAND, 20740

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $16.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), NATIONAL WEATHER SERVICE (NWS), NATIONAL CENTERS FOR ENVIRONMENTAL PREDICTION (NCEP), CENTRAL OPERATIONS (NCO) REQUIRES DATA CENTER SUPPORT SERVICES TO (1) PROVIDE OPERATIONS AND MAINTENANCE Key points: 1. Contract ensures continuity of essential weather prediction operations. 2. IBM's long-standing relationship with government IT services suggests familiarity with requirements. 3. Fixed-price contract structure offers cost predictability for NOAA. 4. Competition was full and open, indicating potential for competitive pricing. 5. Service delivery is concentrated in Maryland, a key operational hub. 6. Contract duration of two years provides a stable support period.

Value Assessment

Rating: good

The contract value of $16.8 million over two years for data center support services appears reasonable given the critical nature of NOAA's National Weather Service operations. Benchmarking against similar government IT support contracts, this value falls within expected ranges for comprehensive operations and maintenance. The firm fixed-price structure helps mitigate cost overruns, providing a degree of value certainty for the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of five bids indicates a healthy level of interest and competition for this service. This competitive process is expected to drive pricing towards market rates and encourage efficient service delivery from the winning contractor.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for essential weather prediction infrastructure. The multiple bids suggest that NOAA received a range of pricing options, likely leading to a more cost-effective outcome than a sole-source award.

Public Impact

The primary beneficiaries are the National Oceanic and Atmospheric Administration (NOAA) and the National Weather Service (NWS), ensuring the uninterrupted operation of critical environmental prediction systems. Services delivered include operations and maintenance for data center support, vital for processing and disseminating weather and climate data. Geographic impact is concentrated in Maryland, where the National Centers for Environmental Prediction (NCEP) and Central Operations (NCO) are located. Workforce implications include the continued employment of IT professionals managing and maintaining these complex systems, likely through IBM's personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future requirements are highly specialized to IBM's solution.
Reliance on a single contractor for critical infrastructure could pose a risk if performance degrades.
Ensuring continued innovation and adaptation to evolving data center technologies within the fixed-price contract.

Positive Signals

IBM's established presence and experience in government IT services suggest a lower risk of execution issues.
The firm fixed-price contract provides budget certainty and incentivizes efficient performance.
Full and open competition indicates a robust selection process that likely yielded a qualified and competitive offer.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. The total federal spending on IT services is in the tens of billions annually. This specific contract supports critical infrastructure for environmental prediction, a niche but vital area within the broader government IT landscape. Comparable spending benchmarks for data center operations and maintenance vary widely based on scale and complexity, but this $16.8M award over two years is a moderate-sized contract for specialized support.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While IBM is a large business, the subcontracting opportunities for small businesses are not detailed in the provided data. The impact on the small business ecosystem will depend on IBM's subcontracting strategy, which is not specified here.

Oversight & Accountability

Oversight for this contract will primarily reside with the National Oceanic and Atmospheric Administration (NOAA) contracting officers and program managers. Accountability measures are embedded within the contract's performance work statement and delivery schedules. Transparency is facilitated through federal procurement databases like FPDS, where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

NOAA IT Infrastructure Modernization
NWS Weather and Climate Data Services
Federal Data Center Consolidation Initiative
Cloud Computing Services for Government Agencies
IT Operations and Maintenance Contracts

Risk Flags

Critical Infrastructure Reliance
Data Security and Integrity
Performance Continuity Risk
Potential for Vendor Lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $16.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), NATIONAL WEATHER SERVICE (NWS), NATIONAL CENTERS FOR ENVIRONMENTAL PREDICTION (NCEP), CENTRAL OPERATIONS (NCO) REQUIRES DATA CENTER SUPPORT SERVICES TO (1) PROVIDE OPERATIONS AND MAINTENANCE

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2024-06-12. End: 2026-06-11.

What is IBM's track record with NOAA and similar federal agencies for data center support?

IBM has a long history of providing IT services to the federal government, including extensive work with agencies like NOAA. Their track record typically involves large-scale infrastructure management, cloud services, and data processing solutions. For NOAA specifically, IBM has likely supported various IT initiatives over the years, given the agency's reliance on robust data handling capabilities for weather, climate, and oceanic research. While specific details of past NOAA contracts are not provided here, IBM's general experience suggests a capacity to manage complex data center operations. Their performance on similar contracts with agencies like the Department of Defense or NASA would offer further insight into their reliability and expertise in mission-critical environments.

How does the $16.8 million contract value compare to previous NOAA data center support contracts?

Without specific historical data on prior NOAA data center support contracts for the NCEP/NCO, a direct comparison is challenging. However, the $16.8 million award over two years (approximately $8.4 million annually) represents a significant but not extraordinary investment for maintaining critical national infrastructure. Federal IT spending fluctuates based on modernization needs, system upgrades, and contract renewals. If previous contracts were for similar scope and duration, this value suggests stable or potentially increased funding reflecting the ongoing importance of these services. If previous contracts were substantially lower or higher, it could indicate a change in service scope, market pricing shifts, or a strategic decision by NOAA to invest more or less in this area.

What are the primary risks associated with this contract for NOAA?

The primary risks for NOAA in this contract revolve around potential performance issues with IBM, vendor lock-in, and the security of critical data. If IBM fails to meet the operational and maintenance standards outlined in the contract, it could disrupt vital weather prediction services, impacting public safety and economic activities. Vendor lock-in is a risk because specialized knowledge and infrastructure configurations developed by IBM might make it difficult and costly for NOAA to switch providers in the future. Furthermore, the security of the sensitive environmental data processed and stored within these data centers is paramount; any breach or compromise due to inadequate security measures by the contractor would have severe consequences. Ensuring robust service level agreements and security protocols is crucial for mitigating these risks.

How effective is a firm fixed-price contract for ensuring the quality of data center support services?

A firm fixed-price (FFP) contract is generally effective for ensuring cost control and predictability, as the contractor assumes the risk of cost overruns. For data center support services, an FFP contract incentivizes the contractor, IBM in this case, to perform efficiently to maintain profitability. However, its effectiveness in ensuring *quality* depends heavily on the specificity and comprehensiveness of the performance work statement (PWS) and the associated performance metrics and incentives. If the PWS clearly defines required service levels, uptime, response times, and maintenance standards, and if NOAA has robust mechanisms to monitor and enforce these standards, the FFP contract can drive high-quality service. Conversely, if the PWS is vague or performance monitoring is weak, the contractor might focus on cost-cutting that could inadvertently compromise quality.

What is the historical spending trend for data center support services at NOAA's NWS/NCEP?

Historical spending trends for data center support services at NOAA's NWS/NCEP are not explicitly detailed in the provided data. However, it is reasonable to infer that spending in this area has been consistent and likely increasing over time, given the growing volume of climate and weather data, the need for advanced modeling, and the increasing reliance on digital infrastructure. Agencies like NOAA typically face pressure to modernize their IT systems while managing operational costs. Therefore, spending patterns would likely reflect a balance between maintaining legacy systems, adopting new technologies (like cloud or enhanced data analytics), and ensuring the reliability of core services. The current $16.8M award over two years suggests a sustained level of investment in these critical operational capabilities.

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 › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NW0000PR-23-00689

Offers Received: 5

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: $135,000,000

Exercised Options: $27,736,528

Current Obligation: $16,816,674

Actual Outlays: $13,497,832

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $2,390,462

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0014

IDV Type: GWAC

Timeline