IBM awarded $62.3M task order for IT modernization by U.S. Customs and Border Protection

Contract Overview

Contract Amount: $62,291,491 ($62.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2011-04-29

End Date: 2012-04-30

Contract Duration: 367 days

Daily Burn Rate: $169.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MODERNIZATION TASK ORDER ECOM

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22153

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $62.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MODERNIZATION TASK ORDER ECOM Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Task order for IT modernization services indicates a focus on upgrading critical government systems. 3. The contract duration of approximately one year suggests a project with defined deliverables. 4. Awarded by U.S. Customs and Border Protection, highlighting the importance of IT infrastructure for border security. 5. The cost-plus-fixed-fee pricing structure allows for flexibility but requires careful oversight to manage costs. 6. IBM's extensive experience in government contracting positions them to handle complex IT modernization projects.

Value Assessment

Rating: good

The contract value of $62.3 million for a one-year IT modernization task order appears within a reasonable range for large-scale government IT projects. Benchmarking against similar IT modernization contracts awarded by agencies like DHS or other federal entities would provide a more precise value-for-money assessment. The cost-plus-fixed-fee structure, while common for complex projects, necessitates diligent oversight to ensure costs remain controlled and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This task order was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open competition suggests that the agency sought the best possible solution and value from the market.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs and encourages innovation, ensuring that government funds are used efficiently.

Public Impact

U.S. Customs and Border Protection (CBP) benefits from modernized IT systems, potentially improving operational efficiency and data processing capabilities. The services delivered are focused on IT modernization, which could encompass software development, system integration, and infrastructure upgrades. The geographic impact is likely national, supporting CBP's nationwide operations. Workforce implications may include the need for specialized IT personnel within CBP and potential subcontracting opportunities for smaller IT firms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the cost-plus-fixed-fee structure if not managed rigorously.
Dependence on a single contractor (IBM) for a critical IT modernization effort could pose risks if performance issues arise.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
IBM is a large, established contractor with a proven track record in large-scale IT projects.
The task order addresses a critical need for IT modernization within a key federal agency.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT modernization services. The federal IT market is substantial, with agencies consistently investing in upgrading legacy systems to improve efficiency, security, and data analytics capabilities. Comparable spending benchmarks for IT modernization projects within federal agencies often range from tens to hundreds of millions of dollars, depending on the scope and complexity.

Small Business Impact

While this contract was awarded to IBM, a large prime contractor, there is no explicit indication of a small business set-aside. However, large IT contracts often include subcontracting requirements, which can provide opportunities for small businesses to participate in delivering specialized services or components of the overall project. The extent of small business participation would depend on IBM's subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Customs and Border Protection contracting officers and program managers. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures and progress to ensure alignment with the fixed fee and project objectives. Transparency would be enhanced through regular reporting requirements and potential audits by agency oversight bodies or the Government Accountability Office (GAO).

Related Government Programs

DHS IT Modernization Initiatives
CBP Technology Modernization Programs
Federal Civilian IT Services Contracts
Large-Scale IT System Integration Projects

Risk Flags

Cost-plus-fixed-fee structure requires diligent oversight to prevent cost overruns.
Potential for scope creep in IT modernization projects if not clearly defined.
Dependence on a single contractor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $62.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MODERNIZATION TASK ORDER ECOM

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 $62.3 million.

What is the period of performance?

Start: 2011-04-29. End: 2012-04-30.

What specific IT modernization services were included in this task order, and what were the key performance indicators (KPIs) for success?

The provided data does not detail the specific IT modernization services encompassed by this task order, nor does it list the key performance indicators (KPIs) established for its success. Typically, IT modernization efforts can include a wide range of activities such as legacy system migration, cloud adoption, software development, cybersecurity enhancements, and data center consolidation. Without access to the full contract statement of work (SOW), it is impossible to ascertain the precise services rendered or the metrics used to evaluate IBM's performance. Future analysis would benefit from reviewing the SOW to understand the scope and the performance metrics to assess the value delivered.

How does the $62.3 million award compare to other IT modernization contracts awarded by DHS or CBP in recent years?

The $62.3 million award for this IT modernization task order represents a significant investment. To benchmark its value, one would compare it to similar IT modernization contracts awarded by the Department of Homeland Security (DHS) or U.S. Customs and Border Protection (CBP) over the past 3-5 years. For instance, if CBP has awarded multiple contracts in the $50-$100 million range for similar modernization efforts, this award would be considered typical. Conversely, if comparable projects were significantly smaller or larger, it might suggest this award is either particularly cost-effective or potentially over-priced relative to market norms. Access to a broader dataset of federal IT contracts would enable a more robust comparison.

What is IBM's track record with DHS and CBP, particularly on cost-plus-fixed-fee contracts for IT services?

IBM has a substantial and long-standing track record of contracting with federal agencies, including DHS and CBP. They are a major provider of IT services across the government. For cost-plus-fixed-fee (CPFF) contracts, IBM's performance history would need to be reviewed through sources like the Federal Procurement Data System (FPDS) or agency-specific performance evaluation systems. CPFF contracts require careful management of costs and adherence to the fixed fee. Examining past CPFF contracts awarded to IBM by DHS/CBP would reveal their ability to deliver within budget constraints and manage project scope effectively, identifying any patterns of cost overruns or successful project completion.

What are the potential risks associated with a cost-plus-fixed-fee contract for a project of this magnitude?

Cost-plus-fixed-fee (CPFF) contracts, while offering flexibility for complex projects with evolving requirements, carry inherent risks. For a $62.3 million IT modernization task order, the primary risk is potential cost escalation beyond initial estimates, even with a fixed fee component. If the contractor (IBM) incurs higher-than-anticipated costs, they may seek to maximize their fixed fee by potentially cutting corners on quality or scope, or by prolonging the project timeline if not strictly managed. Conversely, the government risks paying more than necessary if the contractor is not incentivized to be highly efficient. Robust oversight, clear definition of work, and stringent reporting are crucial to mitigate these risks.

How has federal spending on IT modernization evolved, and where does this contract fit within that trend?

Federal spending on IT modernization has been a consistent priority, driven by the need to replace aging infrastructure, enhance cybersecurity, improve service delivery, and leverage emerging technologies like cloud computing and artificial intelligence. Agencies like DHS consistently allocate significant portions of their budgets to IT upgrades. This $62.3 million task order aligns with the ongoing trend of federal agencies investing heavily in modernizing their IT systems to meet evolving mission requirements and citizen expectations. It reflects a strategic decision by CBP to upgrade its technological capabilities, fitting within the broader federal push towards digital transformation.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $91,309,235

Exercised Options: $62,302,741

Current Obligation: $62,291,491

Actual Outlays: $-48,553

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: TC2001025

IDV Type: IDC

Timeline