GSA awards $5.38M contract to IBM for LSAM/FPDS operations, extending system support through April 2026

Contract Overview

Contract Amount: $5,377,713 ($5.4M)

Contractor: International Business Machines Corporation

Awarding Agency: General Services Administration

Start Date: 2025-10-22

End Date: 2026-04-21

Contract Duration: 181 days

Daily Burn Rate: $29.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: LEGACY SYSTEM FOR AWARD MANAGEMENT (LSAM) & FEDERAL PROCUREMENT DATA SYSTEM (FPDS) OPERATIONS & MAINTENANCE LOGICAL FOLLOW-ON

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $5.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: LEGACY SYSTEM FOR AWARD MANAGEMENT (LSAM) & FEDERAL PROCUREMENT DATA SYSTEM (FPDS) OPERATIONS & MAINTENANCE LOGICAL FOLLOW-ON Key points: 1. Contract value represents a modest investment for critical federal procurement data system maintenance. 2. IBM's incumbency likely influenced this award, suggesting a focus on continuity. 3. The time-and-materials pricing model introduces potential cost variability. 4. Performance is benchmarked against similar IT operations and maintenance contracts. 5. This contract supports core federal financial management and transparency functions. 6. The General Services Administration (GSA) manages this vital IT infrastructure.

Value Assessment

Rating: good

The contract value of approximately $5.38 million over 18 months for IT operations and maintenance appears reasonable when considering the critical nature of the LSAM and FPDS systems. Benchmarking against similar contracts for large-scale federal IT system O&M suggests that this pricing is within expected ranges. The time-and-materials (T&M) contract type, while offering flexibility, warrants close monitoring to ensure costs remain controlled and do not exceed initial estimates. Without specific details on labor rates and hours, a precise value-for-money assessment is challenging, but the overall scale suggests a fair price for essential system upkeep.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was initiated. This approach is designed to foster price discovery and ensure the government receives the best possible value by considering a wide range of qualified offerors. The selection of IBM implies they offered the most advantageous proposal based on the evaluation criteria set forth in the solicitation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging innovation among potential contractors, leading to more efficient service delivery.

Public Impact

Federal agencies benefit from the continued availability and functionality of the LSAM and FPDS systems for procurement and financial management. The contract ensures the operational integrity of systems used to track billions of dollars in federal spending. Users across government will have access to reliable data for decision-making and reporting. The contract supports IT professionals employed by IBM, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The time-and-materials pricing structure could lead to cost overruns if not closely managed.
Reliance on a single vendor for critical system operations may pose long-term risks.
The scope of work may evolve, potentially requiring contract modifications and additional funding.
Ensuring adequate performance metrics and service level agreements are met is crucial.

Positive Signals

Award to IBM leverages existing knowledge of the LSAM and FPDS systems, promoting continuity.
Full and open competition suggests a robust process for selecting the best value.
The contract duration provides stability for essential system operations.
GSA's oversight is expected to ensure effective performance and accountability.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on operations and maintenance (O&M) for critical government IT infrastructure. The market for federal IT O&M is substantial, with agencies consistently investing in the upkeep of legacy and modern systems. Comparable spending benchmarks for similar O&M contracts often range from millions to tens of millions of dollars annually, depending on system complexity and user base. IBM is a major player in this market, competing with numerous other large and small IT service providers.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While IBM is a large business, the contract does not preclude subcontracting opportunities. However, without explicit small business goals or set-asides within this specific award, the direct impact on the small business ecosystem is likely minimal unless IBM voluntarily engages small businesses for subcontracting roles. Further analysis would be needed to determine if subcontracting plans include small business participation.

Oversight & Accountability

Oversight for this contract is managed by the General Services Administration (GSA), specifically its Federal Acquisition Service. GSA is responsible for ensuring contractor performance aligns with contract terms and conditions, including service level agreements and delivery schedules. Accountability measures are typically embedded within the contract through performance metrics, reporting requirements, and payment schedules tied to successful delivery. Transparency is facilitated through public contract databases like FPDS, which record award details, though specific performance data may be internal to GSA.

Related Government Programs

Legacy System for Award Management (LSAM)
Federal Procurement Data System (FPDS)
IT Operations and Maintenance Services
General Services Administration IT Contracts
Custom Computer Programming Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Reliance on incumbent contractor may limit future competitive opportunities.
System complexity and potential legacy issues could impact maintenance efficiency.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $5.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. LEGACY SYSTEM FOR AWARD MANAGEMENT (LSAM) & FEDERAL PROCUREMENT DATA SYSTEM (FPDS) OPERATIONS & MAINTENANCE LOGICAL FOLLOW-ON

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $5.4 million.

What is the period of performance?

Start: 2025-10-22. End: 2026-04-21.

What is the historical spending trend for LSAM and FPDS operations and maintenance?

Historical spending data for LSAM and FPDS operations and maintenance prior to this award would provide crucial context. Analyzing past contract values, durations, and awarded contractors can reveal trends in investment, potential cost escalation, or shifts in vendor relationships. For instance, if previous O&M contracts for these systems were significantly higher or lower, it could indicate changes in system complexity, scope of services, or market pricing. Understanding this historical trajectory helps in evaluating whether the current $5.38 million award represents a consistent, increased, or decreased level of investment for maintaining these critical federal procurement platforms. Without specific historical data, it is difficult to definitively assess if this award aligns with past spending patterns or represents a new financial direction for LSAM/FPDS upkeep.

How does IBM's performance on similar federal IT O&M contracts compare?

Evaluating IBM's track record on comparable federal IT Operations and Maintenance (O&M) contracts is essential for assessing performance risk and value. This involves examining past contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any documented instances of contract disputes, or significant deviations from schedule or budget on similar large-scale federal IT system support. A history of successful, on-time, and within-budget performance on complex systems suggests a lower risk profile for this new award. Conversely, a pattern of subpar performance, cost overruns, or missed deadlines on analogous contracts would raise concerns about IBM's ability to meet the requirements for LSAM and FPDS. Benchmarking against other major IT service providers' performance in the federal space also provides context for IBM's standing.

What are the key performance indicators (KPIs) for this contract, and how will they be measured?

The key performance indicators (KPIs) for this contract are critical for ensuring the effective operation and maintenance of the LSAM and FPDS systems. While not explicitly detailed in the provided data, typical KPIs for such contracts include system uptime percentages, response times for issue resolution, data integrity metrics, security compliance adherence, and successful deployment of system updates or patches. Measurement methods usually involve automated monitoring tools, regular reporting by the contractor (IBM), and periodic reviews by the GSA contracting officer's representative (COR). The contract likely specifies Service Level Agreements (SLAs) that define acceptable performance thresholds for these KPIs. Failure to meet these KPIs could result in contractual remedies, such as reduced payment or termination, underscoring their importance for accountability.

What is the potential impact of using a Time and Materials (T&M) contract type on overall cost?

The use of a Time and Materials (T&M) contract type for this $5.38 million award introduces a degree of cost uncertainty compared to fixed-price contracts. T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. While offering flexibility to adapt to evolving requirements, T&M contracts place a greater burden on the government to closely monitor labor hours and material costs to prevent scope creep and ensure efficiency. Without robust oversight and clearly defined task orders, there is a risk that costs could escalate beyond initial projections. The government must actively manage the effort expended by IBM to ensure that the work performed is necessary and that rates are competitive, thereby mitigating the inherent cost risks associated with T&M.

Are there any known risks associated with the LSAM and FPDS systems themselves that could impact contract performance?

The LSAM and FPDS systems, being critical components of federal procurement, may carry inherent risks that could impact contract performance. These risks can include the systems' age (legacy components), complexity, potential for undiscovered technical debt, cybersecurity vulnerabilities, or the challenge of integrating them with newer technologies. For example, if the underlying architecture is outdated, maintenance and updates could become increasingly difficult and costly, potentially leading to performance degradation or security gaps. Furthermore, the dependency on these systems means any disruption, however brief, can have significant repercussions across government operations. The contractor, IBM, must be equipped to manage these system-specific challenges effectively, and GSA's oversight must ensure that risk mitigation strategies are robust and proactively implemented.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QPCA26Q0004

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1 NEW ORCHARD RD, ARMONK, NY, 10504

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

Financial Breakdown

Contract Ceiling: $6,315,703

Exercised Options: $6,315,703

Current Obligation: $5,377,713

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F110DA

IDV Type: FSS

Timeline