DoD's $98.7M IT services contract with IBM saw 7 bidders, indicating robust competition for wired telecommunications

Contract Overview

Contract Amount: $98,672,748 ($98.7M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Defense

Start Date: 2012-11-19

End Date: 2016-10-28

Contract Duration: 1,439 days

Daily Burn Rate: $68.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INFORMATION TECHNOLOGY SERVICES AND SUPPORT IGF::OT::IGF

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24143

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $98.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: INFORMATION TECHNOLOGY SERVICES AND SUPPORT IGF::OT::IGF Key points: 1. The contract achieved a competitive outcome with seven bidders, suggesting a healthy market for IT services. 2. IBM's performance under this contract warrants review against industry benchmarks for similar IT support. 3. The firm-fixed-price structure likely transferred some cost risk to the contractor. 4. This contract's duration of nearly four years provides a substantial performance period. 5. The spending aligns with the broader federal IT services sector, which is a significant area of government expenditure. 6. Analysis of the per-unit cost against market rates is crucial for assessing value for money.

Value Assessment

Rating: fair

Benchmarking this contract's value requires detailed analysis of the specific IT services rendered and their market rates during the contract period (2012-2016). Without specific service details, a direct comparison to similar contracts is challenging. However, the total value of nearly $99 million over approximately four years suggests a substantial investment in IT infrastructure or support. The firm-fixed-price nature indicates an expectation of predictable costs, but actual value depends on the efficiency and effectiveness of the services delivered by IBM.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with seven bidders participating. This level of competition is generally positive, suggesting that multiple vendors were interested and capable of providing the required services. A higher number of bidders typically leads to better price discovery and potentially lower costs for the government. The presence of seven bidders indicates a dynamic market for these telecommunications services.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

The Department of Defense, specifically the Department of the Army, benefited from enhanced IT services and support. This contract likely supported critical military operations and administrative functions through reliable telecommunications. The geographic impact is primarily within the areas served by the Department of the Army, potentially nationwide or at specific installations. The contract supported jobs within the IT services sector, including those employed by IBM and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to fully assess the quality and effectiveness of services rendered.
The contract value is substantial, necessitating diligent oversight to ensure continued cost-effectiveness.
Market rates for telecommunications services can fluctuate, potentially impacting the long-term value proposition if not managed proactively.

Positive Signals

Awarded under full and open competition, ensuring a broad base of potential providers.
The firm-fixed-price contract type shifts some financial risk to the contractor.
A significant number of bidders (7) suggests a competitive marketplace and potential for good pricing.
The contract duration provided stability for both the agency and the contractor.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on wired telecommunications carriers. The federal IT services market is vast, with agencies consistently investing in infrastructure, software, and support to maintain operational capabilities. Spending in this category is driven by the need for secure, reliable, and high-speed communication networks essential for defense operations. Comparable spending benchmarks would involve analyzing other large-scale telecommunications and IT support contracts awarded by the DoD and other federal agencies during the same period.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. However, given the large contract value and the nature of the services, it is possible that subcontracting opportunities for small businesses existed. Further investigation would be needed to determine if small business participation goals were set or met.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures would be tied to the contract's performance work statement and delivery schedules. Transparency is generally facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Wired Telecommunications Services
Information Technology Support Contracts
Federal Telecommunications Infrastructure

Risk Flags

Potential for technology obsolescence over contract duration.
Need for ongoing performance monitoring to ensure value.
Cybersecurity risks inherent in telecommunications infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. INFORMATION TECHNOLOGY SERVICES AND SUPPORT IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $98.7 million.

What is the period of performance?

Start: 2012-11-19. End: 2016-10-28.

What specific IT services were provided under this contract?

The provided data indicates the contract falls under the NAICS code 517110 (Wired Telecommunications Carriers), suggesting services related to the provision, maintenance, and operation of wired telecommunications infrastructure. This could encompass services such as dedicated internet access, private line services, voice over IP (VoIP) infrastructure, and other network connectivity solutions. Without the full contract details or statement of work, the precise nature of the services remains general. However, given the agency (Department of Defense) and the value, it likely supported critical communication needs for military operations or installations.

How does the per-unit cost of this contract compare to market rates for similar services during 2012-2016?

Determining the per-unit cost requires breaking down the total contract value ($98.7 million) by the specific units of service delivered over the contract's duration (approximately 1439 days). For example, if the contract was for a certain number of dedicated circuits, the per-circuit cost could be calculated. Comparing this to market rates from 2012-2016 would involve researching historical pricing data from telecommunications providers and industry reports for similar enterprise-level services. Given the firm-fixed-price structure, the government aimed to lock in costs, but the actual value depends on whether these locked-in costs were competitive at the time of award and remained so throughout the contract period.

What was IBM's track record with the Department of Defense prior to and during this contract?

IBM has a long history of contracting with the U.S. government, including the Department of Defense, across a wide range of IT services and solutions. Assessing their specific track record for this contract would involve reviewing past performance evaluations, any documented disputes or contract terminations, and the overall quality of service delivery reported by the Department of the Army. Generally, large IT providers like IBM have extensive experience, but performance can vary significantly by contract. A review of past performance databases and any publicly available CPARS (Contractor Performance Assessment Reporting System) data would provide more insight into IBM's specific performance on this and similar DoD contracts.

Were there any significant risks identified or managed during the execution of this contract?

Potential risks for a contract of this nature and value could include technological obsolescence, cybersecurity threats, vendor lock-in, cost overruns (though mitigated by FFP), and performance failures. The firm-fixed-price structure helps mitigate financial risks for the government. However, risks related to service availability, network security, and meeting evolving operational requirements would still need active management by the Department of the Army. The contract's duration also presents a risk of the technology becoming outdated if not managed proactively through contract modifications or future procurements.

How does this contract's spending compare to other federal IT services contracts awarded around the same time?

This contract, valued at approximately $98.7 million over roughly four years, represents a significant but not extraordinary investment within the federal IT services landscape. The federal government spends billions annually on IT. To compare, one would look at the total federal spending on NAICS code 517110 or broader IT services categories during FY2012-FY2016. This contract's size places it as a substantial award, likely supporting a major command or a critical set of functions within the DoD. It's important to compare it with contracts of similar scope, duration, and service type to gauge its relative scale and significance.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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 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: $98,672,748

Exercised Options: $98,672,748

Current Obligation: $98,672,748

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ06D0010

IDV Type: IDC

Timeline