DHS Renews IBM Software License for $100M, Raising Concerns Over Competition and Value
Contract Overview
Contract Amount: $100,297,501 ($100.3M)
Contractor: Escgov, Inc.
Awarding Agency: Department of Homeland Security
Start Date: 2016-03-31
End Date: 2018-03-31
Contract Duration: 730 days
Daily Burn Rate: $137.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IBM DISTRIBUTED SOFTWARE LICENSE AND MAINTENANCE RENEWAL
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Homeland Security obligated $100.3 million to ESCGOV, INC. for work described as: IBM DISTRIBUTED SOFTWARE LICENSE AND MAINTENANCE RENEWAL Key points: 1. Significant spending on software licenses highlights reliance on established vendors. 2. Limited competition raises questions about price discovery and potential overpayment. 3. The contract's duration and fixed-price nature may limit flexibility and cost savings. 4. Analysis needed to determine if this renewal represents fair market value for the services provided.
Value Assessment
Rating: questionable
The $100.3 million renewal for IBM software is substantial. Without clear benchmarks or competitive pricing data, it's difficult to assess if this price is reasonable compared to similar enterprise software renewals.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While listed as full and open competition, the award mechanism (BPA CALL) suggests a pre-existing framework. Further investigation is needed to confirm if the competition truly allowed for broad market participation and effective price discovery for this specific renewal.
Taxpayer Impact: Taxpayer funds are committed to a significant software license renewal. Ensuring competitive pricing and value for money is crucial to avoid unnecessary expenditure.
Public Impact
Customs and Border Protection relies on this IBM software for critical operations. The renewal impacts the agency's budget for IT infrastructure and services. Potential for increased costs if competitive pressures were not fully realized.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clear value assessment
- Potential for uncompetitive pricing
- Long-term commitment without clear performance metrics
Positive Signals
- Use of a BPA call may indicate streamlined procurement
- Firm Fixed Price contract provides budget certainty
Sector Analysis
This spending falls within the IT sector, specifically software licensing and maintenance. Benchmarks for enterprise software renewals vary widely based on vendor, product, and contract terms, but $100M is a significant investment.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Analysis of the procurement process should explore opportunities for small business participation in future related procurements.
Oversight & Accountability
Oversight is needed to ensure the Department of Homeland Security is obtaining fair market value for this substantial software license renewal and that the competitive process was robust.
Related Government Programs
- Office Machinery and Equipment Rental and Leasing
- Department of Homeland Security Contracting
- U.S. Customs and Border Protection Programs
Risk Flags
- High dollar value renewal
- Potential for vendor lock-in
- Limited transparency on specific software and its benefits
- Questions surrounding the effectiveness of 'full and open competition' via BPA CALL
Tags
office-machinery-and-equipment-rental-an, department-of-homeland-security, va, bpa-call, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $100.3 million to ESCGOV, INC.. IBM DISTRIBUTED SOFTWARE LICENSE AND MAINTENANCE RENEWAL
Who is the contractor on this award?
The obligated recipient is ESCGOV, INC..
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 $100.3 million.
What is the period of performance?
Start: 2016-03-31. End: 2018-03-31.
What specific IBM software is being renewed, and what is its criticality to CBP operations?
The specific IBM software is not detailed in the provided data. However, given the substantial renewal cost, it is likely a core enterprise solution critical for CBP's mission, potentially related to data management, analytics, or operational systems. Understanding the software's function is key to assessing its value and necessity.
How was the 'full and open competition' process structured, and did it effectively solicit bids from all qualified vendors?
The award mechanism is a BPA CALL, suggesting a pre-established Basic Purchasing Agreement. While this can streamline procurement, it's crucial to verify if the BPA itself was awarded competitively and if the call against it allowed for broad market participation and effective price discovery for this specific renewal. Without this, 'full and open' may be nominal.
What is the projected return on investment or measurable benefit derived from this $100M software renewal for CBP?
The provided data does not include information on the projected return on investment or measurable benefits. A thorough analysis would require documentation from CBP outlining the expected outcomes, performance improvements, or cost savings attributed to this renewed license. Without this, assessing the true value for taxpayers is challenging.
Industry Classification
NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Office Machinery and Equipment Rental and Leasing
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 7726 FALSTAFF RD, MC LEAN, VA, 22102
Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $100,297,501
Exercised Options: $100,297,501
Current Obligation: $100,297,501
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: HSHQDC11A00040
IDV Type: BPA
Timeline
Start Date: 2016-03-31
Current End Date: 2018-03-31
Potential End Date: 2018-03-31 14:22:47
Last Modified: 2025-08-04
More Contracts from Escgov, Inc.
- Order for Software and Services Special Option for ESS IBM BPA Prodcuts — $104.0M (Department of Homeland Security)
- IVM Software Licenses and Maintenance — $94.2M (Department of Homeland Security)
- IBM Software Licenses and Annual Maintenance — $83.8M (Department of Homeland Security)
- IBM Software Renewal — $68.5M (Department of the Treasury)
- Computer Software Maintenance — $49.9M (Department of the Treasury)
Other Department of Homeland Security Contracts
- THE United States Coast Guard HAS a Requirement to Procure UP to Twenty-Six (26) Fast Response Cutters (frcs) on a Firm Fixed Price (FFP) Basis With an Economic Price Adjustment (EPA). Phase II of the FRC Program Will Complete the Fleet for a Total of 58 Cutters — $2.1B (Bollinger Shipyards Lockport, L.L.C.)
- Design and Construct NEW Vertical Barrier and Power Distribution, Lighting, Cameras, Equipment Shelters and Linear Ground Detection System (lgds) in Hildago County, NM — $1.8B (Fisher Sand & Gravel CO)
- Production&delivery of National Security Cutter (NSC) 6 — $1.7B (Huntington Ingalls Incorporated)
- YUM-2 Vertical Border and Waterborne Barrier Construction — $1.7B (Fisher Sand & Gravel CO)
- Construct Vertical Border Barrier — $1.6B (Fisher Sand & Gravel CO)