DoD's $93.3M IBM Contract for Engineering Services: A 2004 Award with 2010 Expiration
Contract Overview
Contract Amount: $72,497,359 ($72.5M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Defense
Start Date: 2004-11-01
End Date: 2010-04-30
Contract Duration: 2,006 days
Daily Burn Rate: $36.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: 200506!000673!5700!FA8601!88CONS/PK !GS23F7107H !C!N! !Y!FA860105F0004! !20041101!20061031!933093676!933093676!001368083!N!INTERNATIONAL BUSINESS MACHINE!6710 ROCKLEDGE DRIVE !BETHESDA !MD!20817!86660!057!39!WRIGHT PATTERSON AFB!GREENE !OHIO !+000013966270!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !* !541614!E! !6! ! ! ! ! !20200930!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !000! ! ! ! ! ! ! ! ! !0001! !
Place of Performance
Location: DAYTON, GREENE County, OHIO, 45433
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $72.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: 200506!000673!5700!FA8601!88CONS/PK !GS23F7107H !C!N! !Y!FA860105F0004! !20041101!20061031!933093676!933093676!001368083!N!INTERNATIONAL BUSINESS MACHINE!6710 ROCKLEDGE DRIVE !BETHESDA !MD!20817!86660!057!39!WRIGHT PATTERSON AFB!GREE… Key points: 1. The contract awarded to IBM for engineering technical services represents a significant investment by the Department of Defense. 2. Competition was full and open, suggesting a potentially competitive bidding process that could lead to favorable pricing. 3. The contract's duration spans over five years, indicating a long-term need for these specialized services. 4. The sector is primarily IT and professional services, aligning with modern defense needs for technical expertise.
Value Assessment
Rating: good
The contract value of $93.3 million over its period of performance appears reasonable for comprehensive engineering and technical services provided by a major contractor like IBM.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can drive competitive pricing.
Taxpayer Impact: The competitive nature of the award suggests that taxpayers likely received fair market value for the engineering services procured.
Public Impact
This contract supports critical engineering and technical functions for the Department of the Air Force, potentially impacting military readiness and technological advancement. The use of a large, established contractor like IBM indicates a reliance on specialized expertise that may not be readily available elsewhere. The significant dollar amount highlights the importance and scale of the services being rendered to national defense objectives.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in long-term Time and Materials contracts.
- Dependence on a single large vendor for critical services.
Positive Signals
- Awarded through full and open competition.
- Contractor is a well-established industry leader.
- Services are essential for defense operations.
Sector Analysis
The contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting services. Spending in this area is crucial for government agencies requiring specialized expertise to manage complex operations and projects.
Small Business Impact
While this contract was awarded to a large corporation (IBM), the use of full and open competition theoretically allows small businesses to participate as subcontractors if they possess the required capabilities.
Oversight & Accountability
The Department of Defense, through the Air Force, is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms would be in place to ensure performance and accountability.
Related Government Programs
- Administrative Management and General Management Consulting Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Long-term contract duration increases exposure to changing requirements.
- Time and Materials pricing can lead to cost overruns if not managed strictly.
- Reliance on a single large contractor may limit flexibility and innovation.
- Potential for scope creep without clear task definitions.
Tags
administrative-management-and-general-ma, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $72.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. 200506!000673!5700!FA8601!88CONS/PK !GS23F7107H !C!N! !Y!FA860105F0004! !20041101!20061031!933093676!933093676!001368083!N!INTERNATIONAL BUSINESS MACHINE!6710 ROCKLEDGE DRIVE !BETHESDA !MD!20817!86660!057!39!WRIGHT PATTERSON AFB!GREENE !OHIO !+000013966270!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !* !541614!E! !6! ! ! ! ! !202
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 Air Force).
What is the total obligated amount?
The obligated amount is $72.5 million.
What is the period of performance?
Start: 2004-11-01. End: 2010-04-30.
What specific engineering technical services were provided under this contract, and how did they directly contribute to the Air Force's mission objectives?
The contract focused on 'ENGINEERING TECHNICAL SERVICES' (NAICS 541611). While the data doesn't detail specific tasks, these services typically encompass areas like systems engineering, technical support, program management, and research and development support. These are crucial for maintaining and advancing Air Force capabilities, from aircraft systems to communication networks, directly supporting operational readiness and technological superiority.
Given the Time and Materials pricing structure, what mechanisms were in place to control costs and prevent potential overruns throughout the contract's duration?
Time and Materials (T&M) contracts, while flexible, carry inherent risks of cost escalation. Effective oversight would involve rigorous monitoring of labor hours, rates, and material costs. The government likely employed contract officers and technical representatives to scrutinize invoices, ensure work was necessary and efficient, and negotiate rates. Setting ceilings on labor hours or total cost could also have been implemented to mitigate risk.
How does the performance of IBM on this contract compare to industry benchmarks for similar engineering and technical services, and what was the overall effectiveness?
Assessing effectiveness without performance reviews is challenging. However, IBM's long-standing presence and repeated contract awards suggest a generally satisfactory performance history. Benchmarking would involve comparing IBM's service delivery, technical solutions, and cost-efficiency against competitors and industry standards. The government's decision to award this significant contract implies a perceived effectiveness in meeting their engineering and technical support needs.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
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: $275,582
Exercised Options: $275,582
Current Obligation: $72,497,359
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS23F7107H
IDV Type: FSS
Timeline
Start Date: 2004-11-01
Current End Date: 2010-04-30
Potential End Date: 2010-04-30 00:00:00
Last Modified: 2021-12-07
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