DoD Awards IBM $75M for AI Research, Focusing on Neural Inference Machines and Soft IP Core Technology
Contract Overview
Contract Amount: $74,999,951 ($75.0M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Defense
Start Date: 2019-08-16
End Date: 2024-02-16
Contract Duration: 1,645 days
Daily Burn Rate: $45.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST NO FEE
Sector: R&D
Official Description: IBM NORTHPOLE NEURAL INFERENCE MACHINE: ARCHITECTURE, SOFT INTELLECTUAL PROPERTY (IP) CORE TECHNOLOGY, SOFTWARE ECOSYSTEM, PROTOTYPE CHIP&BOARD PHASE 2
Place of Performance
Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95120
Plain-Language Summary
Department of Defense obligated $75.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IBM NORTHPOLE NEURAL INFERENCE MACHINE: ARCHITECTURE, SOFT INTELLECTUAL PROPERTY (IP) CORE TECHNOLOGY, SOFTWARE ECOSYSTEM, PROTOTYPE CHIP&BOARD PHASE 2 Key points: 1. Significant investment in advanced AI hardware and software development. 2. Competition method was 'Full and Open', suggesting broad market engagement. 3. Risk associated with cutting-edge R&D and potential for technological obsolescence. 4. Sector focus is R&D, specifically in physical and engineering sciences.
Value Assessment
Rating: questionable
The contract value of $75M for R&D is substantial. Benchmarking is difficult due to the highly specialized nature of the technology, but the cost appears high for a prototype phase.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific nature of the technology may limit the number of truly capable bidders.
Taxpayer Impact: Taxpayer funds are supporting advanced technological development with potential long-term defense applications, but the immediate return on investment is uncertain.
Public Impact
Advancement of Artificial Intelligence capabilities for national security. Potential for dual-use technology with commercial applications. Investment in domestic technological innovation and high-skilled jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High R&D costs
- Technological obsolescence risk
- Long development cycle
Positive Signals
- Cutting-edge AI development
- Full and open competition
- Potential for strategic advantage
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on advanced computing and AI. Spending in this area is critical for maintaining technological superiority but is inherently high-risk.
Small Business Impact
The contract was awarded to IBM, a large corporation, and there is no indication of specific provisions for small business participation in this particular award.
Oversight & Accountability
The Department of the Air Force is the awarding agency, with oversight expected through standard contract management processes for R&D projects. Accountability will be tied to milestone achievement.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High cost for R&D
- Technological obsolescence
- Unproven prototype technology
- Long development timeline
Tags
research-and-development-in-the-physical, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IBM NORTHPOLE NEURAL INFERENCE MACHINE: ARCHITECTURE, SOFT INTELLECTUAL PROPERTY (IP) CORE TECHNOLOGY, SOFTWARE ECOSYSTEM, PROTOTYPE CHIP&BOARD PHASE 2
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 $75.0 million.
What is the period of performance?
Start: 2019-08-16. End: 2024-02-16.
What is the projected timeline for achieving key technological milestones and demonstrating the effectiveness of the North Pole Neural Inference Machine?
The contract duration is 1645 days, ending in February 2024, suggesting a multi-year development cycle. Specific milestone demonstrations would be detailed in the contract's statement of work. Effectiveness will likely be assessed through rigorous testing and validation against defined performance metrics relevant to AI inference tasks.
How will the Department of Defense mitigate the risk of the developed intellectual property becoming obsolete given the rapid pace of AI advancement?
Mitigation strategies likely involve modular design principles, continuous market scanning for emerging technologies, and building adaptability into the architecture. The contract may also include provisions for future upgrades or technology refreshes to ensure long-term relevance and maintain a competitive edge.
What are the potential long-term cost savings or operational efficiencies expected from deploying this neural inference technology?
The primary expectation is enhanced processing power and efficiency for AI tasks, potentially leading to faster decision-making and reduced reliance on less efficient computational methods. Long-term savings could arise from improved performance in areas like intelligence analysis, autonomous systems, and data processing, though quantifying this upfront is challenging.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Solicitation ID: FA875019S7007
Offers Received: 2
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Address: 650 HARRY RD, SAN JOSE, CA, 95120
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $88,491,635
Exercised Options: $74,999,951
Current Obligation: $74,999,951
Actual Outlays: $5,984,935
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $78,164
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-08-16
Current End Date: 2024-02-16
Potential End Date: 2024-02-16 00:00:00
Last Modified: 2023-08-29
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