DHS Awards $580M for EADIS Software Development to IBM Over 9 Years

Contract Overview

Contract Amount: $580,450,064 ($580.5M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2008-09-05

End Date: 2017-12-14

Contract Duration: 3,387 days

Daily Burn Rate: $171.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: EADIS SOFTWARE DEVELOPMENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $580.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: EADIS SOFTWARE DEVELOPMENT Key points: 1. Significant investment in custom computer programming services for FEMA. 2. IBM secured a large contract, highlighting potential market concentration. 3. Long contract duration (9 years) may pose risks for adaptability and cost control. 4. The IT sector sees substantial spending on custom software solutions.

Value Assessment

Rating: fair

The contract value of $580M over 9 years averages approximately $64.5M annually. Benchmarking this against similar large-scale custom software development contracts is challenging without more granular data on scope and complexity. However, the Cost Plus Award Fee structure suggests potential for cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

This was awarded as a competitive delivery order, indicating that multiple vendors likely competed. The competitive nature at the outset is positive for price discovery. However, the long-term nature and potential for follow-on work could reduce future competition.

Taxpayer Impact: Taxpayer funds are being used for a substantial software development project. While competition was present initially, the long duration and fee structure warrant close monitoring to ensure value for money.

Public Impact

Impacts FEMA's ability to manage emergency data and operations. Supports critical government functions related to disaster response. IBM's role in a major federal IT system.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Long contract duration
Cost Plus Award Fee structure
Potential for vendor lock-in

Positive Signals

Initial competitive award
Supports critical agency mission

Sector Analysis

This contract falls within the IT sector, specifically custom computer programming services. Spending in this area is consistently high as agencies modernize systems and develop new capabilities. Benchmarks for similar large, multi-year custom software projects are difficult to establish due to unique requirements.

Small Business Impact

The data indicates the prime contractor is IBM, a large business. There is no information provided on small business participation or subcontracting goals within this specific delivery order.

Oversight & Accountability

The Cost Plus Award Fee structure requires robust oversight from FEMA to ensure performance targets are met and costs are controlled. Regular reviews and audits would be essential to hold IBM accountable for delivering value and managing expenses effectively.

Related Government Programs

Custom Computer Programming Services
Department of Homeland Security Contracting
Federal Emergency Management Agency Programs

Risk Flags

Long contract duration (9 years) increases risk of obsolescence and changing requirements.
Cost Plus Award Fee structure can incentivize spending and lead to cost overruns.
Lack of transparency on small business participation.
Potential for vendor lock-in with a single large provider over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $580.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. EADIS SOFTWARE DEVELOPMENT

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 (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $580.5 million.

What is the period of performance?

Start: 2008-09-05. End: 2017-12-14.

What specific functionalities does the EADIS software provide, and how critical are they to FEMA's core mission?

The EADIS (Emergency Application Development and Integration Services) software likely supports FEMA's critical functions in managing disaster data, resource allocation, and communication during emergencies. Understanding the specific modules and their direct impact on response effectiveness would clarify the true value of this significant investment and justify the substantial expenditure.

How has the Cost Plus Award Fee structure impacted the final cost and IBM's performance over the contract's lifespan?

The Cost Plus Award Fee (CPAF) structure allows for reimbursement of costs plus a fixed fee, with potential for award incentives based on performance. Analyzing the final obligated amount versus initial estimates and examining performance reviews would reveal if the CPAF structure effectively controlled costs while incentivizing high-quality delivery or if it led to cost overruns and less-than-optimal performance.

What was the competitive landscape for this contract, and were there opportunities for smaller, innovative firms to participate?

While this was a competitive delivery order, the prime contractor is IBM. Further investigation into the specific solicitation and award process would clarify the number of bidders and the extent of competition. Understanding if smaller, specialized firms were involved as subcontractors or if the scope could have been broken down to encourage broader participation is key to assessing overall market impact and innovation.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

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: $581,413,412

Exercised Options: $580,660,623

Current Obligation: $580,450,064

Actual Outlays: $-23,549

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00019

IDV Type: IDC

Timeline