IBM awarded $31.9M contract for ZCLOUD Phase I MOTS and Transition Discovery Services by Railroad Retirement Board

Contract Overview

Contract Amount: $31,924,804 ($31.9M)

Contractor: International Business Machines Corporation

Awarding Agency: Railroad Retirement Board

Start Date: 2020-12-01

End Date: 2025-11-30

Contract Duration: 1,825 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ZCLOUD PHASE I MOTS AND TRANSITION DISCOVERY SERVICES

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60611

State: Illinois Government Spending

Plain-Language Summary

Railroad Retirement Board obligated $31.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: ZCLOUD PHASE I MOTS AND TRANSITION DISCOVERY SERVICES Key points: 1. Contract value represents a significant investment in IT modernization for the Railroad Retirement Board. 2. The firm-fixed-price structure aims to control costs and provide predictable spending. 3. A long performance period of 1825 days suggests a complex, multi-year project. 4. The contract is for Computer Systems Design Services, indicating a focus on software and system development. 5. The absence of small business set-aside suggests the primary contractor is likely a large entity.

Value Assessment

Rating: fair

The contract value of $31.9 million for a 5-year period for IT modernization services appears within a reasonable range for large-scale system design and implementation. Benchmarking against similar government contracts for complex IT systems development and integration would be necessary for a more precise value assessment. The firm-fixed-price nature provides cost certainty for the agency, but the overall value for money depends heavily on the successful delivery of the ZCLOUD Phase I services and the long-term benefits realized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally expected to yield better pricing and service offerings for the government. The number of bidders is not specified, but the full and open nature suggests a robust selection process.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it promotes a competitive environment that can drive down costs and encourage innovation, leading to more efficient use of public funds.

Public Impact

The Railroad Retirement Board benefits from modernized IT systems, potentially improving operational efficiency and service delivery to beneficiaries. Services delivered include discovery and transition planning for the ZCLOUD platform, crucial for future cloud migration. The geographic impact is primarily within Illinois, where the Railroad Retirement Board is headquartered. Workforce implications may include the need for specialized IT skills within the agency or reliance on contractor expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope expands beyond initial discovery and transition.
Dependency on contractor expertise could create knowledge gaps within the agency.
Risk of vendor lock-in if ZCLOUD platform integration is highly specialized.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Full and open competition suggests a well-vetted selection process.
Long performance period allows for thorough planning and execution of complex IT tasks.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services industry. The market for government IT modernization and cloud migration services is substantial, with agencies increasingly seeking to update legacy systems. Comparable spending benchmarks would involve looking at other large-scale IT system design and implementation contracts awarded by federal agencies, particularly those involving cloud transition planning.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. This suggests that the primary focus was on securing the best solution through full and open competition, likely favoring larger, established IT service providers. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Railroad Retirement Board. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is generally maintained through contract award databases and reporting requirements, though specific project oversight details are not provided.

Related Government Programs

Federal IT Modernization Programs
Cloud Computing Initiatives
Computer Systems Design Services Contracts

Risk Flags

Potential for scope creep
Contractor dependency
Long performance period risks

Frequently Asked Questions

What is this federal contract paying for?

Railroad Retirement Board awarded $31.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. ZCLOUD PHASE I MOTS AND TRANSITION DISCOVERY SERVICES

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Railroad Retirement Board (Railroad Retirement Board).

What is the total obligated amount?

The obligated amount is $31.9 million.

What is the period of performance?

Start: 2020-12-01. End: 2025-11-30.

What is the track record of International Business Machines Corporation (IBM) in delivering similar IT modernization and cloud transition services to federal agencies?

IBM has a long and extensive track record of providing IT services, including modernization and cloud solutions, to numerous federal agencies. They have been involved in large-scale system integrations, software development, and infrastructure management for decades. Specific to cloud transitions, IBM offers a range of hybrid cloud and multi-cloud solutions, often leveraging their expertise in enterprise systems and data management. While their general capability is well-established, the success of this specific contract will depend on IBM's tailored approach to the Railroad Retirement Board's unique requirements and the effective execution of the ZCLOUD Phase I MOTS and Transition Discovery Services.

How does the awarded amount of $31.9 million compare to similar IT modernization contracts for agencies of the Railroad Retirement Board's size?

Comparing the $31.9 million contract value requires context regarding the scope and duration. For a 5-year contract focused on discovery and transition for a cloud initiative, this amount is not inherently excessive, especially for a large, established IT provider like IBM. However, without knowing the specific deliverables, the complexity of the existing systems, and the number of bidders, a definitive value comparison is difficult. Agencies of similar size might award contracts ranging from a few million to tens of millions for specialized IT services. The firm-fixed-price nature provides a degree of cost control, but the ultimate value will be realized through the successful modernization outcomes.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks include potential scope creep beyond the initial discovery and transition phases, leading to cost overruns despite the fixed-price structure. There's also a risk of vendor lock-in if the ZCLOUD platform becomes highly proprietary and difficult to transition away from. Furthermore, the success hinges on the contractor's ability to accurately assess the current IT environment and plan a viable transition. Mitigation strategies likely involve robust project management, clear definition of milestones and deliverables, regular progress reviews, and potentially phased funding tied to performance. The Railroad Retirement Board's contracting officers will be responsible for monitoring these risks throughout the contract's lifecycle.

How effective is the firm-fixed-price (FFP) contract type in ensuring program effectiveness for IT modernization projects like this?

The firm-fixed-price contract type is generally effective in controlling costs and providing budget certainty for the government, as the contractor assumes most of the risk for cost overruns. For IT modernization, this can incentivize efficiency and timely delivery. However, FFP contracts can sometimes stifle innovation or lead to contractors cutting corners on quality if not carefully managed. For a discovery and transition phase, FFP is suitable for defining the scope and initial planning. The effectiveness of the overall program will depend on how well the initial discovery phase informs subsequent phases and whether the defined scope accurately reflects the agency's needs and the complexity of the modernization effort.

What are the historical spending patterns of the Railroad Retirement Board on IT services, and how does this contract fit within that trend?

Detailed historical spending data for the Railroad Retirement Board on IT services is not readily available in this context. However, like most federal agencies, the RRB has likely been investing in IT to maintain and upgrade its systems to ensure efficient operations and service delivery. This $31.9 million contract for ZCLOUD Phase I represents a significant, multi-year investment specifically aimed at cloud modernization, suggesting a strategic shift or acceleration in their IT strategy. It indicates a move towards more modern, potentially cloud-based infrastructure, which is a common trend across government.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 60RRBH21R0003

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: $31,924,804

Exercised Options: $31,924,804

Current Obligation: $31,924,804

Actual Outlays: $26,037,167

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $4,697,478

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0014

IDV Type: GWAC

Timeline