VA awards $79.4M IBM contract for logical follow-on task order, extending computing infrastructure services

Contract Overview

Contract Amount: $79,418,886 ($79.4M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-30

End Date: 2023-09-29

Contract Duration: 729 days

Daily Burn Rate: $108.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: LOGICAL FOLLOW-ON TASK ORDER FOR ADDITIONAL PRESUMPTIVE .

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $79.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: LOGICAL FOLLOW-ON TASK ORDER FOR ADDITIONAL PRESUMPTIVE . Key points: 1. The contract is a logical follow-on, suggesting continuity and potentially limited new competition. 2. IBM is a major player in IT services, indicating significant market presence. 3. The contract's value is substantial, requiring careful oversight for taxpayer value. 4. The sector is IT services, a critical area for government operations.

Value Assessment

Rating: good

The contract value of $79.4M over two years appears reasonable for comprehensive IT infrastructure services provided by a major vendor like IBM. Benchmarking against similar large-scale managed services 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, which is positive for price discovery. However, as a 'logical follow-on task order,' the competitive landscape might have been influenced by prior contract performance.

Taxpayer Impact: The substantial award necessitates efficient service delivery to ensure taxpayer funds are used effectively for critical IT infrastructure.

Public Impact

Ensures continued operation of essential IT infrastructure for the VA. Supports veterans' access to healthcare and benefits through reliable technology. Maintains critical data processing and hosting services for the department.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services sector. Spending in this area is consistently high across federal agencies due to the increasing reliance on digital services and data management.

Small Business Impact

The contract was awarded to IBM, a large business. There is no explicit mention of small business participation in this specific award, which could be an area for future consideration in subcontracting opportunities.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. Given the contract's value and critical nature, regular performance reviews and audits are essential to ensure accountability and value for money.

Related Government Programs

Risk Flags

Tags

computing-infrastructure-providers-data-, department-of-veterans-affairs, md, delivery-order, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $79.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. LOGICAL FOLLOW-ON TASK ORDER FOR ADDITIONAL PRESUMPTIVE .

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $79.4 million.

What is the period of performance?

Start: 2021-09-30. End: 2023-09-29.

How does the pricing compare to industry benchmarks for similar managed IT infrastructure services?

A detailed comparison requires access to specific service level agreements and performance metrics. However, given IBM's market position and the scope of services, the pricing is likely competitive within the enterprise IT services market. Further analysis would involve benchmarking against contracts with similar scope, duration, and vendor capabilities.

What are the risks associated with a 'logical follow-on' task order in terms of competition and innovation?

Logical follow-on orders can sometimes limit new competitive entrants and may reduce pressure for innovation if the incumbent vendor is not actively incentivized. While this award was under full and open competition, the 'follow-on' aspect suggests a pre-existing relationship, potentially influencing the bidding environment and the introduction of novel solutions.

What is the expected impact on VA's operational effectiveness and efficiency from this contract?

This contract is expected to ensure the continued, reliable operation of critical IT infrastructure, directly supporting the VA's mission delivery. By securing these services through a follow-on order, the VA likely avoids disruption and maintains the technological backbone necessary for its operations, thereby enhancing overall effectiveness.

Industry Classification

NAICS: InformationComputing Infrastructure Providers, Data Processing, Web Hosting, and Related ServicesComputing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

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: $109,777,359

Exercised Options: $79,418,886

Current Obligation: $79,418,886

Actual Outlays: $79,149,142

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $6,614,865

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10E19D0018

IDV Type: IDC

Timeline

Start Date: 2021-09-30

Current End Date: 2023-09-29

Potential End Date: 2023-09-29 00:00:00

Last Modified: 2025-09-23

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