DHS awards $54.3M for Mainframe as a Service (MFAAS) to IBM, impacting Customs and Border Protection

Contract Overview

Contract Amount: $54,318,793 ($54.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2018-09-30

End Date: 2023-08-18

Contract Duration: 1,783 days

Daily Burn Rate: $30.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MAINFRAME AS A SERVICE (MFAAS).

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27703

State: North Carolina Government Spending

Plain-Language Summary

Department of Homeland Security obligated $54.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MAINFRAME AS A SERVICE (MFAAS). Key points: 1. IBM secured a significant contract for MFAAS, highlighting their role in critical government IT infrastructure. 2. The contract's value of $54.3M suggests a substantial investment in maintaining legacy systems. 3. Lack of small business participation raises questions about broader economic impact. 4. The firm-fixed-price structure aims to control costs for these essential services.

Value Assessment

Rating: good

The $54.3M award for MFAAS appears reasonable given the specialized nature of mainframe services and the duration of the contract. Benchmarking against similar large-scale IT infrastructure contracts is challenging due to the unique requirements of mainframe environments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is intended to ensure fair pricing and access for qualified vendors, though IBM's dominance in mainframe services may limit the practical number of bidders.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for essential IT services, though the overall cost reflects the ongoing need for mainframe support.

Public Impact

Ensures continuity of critical U.S. Customs and Border Protection operations reliant on mainframe systems. Supports national security by maintaining essential data processing capabilities. IBM's role underscores the continued importance of legacy systems in government IT.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited small business participation.
Potential vendor lock-in due to specialized mainframe expertise.

Positive Signals

Full and open competition utilized.
Firm-fixed-price contract provides cost certainty.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, specifically focusing on mainframe infrastructure. Spending in this area is often driven by the need to maintain legacy systems that are critical to agency operations, representing a significant but often overlooked portion of government IT budgets.

Small Business Impact

The contract data indicates no small business participation (sb: false). This suggests that the specialized nature of mainframe services may favor large, established providers like IBM, potentially limiting opportunities for smaller businesses in this specific procurement.

Oversight & Accountability

The award was a delivery order under a larger contract, implying prior oversight and established terms. Further oversight would focus on performance metrics and adherence to the firm-fixed-price agreement to ensure value for money.

Related Government Programs

Computer Systems Design Services
Department of Homeland Security Contracting
U.S. Customs and Border Protection Programs

Risk Flags

Lack of small business participation.
Potential for vendor lock-in with specialized mainframe services.
Reliance on legacy technology may pose future modernization challenges.
Concentration of critical IT services with a single large vendor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $54.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MAINFRAME AS A SERVICE (MFAAS).

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $54.3 million.

What is the period of performance?

Start: 2018-09-30. End: 2023-08-18.

What is the long-term strategy for modernizing or migrating away from mainframe systems to reduce reliance on specialized vendors like IBM?

The long-term strategy for mainframe modernization or migration is crucial for reducing technical debt and operational costs. Agencies are increasingly exploring cloud-based solutions, containerization, and re-architecting applications. However, the complexity and criticality of mainframe systems often necessitate a phased approach, balancing modernization efforts with the ongoing need for stable, reliable legacy system support.

How does the cost of this 'Mainframe as a Service' offering compare to traditional on-premises mainframe management?

Comparing the cost of 'Mainframe as a Service' (MFAAS) to traditional on-premises management involves evaluating capital expenditures versus operational expenditures. MFAAS can offer predictable monthly costs and reduce the need for upfront hardware investments and in-house specialized staff. However, the total cost of ownership over the contract's life, including potential price escalations and the lack of direct control over infrastructure, needs careful assessment against the benefits of reduced IT overhead and increased flexibility.

What are the specific performance metrics and service level agreements (SLAs) in place to ensure the effectiveness of the MFAAS provided by IBM?

The effectiveness of the MFAAS is typically governed by detailed Service Level Agreements (SLAs) within the contract. These SLAs would outline key performance indicators (KPIs) such as system uptime, response times, data availability, and disaster recovery capabilities. Regular performance reviews and reporting mechanisms are essential to ensure IBM meets these contractual obligations and that the service effectively supports U.S. Customs and Border Protection's mission-critical operations.

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 DR, BETHESDA, MD, 20817

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

Financial Breakdown

Contract Ceiling: $67,562,082

Exercised Options: $54,318,793

Current Obligation: $54,318,793

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $94,129,193

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200030W

IDV Type: GWAC

Timeline