IBM's $27.6M contract for MLMS technical support shows strong competition and long-term engagement

Contract Overview

Contract Amount: $27,637,755 ($27.6M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2019-08-21

End Date: 2025-03-29

Contract Duration: 2,047 days

Daily Burn Rate: $13.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE MLMS CONTRACT WILL PROVIDE ONGOING TECHNICAL SUPPORT FOR THE LMS AS WELL AS COLLECT, MAINTAIN, AND EXCHANGE DATA RELATED TO THE TRAINING, TESTING, AND REGISTRATION. THE CONTRACTOR WILL NEED TO PROVIDE ADDITIONAL SUPPORTING SERVICES RELATED TO THE

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: THE MLMS CONTRACT WILL PROVIDE ONGOING TECHNICAL SUPPORT FOR THE LMS AS WELL AS COLLECT, MAINTAIN, AND EXCHANGE DATA RELATED TO THE TRAINING, TESTING, AND REGISTRATION. THE CONTRACTOR WILL NEED TO PROVIDE ADDITIONAL SUPPORTING SERVICES RELATED TO THE Key points: 1. Value for money appears reasonable given the extended duration and scope of technical support. 2. Full and open competition suggests a healthy market for these specialized IT services. 3. Risk indicators are moderate, with performance dependent on contractor's technical expertise. 4. The contract supports critical data management for training, testing, and registration. 5. Positioned within the custom computer programming services sector, this contract is vital for CMS operations.

Value Assessment

Rating: good

The contract's total value of $27.6 million over approximately 6.5 years suggests a significant investment in maintaining the MLMS. Benchmarking against similar custom computer programming services contracts for large-scale government systems indicates that this pricing is within a reasonable range, especially considering the ongoing technical support and data management requirements. 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 multiple vendors were likely invited to bid. The presence of three bidders suggests a competitive environment, which typically drives better pricing and service quality. The government's ability to select from multiple qualified sources is a positive sign for price discovery and value.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which helps ensure that the government is not overpaying for essential IT support services.

Public Impact

Beneficiaries include Centers for Medicare and Medicaid Services (CMS) staff who rely on the MLMS for operational efficiency. Services delivered include ongoing technical support, data collection, maintenance, and exchange related to training, testing, and registration. Geographic impact is national, supporting CMS operations across the United States. Workforce implications include the need for skilled IT professionals to maintain and support the MLMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to specialized knowledge required for MLMS.
Dependence on contractor's ability to maintain system security and data integrity.
Risk of scope creep if additional support services are not clearly defined.

Positive Signals

Full and open competition indicates a robust market and potential for innovation.
Firm fixed-price contract provides budget predictability.
Long-term engagement allows for deep system understanding and efficiency gains.

Sector Analysis

This contract falls within the Custom Computer Programming Services sector (NAICS 541511), a critical segment of the IT industry focused on developing and implementing tailored software solutions. The market for such services is substantial, driven by government and commercial entities requiring specialized IT support for complex systems. Comparable spending benchmarks for large-scale federal IT support contracts often range in the tens to hundreds of millions of dollars over several years, making this contract's value proportionate to its scope.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, International Business Machines Corporation. Further analysis would be needed to determine if IBM has plans for small business subcontracting as part of its performance obligations.

Oversight & Accountability

Oversight for this contract is likely managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring IBM to deliver specified services. Transparency is generally maintained through contract award databases, though detailed performance reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Healthcare IT Modernization Programs
Federal Civilian IT Support Services
Data Management Systems Contracts
Custom Software Development Contracts

Risk Flags

Long contract duration may increase risk of vendor lock-in.
Dependence on a single contractor for critical system support.
Potential for evolving technological requirements not fully captured in initial scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. THE MLMS CONTRACT WILL PROVIDE ONGOING TECHNICAL SUPPORT FOR THE LMS AS WELL AS COLLECT, MAINTAIN, AND EXCHANGE DATA RELATED TO THE TRAINING, TESTING, AND REGISTRATION. THE CONTRACTOR WILL NEED TO PROVIDE ADDITIONAL SUPPORTING SERVICES RELATED TO THE

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2019-08-21. End: 2025-03-29.

What is the track record of International Business Machines Corporation (IBM) in performing similar large-scale federal IT support contracts?

IBM has a long and extensive history of performing large-scale IT support and system development contracts for various federal agencies. They are a major federal contractor with significant experience in areas such as cloud computing, cybersecurity, data analytics, and custom software development. Their track record includes numerous multi-year, multi-million dollar awards across civilian and defense sectors. While specific performance metrics for past contracts are not detailed here, IBM's consistent presence as a prime contractor suggests a generally reliable performance history. However, as with any large contractor, specific contract performance can vary, and a deeper dive into past performance evaluations for similar CMS or HHS contracts would provide more granular insights.

How does the pricing of this contract compare to other custom computer programming services contracts awarded by the federal government?

The total contract value of $27.6 million over approximately 6.5 years, for custom computer programming services (NAICS 541511), places it in the mid-to-large range for federal IT support contracts. Without specific details on the scope of work and service level agreements, a precise benchmark is difficult. However, considering the duration and the need for ongoing technical support for a system like MLMS, the average annual cost is roughly $4.25 million. This figure appears competitive when compared to other large federal IT support contracts that often involve complex system maintenance, integration, and development, which can easily run into millions annually per contract. The firm fixed-price nature also provides cost control for the government.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks include potential over-reliance on IBM for specialized knowledge (vendor lock-in), ensuring data security and integrity of the MLMS, and managing potential scope creep. Mitigation strategies are likely embedded within the contract's performance work statement (PWS) and terms. The firm fixed-price structure incentivizes IBM to deliver within budget. Competition, even if limited to three bidders, provides some leverage. The government's contracting officer and technical team will monitor performance closely, conduct regular reviews, and enforce contract clauses related to security and deliverables. Clear definition of support services and change control processes are crucial for managing scope.

How effective is the MLMS system, and what is the impact of this contract on its effectiveness?

The effectiveness of the MLMS system itself is not directly detailed in the provided data. However, this contract is specifically for 'ongoing technical support' and 'collect, maintain, and exchange data related to the training, testing, and registration.' This implies the MLMS is a critical operational system for the Centers for Medicare and Medicaid Services (CMS). The contract's purpose is to ensure the continued functionality, reliability, and data integrity of the MLMS. Therefore, the contract's effectiveness directly impacts the MLMS's ability to support CMS's core functions related to training, testing, and registration processes, which are vital for program administration and compliance.

What are the historical spending patterns for MLMS technical support or similar systems at CMS?

The provided data only details this specific contract award (IDIQ Delivery Order) valued at $27.6 million from August 2019 to March 2025. It does not offer historical spending patterns for MLMS or comparable systems at CMS. To understand historical spending, one would need to access historical contract databases (like FPDS or USASpending) for previous contracts related to MLMS or similar data management and training support systems within CMS. Analyzing past awards, their values, durations, and contractors would reveal trends in investment and spending for these types of services over time.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $27,637,755

Exercised Options: $27,637,755

Current Obligation: $27,637,755

Actual Outlays: $18,714,852

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $848,105

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F110DA

IDV Type: FSS

Timeline