IRS Awards $5.5M IBM Contract for Virtual Enterprise and Automated Tape Library Expansion
Contract Overview
Contract Amount: $5,517,136 ($5.5M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of the Treasury
Start Date: 2025-12-09
End Date: 2026-12-08
Contract Duration: 364 days
Daily Burn Rate: $15.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VIRTUAL ENTERPRISE (VES) AND AUTOMATED TAPE LIBRARY (ATL) EXPANSION AWARD. PERIOD OF PERFORMANCE 12/09/2025-12/08/2026.
Place of Performance
Location: MEMPHIS, SHELBY County, TENNESSEE, 38118
Plain-Language Summary
Department of the Treasury obligated $5.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: VIRTUAL ENTERPRISE (VES) AND AUTOMATED TAPE LIBRARY (ATL) EXPANSION AWARD. PERIOD OF PERFORMANCE 12/09/2025-12/08/2026. Key points: 1. The contract focuses on IT infrastructure expansion for the IRS. 2. IBM is the sole awardee, indicating a specific capability or existing relationship. 3. The award is a delivery order under a larger contract, suggesting phased implementation. 4. The fixed-price contract type aims to control costs for the government.
Value Assessment
Rating: good
The contract value of $5.5M for a one-year period appears reasonable for IT infrastructure expansion services. Benchmarking against similar large-scale IT service contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives best value.
Taxpayer Impact: The competitive award process is expected to yield a fair price, minimizing unnecessary taxpayer expenditure for these critical IT services.
Public Impact
Ensures continued operation and potential enhancement of IRS data storage and management systems. Supports the IRS's ability to process and secure taxpayer information. Potential for improved efficiency in data retrieval and system performance. Impacts taxpayers through the reliable functioning of tax administration systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential vendor lock-in if this expansion is tied to proprietary IBM solutions.
- Dependence on a single vendor for critical IT infrastructure.
Positive Signals
- Awarded under full and open competition.
- Firm fixed-price contract type helps manage costs.
- Clear period of performance.
Sector Analysis
This contract falls within the Other Computer Related Services sector, a broad category encompassing IT support and infrastructure. Spending in this area is substantial across government agencies, driven by the need for modern and secure IT systems.
Small Business Impact
The awardee is IBM Corporation, a large business. There is no indication that small businesses were involved in this specific delivery order, which is common for large-scale IT infrastructure contracts.
Oversight & Accountability
As a delivery order under a larger contract, oversight likely falls under the existing contract management framework. The IRS should ensure performance metrics are met and costs remain within the awarded amount.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Potential for vendor lock-in.
- Dependence on a single large vendor.
- Scope creep risk if expansion requirements are not clearly defined.
- Cybersecurity risks associated with data storage systems.
Tags
other-computer-related-services, department-of-the-treasury, tn, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $5.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. VIRTUAL ENTERPRISE (VES) AND AUTOMATED TAPE LIBRARY (ATL) EXPANSION AWARD. PERIOD OF PERFORMANCE 12/09/2025-12/08/2026.
Who is the contractor on this award?
The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $5.5 million.
What is the period of performance?
Start: 2025-12-09. End: 2026-12-08.
What is the specific nature of the 'Virtual Enterprise' and 'Automated Tape Library' expansion, and how does it align with the IRS's long-term IT strategy?
The expansion likely involves increasing capacity or upgrading existing virtual enterprise and automated tape library systems. This could include adding more storage, enhancing data redundancy, or improving access speeds. Alignment with IRS strategy would depend on whether these systems support modernization efforts, cloud migration, or enhanced data security initiatives.
What are the key performance indicators (KPIs) for this contract, and how will IBM's performance be measured to ensure value for money?
Key performance indicators would typically include system uptime, data retrieval speed, storage capacity utilization, and adherence to security protocols. Performance will be measured through regular reporting, system monitoring, and potentially user feedback. The IRS contracting officer's representative will oversee these metrics to ensure IBM meets the contract's requirements and delivers the expected value.
Given the full and open competition, were there any significant technical or cost proposals that were notably higher or lower than the awarded contract, and what does this suggest about the pricing?
While specific proposal details are not public, the fact that it was awarded under full and open competition suggests a competitive landscape. If IBM's bid was significantly lower than others, it might indicate aggressive pricing or confidence in their ability to deliver efficiently. Conversely, if it was the highest compliant bid, it suggests the IRS prioritized specific technical capabilities or IBM's established expertise.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - COMPUTE
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: TWO STEP
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: $5,517,136
Exercised Options: $5,517,136
Current Obligation: $5,517,136
Actual Outlays: $5,517,136
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 2032H523D00007
IDV Type: IDC
Timeline
Start Date: 2025-12-09
Current End Date: 2026-12-08
Potential End Date: 2026-12-08 07:27:51
Last Modified: 2025-12-19
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