IBM awarded $7.2M for cloud infrastructure services by DHS, with a 6-year performance period

Contract Overview

Contract Amount: $7,241,998 ($7.2M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2020-09-29

End Date: 2026-04-28

Contract Duration: 2,037 days

Daily Burn Rate: $3.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ACE DISASTER RECOVERY (DR) INFRASTRUCTURE-AS-A-SERVICE (IAAS) - BASE YEAR

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27709

State: North Carolina Government Spending

Plain-Language Summary

Department of Homeland Security obligated $7.2 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: ACE DISASTER RECOVERY (DR) INFRASTRUCTURE-AS-A-SERVICE (IAAS) - BASE YEAR Key points: 1. Value for money appears fair given the long-term nature of the contract and the critical infrastructure services provided. 2. Competition dynamics indicate a full and open competition, suggesting a potentially competitive pricing environment. 3. Risk indicators are moderate, with a long performance period and firm-fixed-price contract type. 4. Performance context shows this contract supports essential disaster recovery and infrastructure-as-a-service needs for CBP. 5. Sector positioning places this within the broader IT services market, specifically cloud computing and data center support.

Value Assessment

Rating: fair

The contract value of $7.2 million over approximately six years for Infrastructure-as-a-Service (IaaS) suggests an average annual cost of around $1.2 million. Benchmarking this against similar large-scale cloud service contracts is challenging without more granular details on service levels, storage, compute, and network capacity. However, for a government agency like CBP requiring robust disaster recovery capabilities, this price point may be within a reasonable range, especially considering the long-term commitment and the specialized nature of secure government cloud solutions. The firm-fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the nature of the competition suggests that multiple companies likely vied for this requirement. A full and open competition generally fosters a more competitive environment, which can lead to better pricing and service offerings for the government as contractors strive to win the award.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best possible value through competitive pressure, potentially driving down costs and improving service quality.

Public Impact

U.S. Customs and Border Protection (CBP) benefits directly through enhanced disaster recovery and reliable cloud infrastructure. Essential IT services supporting critical national security and border management operations are delivered. The geographic impact is primarily within the digital infrastructure supporting CBP operations nationwide. Workforce implications are indirect, focusing on the IT personnel managing and utilizing these cloud services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 6 years) could lead to vendor lock-in or missed opportunities for more cost-effective solutions if technology evolves rapidly.
Reliance on a single vendor for critical disaster recovery infrastructure poses a potential single point of failure risk.
Firm-fixed-price contracts can sometimes lead to less flexibility in adapting to changing requirements without costly change orders.

Positive Signals

The firm-fixed-price contract provides budget certainty for the government over the contract's life.
Full and open competition suggests a robust selection process, likely yielding a competitive price.
The contract supports critical disaster recovery functions, ensuring operational continuity for a vital agency.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on cloud computing and Infrastructure-as-a-Service (IaaS). The market for government cloud services is substantial and growing, driven by agencies seeking to modernize infrastructure, improve scalability, and enhance disaster recovery capabilities. Comparable spending benchmarks would involve analyzing other large IaaS contracts awarded to major cloud providers by federal agencies, considering factors like service level agreements (SLAs), security requirements, and the specific mix of compute, storage, and networking resources.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program for this particular award. However, the prime contractor, IBM, may engage small businesses as subcontractors for various components or services, depending on their own subcontracting plans and the nature of the work performed.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Customs and Border Protection (CBP) contracting officers and program managers within the Department of Homeland Security (DHS). They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. Transparency is facilitated through contract databases like FPDS. While specific Inspector General (IG) jurisdiction for this particular delivery order isn't detailed, the DHS Office of Inspector General typically has broad authority to investigate waste, fraud, and abuse within the department's contracts.

Related Government Programs

DHS Cloud Computing Services
Federal Data Center Consolidation Initiative
Infrastructure-as-a-Service (IaaS) Contracts
Disaster Recovery and Business Continuity Services

Risk Flags

Long-term contract duration may not align with rapid technological advancements in cloud computing.
Potential for vendor lock-in due to the critical nature of disaster recovery services.
Lack of specific performance metrics (SLAs) in summary data makes value assessment challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $7.2 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. ACE DISASTER RECOVERY (DR) INFRASTRUCTURE-AS-A-SERVICE (IAAS) - BASE YEAR

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 $7.2 million.

What is the period of performance?

Start: 2020-09-29. End: 2026-04-28.

What is the specific breakdown of services provided under this Infrastructure-as-a-Service (IaaS) contract?

The provided data indicates the contract is for 'ACE DISASTER RECOVERY (DR) INFRASTRUCTURE-AS-A-SERVICE (IAAS)'. While specific service details like compute instances, storage capacity, network bandwidth, and associated service level agreements (SLAs) are not explicitly listed in the abbreviated data, the description points to core IaaS functionalities. This typically includes virtualized computing resources, storage solutions, and networking capabilities necessary for running applications and supporting disaster recovery operations. The contract likely covers the provision and management of these foundational cloud resources, enabling CBP to maintain critical operations even in the event of disruptions to their primary IT infrastructure.

How does the $7.2 million contract value compare to similar IaaS contracts awarded by the federal government?

Comparing the $7.2 million contract value for approximately 6.7 years (from Sept 2020 to April 2026) requires context on the scale and scope of services. This averages to roughly $1.07 million per year. Federal IaaS contracts can vary dramatically in price based on the volume of resources, performance tiers, security accreditations (e.g., FedRAMP authorization levels), and included managed services. Large agencies like the Department of Defense or GSA often award multi-year IaaS contracts in the tens or hundreds of millions of dollars. For a specific function like disaster recovery for CBP, this value might represent a focused, yet significant, investment. Without knowing the exact resource allocation (e.g., number of virtual machines, petabytes of storage, network throughput), a precise benchmark is difficult, but it appears to be a substantial commitment for specialized DR capabilities.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The abbreviated data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for an Infrastructure-as-a-Service (IaaS) contract, particularly one focused on Disaster Recovery (DR) for U.S. Customs and Border Protection (CBP), critical SLAs would likely include metrics related to uptime/availability (e.g., 99.9% or higher), recovery time objectives (RTOs) – the maximum acceptable delay before a process must be restored – and recovery point objectives (RPOs) – the maximum acceptable amount of data loss measured in time. Performance metrics for network latency, data transfer speeds, and response times for support requests would also be crucial. These SLAs are vital for ensuring the effectiveness of the disaster recovery solution.

What is IBM's track record with providing IaaS and disaster recovery services to the federal government?

IBM has a long-standing history of providing IT services, including cloud computing and infrastructure solutions, to the federal government. They offer a range of cloud platforms, including hybrid cloud solutions, which are often tailored to meet the stringent security and compliance requirements of government agencies. IBM's experience encompasses managing large-scale data centers and providing mission-critical services. For disaster recovery, IBM leverages its expertise in resilient infrastructure design and operational continuity planning. Their track record includes numerous contracts with various federal agencies, demonstrating capability in delivering complex IT solutions. However, specific performance details and customer satisfaction metrics for individual contracts would require deeper investigation beyond the basic award data.

What are the potential risks associated with a firm-fixed-price contract for IaaS over a long duration?

A firm-fixed-price (FFP) contract for Infrastructure-as-a-Service (IaaS) over a long duration, like this 6.7-year contract, presents several potential risks. For the government, the primary risk is that technology evolves rapidly in the IaaS space. An FFP contract locks in pricing, which might become uncompetitive if market rates decrease significantly due to technological advancements or increased competition. If the government's needs change substantially, modifications to an FFP contract can be complex and costly. For the contractor (IBM), the risk lies in underestimating future operational costs, resource demands, or the impact of inflation over the contract period, potentially leading to reduced profit margins. Additionally, if the scope of services is not precisely defined, disputes over what is included can arise.

How does this contract contribute to the Department of Homeland Security's overall IT modernization and resilience goals?

This contract directly supports the Department of Homeland Security's (DHS) IT modernization and resilience goals by providing a robust Infrastructure-as-a-Service (IaaS) solution specifically for disaster recovery (DR). Modernizing IT infrastructure often involves migrating from legacy on-premises systems to more flexible and scalable cloud environments. By leveraging IaaS for DR, CBP ensures that critical systems and data can be recovered quickly and efficiently in the event of an outage or disaster, thereby enhancing operational resilience. This aligns with broader government initiatives like the Federal Data Center Consolidation Initiative and the push towards cloud-first strategies, aiming to improve efficiency, security, and the ability to respond to national security threats and emergencies.

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: $7,243,927

Exercised Options: $7,241,998

Current Obligation: $7,241,998

Actual Outlays: $3,890,648

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200030W

IDV Type: GWAC

Timeline