CBP's $71.9M IT services contract with IBM awarded under full and open competition

Contract Overview

Contract Amount: $71,886,249 ($71.9M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2016-07-01

End Date: 2018-05-31

Contract Duration: 699 days

Daily Burn Rate: $102.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: SERVICES TO SUPPORT OIT SYSTEMS. IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20229

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $71.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: SERVICES TO SUPPORT OIT SYSTEMS. IGF::OT::IGF Key points: 1. Contract awarded to a single, large incumbent vendor, raising questions about potential price efficiencies. 2. The contract's duration and value suggest a significant reliance on IBM for critical IT support. 3. Limited data on performance metrics makes it difficult to assess the overall value for money. 4. The use of labor hours pricing can introduce cost uncertainty if not managed effectively. 5. The contract's focus on computer programming services aligns with the agency's IT modernization efforts.

Value Assessment

Rating: fair

The contract's total value of $71.9 million over approximately two years suggests a substantial investment in IT services. Benchmarking against similar large-scale IT support contracts is challenging without detailed performance data and specific service breakdowns. The labor hours pricing model introduces a degree of variability, and without clear performance metrics or comparison to fixed-price contracts, assessing the true value for money is difficult. The award to a single, established vendor like IBM may indicate a preference for proven capabilities but could also limit competitive pricing pressures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. However, the data shows only one award was made, suggesting that IBM was the selected vendor. The level of competition is not explicitly detailed (e.g., number of bids received), but the 'full and open' designation implies a broad solicitation. This approach is generally favorable for price discovery, but the ultimate outcome of a single award warrants further investigation into the bidding process and evaluation criteria.

Taxpayer Impact: A full and open competition process is intended to ensure taxpayers receive the best value by encouraging a wide range of vendors to compete, potentially driving down costs through market forces.

Public Impact

The primary beneficiary is U.S. Customs and Border Protection (CBP), which receives essential IT support services. Services delivered include computer programming and support for the agency's IT systems, crucial for border security operations. The contract's impact is primarily within the District of Columbia, where the agency's IT operations are likely centralized. The contract supports a workforce of IT professionals, likely including programmers, system administrators, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to labor hours pricing if not closely monitored.
Lack of detailed performance metrics makes it difficult to assess contractor efficiency and effectiveness.
Reliance on a single large vendor could limit future flexibility and innovation.
The broad scope of 'computer programming services' may obscure specific cost drivers.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Contract awarded to a well-established IT services provider with a track record.
Services directly support critical national security functions of CBP.
The contract duration allows for sustained support of essential IT systems.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer programming and related services. The IT services market is highly competitive, with a wide range of providers from large system integrators to specialized software developers. Federal spending in this area is substantial, driven by the need for agencies to maintain and modernize complex IT infrastructures. Comparable spending benchmarks would typically involve analyzing IT support contracts of similar scope and duration across various federal agencies, considering factors like service type, labor categories, and geographic location.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to IBM, it is unlikely to have significant direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor. The absence of small business set-asides means that the direct economic benefit to the small business ecosystem from this specific award is minimal, though IBM may engage small businesses indirectly through its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically reside with the U.S. Customs and Border Protection (CBP) contracting officer and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would likely fall under the Department of Homeland Security's Office of Inspector General, which investigates fraud, waste, and abuse in agency programs.

Related Government Programs

IT Support Services
Custom Computer Programming
Department of Homeland Security IT Contracts
CBP Systems Modernization
Large IT Services Contracts

Risk Flags

Potential for cost creep due to labor hours pricing.
Lack of detailed performance metrics for value assessment.
Single award may indicate limited competition despite 'full and open' solicitation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $71.9 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. SERVICES TO SUPPORT OIT SYSTEMS. IGF::OT::IGF

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 $71.9 million.

What is the period of performance?

Start: 2016-07-01. End: 2018-05-31.

What is the historical spending trend for IT services by U.S. Customs and Border Protection?

Analyzing historical spending trends for IT services by U.S. Customs and Border Protection (CBP) reveals a consistent and significant investment in technology to support its vast mission. Over the past decade, CBP has allocated billions of dollars towards IT modernization, system maintenance, and the procurement of new technologies. This spending is driven by the need to manage vast amounts of data, secure borders, facilitate trade, and enhance operational efficiency. Spending patterns often reflect evolving threats, technological advancements, and policy directives. For instance, increased focus on cybersecurity, data analytics, and cloud computing has likely influenced recent IT budget allocations. The contract in question, valued at approximately $71.9 million, represents a portion of this larger, ongoing investment in CBP's technological infrastructure.

How does the per-unit cost of services under this contract compare to similar IT support contracts?

Directly comparing the per-unit cost of services under this contract to similar IT support contracts is challenging without granular data on the specific labor categories, hours billed, and the exact nature of the 'computer programming services' rendered. The contract utilizes a 'labor hours' pricing model (pt: LABOR HOURS), which means costs are based on the time spent by personnel rather than fixed deliverables. Benchmarking would require access to detailed breakdowns of hourly rates for various skill sets (e.g., senior programmers, junior analysts, project managers) and comparing these rates against market averages or rates in other federal IT contracts. Without this detailed information, it's difficult to definitively assess if the per-unit costs are competitive or represent good value for money. The contract's total value of $71.9 million (a) over its duration provides a high-level figure, but not a per-unit cost.

What is IBM's track record with Department of Homeland Security contracts, particularly for IT services?

International Business Machines Corporation (IBM) has a substantial and long-standing track record of providing IT services to the Department of Homeland Security (DHS) and its various components, including U.S. Customs and Border Protection (CBP). IBM has been a significant federal contractor for decades, offering a wide array of services ranging from cloud computing and cybersecurity to legacy system modernization and data analytics. Their history with DHS includes numerous large-scale contracts supporting critical infrastructure and operational systems. While this specific contract (awarded 2016-07-01) highlights a significant engagement, IBM's broader portfolio with DHS likely encompasses many other projects. Assessing their overall track record involves reviewing past performance evaluations, contract modifications, and any documented issues or successes across their extensive engagements with the agency.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data summary does not explicitly detail the Key Performance Indicators (KPIs) used to measure the success of this specific contract. Typically, for IT services contracts, especially those involving computer programming and system support, KPIs would focus on aspects such as system uptime and availability, response times for issue resolution, successful completion of programming tasks within agreed timelines, adherence to security protocols, and overall user satisfaction. The 'labor hours' pricing model (pt: LABOR HOURS) suggests that performance might be measured more by the efficient utilization of labor hours and the successful delivery of defined tasks rather than strict output-based metrics. Without access to the contract's statement of work or performance work statement, a definitive list of KPIs cannot be provided.

What is the potential risk associated with the 'labor hours' pricing model for this contract?

The primary risk associated with a 'labor hours' pricing model (pt: LABOR HOURS) for this contract is the potential for cost overruns if not managed diligently. Unlike fixed-price contracts, where the contractor assumes more risk for cost control, labor hours contracts pay for the time spent by personnel. This can lead to increased costs if projects take longer than anticipated, if staffing levels are higher than necessary, or if productivity is low. For the government, effective oversight is crucial. This involves rigorous tracking of hours, ensuring that personnel are working on authorized tasks, validating the skill levels charged, and closely monitoring project progress against estimated timelines. Without strong contract management and performance monitoring, the 'labor hours' model can be less cost-effective than other pricing structures.

How does this contract fit into the broader IT modernization strategy of U.S. Customs and Border Protection?

This contract, focused on 'Computer Programming Services' (nd: 541511) and supporting 'OIT Systems' (d: SERVICES TO SUPPORT OIT SYSTEMS), directly aligns with the broader IT modernization strategy of U.S. Customs and Border Protection (CBP). CBP, like many large federal agencies, faces the challenge of maintaining aging legacy systems while simultaneously adopting new technologies to enhance border security, streamline trade processes, and improve operational efficiency. Contracts for programming services are essential for developing new applications, integrating disparate systems, updating existing software, and potentially migrating services to more modern platforms like cloud environments. The duration and value of this contract suggest it played a role in sustaining and evolving CBP's critical IT infrastructure during the period of performance (2016-2018), contributing to the agency's ongoing efforts to modernize its technological capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $81,960,476

Exercised Options: $71,886,249

Current Obligation: $71,886,249

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F110DA

IDV Type: FSS

Timeline