DHS Awards $112.6M Firm Fixed Price Contract to IBM for IT Services

Contract Overview

Contract Amount: $112,600,036 ($112.6M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2007-09-27

End Date: 2009-09-30

Contract Duration: 734 days

Daily Burn Rate: $153.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TO EDME

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $112.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: TO EDME Key points: 1. IBM secured a significant contract valued at over $112 million. 2. The contract was awarded under full and open competition, indicating a competitive bidding process. 3. The firm fixed price structure aims to control costs for the government. 4. This award falls within the IT sector, a common area for large federal contracts.

Value Assessment

Rating: good

The contract's firm fixed price nature suggests a clear understanding of scope and cost expectations. Benchmarking against similar IT service contracts awarded by DHS would provide further insight into the pricing's competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The award utilized full and open competition, allowing any qualified vendor to bid. This method generally promotes competitive pricing and ensures the government receives the best value.

Taxpayer Impact: The competitive bidding process likely resulted in a fair market price, maximizing taxpayer value for the IT services procured.

Public Impact

Citizens benefit from enhanced IT infrastructure and services managed by a major technology provider. The contract supports critical functions within U.S. Customs and Border Protection. This award contributes to the broader technology landscape and digital transformation efforts within the federal government.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on work is not competitively bid.
Reliance on a single large contractor for critical IT services.

Positive Signals

Firm fixed price contract helps manage cost certainty.
Awarded through full and open competition, suggesting competitive pricing.
Long-term contract provides stability for service delivery.

Sector Analysis

This contract is within the Information Technology sector, which sees substantial federal spending. Benchmarks for similar IT service contracts often range from tens to hundreds of millions of dollars, depending on scope and duration.

Small Business Impact

The data indicates this contract was awarded to a large business (IBM) and does not show any specific set-asides for small businesses. Therefore, the direct impact on small businesses is likely minimal unless they are subcontractors.

Oversight & Accountability

The contract's oversight would fall under the Department of Homeland Security and U.S. Customs and Border Protection. Standard government procurement regulations and contract management practices would apply to ensure performance and accountability.

Related Government Programs

Department of Homeland Security Contracting
U.S. Customs and Border Protection Programs

Risk Flags

Potential for cost overruns if scope creep occurs despite fixed price.
Dependence on a single large contractor for critical IT functions.
Limited visibility into subcontractor performance if applicable.
Risk of technological obsolescence if services are not regularly updated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $112.6 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. TO EDME

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $112.6 million.

What is the period of performance?

Start: 2007-09-27. End: 2009-09-30.

What specific IT services were procured under this contract, and how do they align with the agency's mission objectives?

The contract likely encompassed a range of IT services essential for U.S. Customs and Border Protection operations, such as system maintenance, software development, network support, or cybersecurity. These services would directly support the agency's mission of securing borders and facilitating lawful trade and travel, ensuring the efficient and secure operation of critical government functions.

What were the key evaluation criteria used during the full and open competition, and how did IBM's proposal meet these requirements?

Key evaluation criteria typically include technical approach, past performance, management capability, and price. IBM, as a major IT provider, likely demonstrated strong capabilities in these areas, offering a robust technical solution and a competitive price. The agency would have assessed how well IBM's proposal addressed the specific requirements and risks outlined in the solicitation.

How does the $112.6 million award compare to the estimated value of similar IT service contracts within federal agencies of similar size and scope?

The $112.6 million award for a two-year contract is substantial but falls within the expected range for large-scale IT services procured by major federal agencies like DHS. Benchmarking against contracts for similar services (e.g., system integration, managed services) awarded by agencies like DoD or GSA would reveal if this price is competitive, considering the specific deliverables and service levels.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $116,816,745

Exercised Options: $112,600,036

Current Obligation: $112,600,036

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline