USAID awards $122M contract to IBM for computer and software stores, spanning over 11 years

Contract Overview

Contract Amount: $122,019,860 ($122.0M)

Contractor: International Business Machines Corporation

Awarding Agency: Agency for International Development

Start Date: 2013-01-07

End Date: 2024-03-26

Contract Duration: 4,096 days

Daily Burn Rate: $29.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Agency for International Development obligated $122.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::CL::IGF Key points: 1. IBM secured a significant contract valued at over $122 million. 2. The contract was awarded under full and open competition. 3. Potential risks include long-term vendor lock-in and evolving technology needs. 4. The IT sector sees substantial government spending on software and hardware.

Value Assessment

Rating: good

The contract's pricing is assessed against similar IT hardware and software procurements. While specific unit costs are not detailed, the overall value suggests a competitive negotiation given the long duration and IBM's market position.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, allowing multiple vendors to bid. This method generally promotes price discovery and competitive pricing, ensuring the government receives value for its investment.

Taxpayer Impact: The competitive nature of the award suggests taxpayers are likely benefiting from market-driven pricing, although the long duration could introduce cost escalations if not managed.

Public Impact

Ensures access to essential computer and software resources for USAID operations. Supports a major technology provider, potentially impacting the broader IT market. Long contract duration raises questions about adaptability to future technological advancements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (11 years)
Sole vendor for specific software/hardware needs
Potential for price increases over time

Positive Signals

Full and open competition
Firm fixed price contract
Established vendor with proven track record

Sector Analysis

This contract falls within the Information Technology sector, specifically for computer and software stores. Government spending in this area is consistently high, driven by the need for up-to-date technology across various agencies.

Small Business Impact

While the primary awardee is IBM, a large corporation, the contract may indirectly benefit small businesses through subcontracting opportunities. However, the data does not explicitly detail any small business participation.

Oversight & Accountability

The contract's long duration necessitates robust oversight to ensure continued value and alignment with agency needs. Regular performance reviews and potential renegotiations will be crucial for accountability.

Related Government Programs

Computer and Software Stores
Agency for International Development Contracting
Agency for International Development Programs

Risk Flags

Long-term dependency on a single vendor
Risk of technology obsolescence
Potential for price increases if not strictly managed
Limited flexibility for adopting newer technologies mid-contract

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $122.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::CL::IGF

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $122.0 million.

What is the period of performance?

Start: 2013-01-07. End: 2024-03-26.

How does the firm fixed price structure mitigate risks associated with potential cost overruns over the 11-year period?

The firm fixed price (FFP) contract shifts the risk of cost overruns to the contractor, IBM. This means IBM is obligated to deliver the specified goods and services at the agreed-upon price, regardless of their actual costs. While this protects the agency from unexpected price hikes, it requires careful initial pricing by IBM to account for potential market fluctuations and operational challenges over the contract's extensive lifespan.

What mechanisms are in place to ensure the technology procured remains relevant and effective throughout the contract's 11-year duration?

Given the rapid pace of technological change, the contract likely includes provisions for periodic reviews, potential technology refresh cycles, or performance-based metrics that allow for adjustments. The agency's program management team would be responsible for monitoring technological advancements and engaging with IBM to ensure the procured solutions continue to meet evolving operational requirements and security standards.

How does the $122 million award compare to typical spending on similar IT infrastructure and software over an 11-year period for an agency of USAID's size?

Without specific benchmarks for USAID's IT needs, a direct comparison is challenging. However, $122 million over 11 years averages roughly $11 million annually. This figure appears reasonable for a large federal agency's IT procurement, especially considering it covers computer hardware, software licenses, and potentially related support services, reflecting the ongoing investment required to maintain robust technological capabilities.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

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: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

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

Financial Breakdown

Contract Ceiling: $127,737,088

Exercised Options: $127,737,088

Current Obligation: $122,019,860

Actual Outlays: $19

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $22,724,422

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4984H

IDV Type: FSS

Timeline