IBM awarded $32.8M for High Performance Computing managed services by NOAA, spanning nearly three years

Contract Overview

Contract Amount: $32,775,136 ($32.8M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Commerce

Start Date: 2019-09-20

End Date: 2022-08-14

Contract Duration: 1,059 days

Daily Burn Rate: $30.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HIGH PERFORMANCE COMPUTING - MANAGED SERVICE

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $32.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: HIGH PERFORMANCE COMPUTING - MANAGED SERVICE Key points: 1. Contract value appears reasonable for complex HPC managed services over a multi-year period. 2. Full and open competition suggests a competitive pricing environment was likely achieved. 3. Performance period of over 1000 days indicates a need for sustained, reliable service delivery. 4. The contract falls within the IT services sector, specifically computer systems design. 5. Fixed-price contract type helps mitigate cost overrun risks for the government.

Value Assessment

Rating: good

The contract value of approximately $32.8 million over 1059 days (roughly 35 months) for High Performance Computing managed services is within a reasonable range for such specialized IT support. Benchmarking against similar large-scale HPC contracts is challenging due to the unique nature of managed services, but the price per day is approximately $30,949. This figure needs to be assessed against the specific scope of services, including hardware maintenance, software support, and operational management of complex computing infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This method typically fosters a competitive environment, encouraging multiple bidders to propose their best pricing and technical solutions. The number of bidders is not specified, but the use of this procurement method suggests that the agency sought to maximize competition to obtain the best value.

Taxpayer Impact: Full and open competition generally leads to more favorable pricing for taxpayers by ensuring a wide range of potential providers can compete, driving down costs through market forces.

Public Impact

The National Oceanic and Atmospheric Administration (NOAA) benefits from enhanced high-performance computing capabilities. Services delivered include the management and operation of critical computing infrastructure. Geographic impact is primarily national, supporting NOAA's scientific research and data processing needs. Workforce implications may include specialized IT personnel required for HPC operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition to a new provider is complex.
Dependence on a single contractor for critical HPC infrastructure could pose operational risks.
Ensuring continuous innovation and cost-efficiency over the contract term requires diligent oversight.

Positive Signals

Full and open competition suggests a robust market assessment and potential for competitive pricing.
Fixed-price contract type provides cost certainty for the government.
Long contract duration indicates a stable, ongoing need for these critical services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design and managed services for High Performance Computing (HPC). The HPC market is a specialized segment of the IT industry, crucial for scientific research, weather forecasting, climate modeling, and complex data analysis. Spending in this area is often significant due to the high cost of specialized hardware and the expertise required for operation and maintenance. Comparable spending benchmarks would typically be found within large government agencies with substantial computational needs, such as NASA, DOE, or DoD.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). IBM, the prime contractor, is a large business. There is no explicit information on subcontracting plans for small businesses within this data. Therefore, the direct impact on the small business ecosystem from this specific contract award is likely minimal, unless IBM actively engages small businesses for specialized support services not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by NOAA contracting officers and program managers within the Department of Commerce. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

High Performance Computing Modernization Program (HPCMP)
IT Managed Services Contracts
Cloud Computing Services
Scientific Computing Services
Department of Commerce IT Procurement

Risk Flags

Potential for cost overruns if scope creep occurs.
Dependence on a single vendor for critical infrastructure.
Ensuring adequate performance and service levels over the contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $32.8 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. HIGH PERFORMANCE COMPUTING - MANAGED SERVICE

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 $32.8 million.

What is the period of performance?

Start: 2019-09-20. End: 2022-08-14.

What is the track record of International Business Machines Corporation (IBM) in providing High Performance Computing managed services to federal agencies?

IBM has a long-standing and extensive track record in providing IT services, including managed services for High Performance Computing (HPC), to various federal agencies. They are a major vendor for supercomputing hardware and associated software and support. Historically, IBM has been involved in numerous large-scale government IT projects, often winning significant contracts for complex systems integration and managed services. Their experience spans across defense, intelligence, and scientific research sectors. While specific performance metrics for this NOAA contract are not detailed here, IBM's general reputation in the federal IT space is that of a capable, albeit sometimes costly, provider of advanced technological solutions. Agencies often rely on IBM for their expertise in managing intricate and mission-critical computing environments, though contract performance can vary based on specific project scope and management.

How does the awarded amount compare to other federal spending on similar HPC managed services?

Comparing the $32.8 million awarded to IBM for HPC managed services by NOAA is challenging without specific details on the scope and duration of comparable contracts. However, large-scale HPC managed services contracts for federal agencies can range from tens of millions to hundreds of millions of dollars over several years. For instance, contracts supporting national laboratories or large-scale weather modeling often involve substantial investments. The average daily cost for this contract is approximately $30,949. This figure needs to be benchmarked against the specific services provided, such as system uptime guarantees, level of technical support, software maintenance, and the complexity of the HPC environment managed. Given the critical nature of NOAA's work, which relies heavily on advanced computing for weather and climate research, this level of investment is not unusual for ensuring operational continuity and performance.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks associated with this HPC managed services contract include potential vendor lock-in, operational disruptions if service levels are not met, and the risk of cost escalation if the fixed-price model is not carefully managed against scope changes. Vendor lock-in is a concern because transitioning complex HPC environments can be difficult and expensive. Operational disruptions are mitigated through Service Level Agreements (SLAs) within the contract, performance monitoring, and potentially penalties for non-compliance. Cost escalation under a fixed-price contract is generally mitigated by clearly defined scope and change control processes. The government's oversight and the contractor's incentive to maintain a good performance record also serve as risk mitigation factors. The fixed-price nature itself is a key mitigation strategy against uncontrolled cost growth.

What is the expected program effectiveness or outcome based on this contract?

The expected outcome of this contract is the reliable and efficient operation of NOAA's High Performance Computing infrastructure, enabling critical scientific research, data analysis, and operational forecasting. Effective management of HPC resources is crucial for NOAA's mission, impacting areas such as weather prediction accuracy, climate change modeling, and oceanographic research. Success will be measured by system uptime, processing speeds, data throughput, and the ability to support complex scientific simulations. Improved HPC capabilities can lead to more accurate and timely dissemination of environmental information, benefiting public safety and economic activities. The contract aims to ensure that NOAA has the necessary computing power and support to conduct its vital scientific and operational functions without interruption.

How has federal spending on IT managed services, particularly for HPC, evolved over the past five years?

Federal spending on IT managed services, including those for High Performance Computing (HPC), has seen a steady increase over the past five years, driven by the growing demand for advanced data processing and analytics across various agencies. There's a notable trend towards consolidating IT infrastructure and outsourcing management to specialized providers like IBM, often through large, multi-year contracts. Agencies are increasingly leveraging HPC for complex tasks such as AI/ML, big data analytics, and scientific simulations. While specific figures for HPC managed services are often embedded within broader IT services categories, overall federal IT spending remains robust. Factors influencing this include modernization efforts, cybersecurity needs, and the push for cloud adoption, although dedicated on-premises HPC facilities still require significant managed service support. The government continues to seek efficiencies through competitive contracting and strategic partnerships.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,775,136

Exercised Options: $32,775,136

Current Obligation: $32,775,136

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $4,525,276

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DOCDG133012CQ0004

IDV Type: IDC

Timeline