FCC Awards $21M for Data Center Support to IBM, Highlighting IT Services Demand
Contract Overview
Contract Amount: $21,028,364 ($21.0M)
Contractor: International Business Machines Corporation
Awarding Agency: Federal Communications Commission
Start Date: 2019-09-30
End Date: 2022-09-29
Contract Duration: 1,095 days
Daily Burn Rate: $19.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: DATA CENTER MAINTENANCE AND OPERATIONS SUPPORT
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817
State: Maryland Government Spending
Plain-Language Summary
Federal Communications Commission obligated $21.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: DATA CENTER MAINTENANCE AND OPERATIONS SUPPORT Key points: 1. Significant contract value ($21M) for essential IT infrastructure. 2. IBM, a major player, secured this contract, indicating strong incumbent performance or market dominance. 3. Risk of vendor lock-in and potential for cost overruns if not managed closely. 4. Spending falls within the IT services sector, specifically computer systems design.
Value Assessment
Rating: good
The $21M award for data center maintenance and operations support appears reasonable given the contract duration of three years. Benchmarking against similar large-scale IT infrastructure contracts is necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing by allowing all eligible vendors to bid.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces, ensuring the government receives value for its investment.
Public Impact
Ensures continuity of critical FCC data center operations. Supports essential government functions reliant on robust IT infrastructure. IBM's involvement suggests a focus on established, reliable service providers for sensitive operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost creep in long-term IT maintenance contracts.
- Reliance on a single vendor for critical infrastructure.
Positive Signals
- Awarded through full and open competition.
- Contract supports essential government IT functions.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design and related services. Spending benchmarks for similar data center maintenance contracts vary widely based on scale and complexity, but $21M over three years for a federal agency is substantial.
Small Business Impact
The data indicates this contract was not awarded to small businesses. While IBM is a large corporation, opportunities for small businesses in subcontracting roles or through future, smaller-scale IT support contracts should be explored.
Oversight & Accountability
The Federal Communications Commission (FCC) is responsible for overseeing this contract. Standard oversight mechanisms for IT service contracts, including performance reviews and financial audits, should be in place to ensure accountability.
Related Government Programs
- Computer Systems Design Services
- Federal Communications Commission Contracting
- Federal Communications Commission Programs
Risk Flags
- Potential for cost overruns
- Vendor lock-in
- Reliance on a single provider for critical infrastructure
- Lack of small business participation
Tags
computer-systems-design-services, federal-communications-commission, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Federal Communications Commission awarded $21.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. DATA CENTER MAINTENANCE AND OPERATIONS SUPPORT
Who is the contractor on this award?
The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.
Which agency awarded this contract?
Awarding agency: Federal Communications Commission (Federal Communications Commission).
What is the total obligated amount?
The obligated amount is $21.0 million.
What is the period of performance?
Start: 2019-09-30. End: 2022-09-29.
What specific performance metrics are in place to ensure IBM delivers high-quality data center maintenance and operations support?
Performance metrics likely include uptime guarantees, response times for critical incidents, adherence to security protocols, and successful completion of scheduled maintenance tasks. The contract's Service Level Agreements (SLAs) would detail these, with penalties for non-compliance. Regular performance reviews by the FCC contracting officer are crucial.
How does the FCC mitigate the risk of vendor lock-in with IBM for this critical IT infrastructure?
Mitigation strategies may include clearly defined contract exit clauses, requirements for knowledge transfer and documentation, and periodic market research to identify alternative solutions. The FCC could also plan for future contract competitions well in advance to encourage new entrants and prevent over-reliance.
What is the estimated taxpayer impact if IBM's services exceed the contracted price or fail to meet performance standards?
If services exceed contracted price without justification, taxpayers bear the additional cost. If performance standards are not met, taxpayers could face indirect costs due to service disruptions, data integrity issues, or the expense of corrective actions and potential re-competition. Contractual penalties aim to offset direct financial losses.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
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: $21,028,364
Exercised Options: $21,028,364
Current Obligation: $21,028,364
Actual Outlays: $21,029,098
Subaward Activity
Number of Subawards: 9
Total Subaward Amount: $4,214,425
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCK18D0014
IDV Type: GWAC
Timeline
Start Date: 2019-09-30
Current End Date: 2022-09-29
Potential End Date: 2022-09-29 00:00:00
Last Modified: 2025-05-02
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