DHS Spends $83.8M on IBM Software Licenses and Maintenance via BPA Call

Contract Overview

Contract Amount: $83,761,626 ($83.8M)

Contractor: Escgov, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2013-04-15

End Date: 2018-05-31

Contract Duration: 1,872 days

Daily Burn Rate: $44.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM SOFTWARE LICENSES AND ANNUAL MAINTENANCE

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $83.8 million to ESCGOV, INC. for work described as: IBM SOFTWARE LICENSES AND ANNUAL MAINTENANCE Key points: 1. Significant expenditure on software licenses and maintenance highlights reliance on IBM. 2. Competition was full and open, suggesting potential for price discovery. 3. The contract duration of 1872 days (approx. 5 years) indicates long-term software needs. 4. The NAICS code 532420 (Office Machinery Rental/Leasing) seems misaligned with software licensing.

Value Assessment

Rating: fair

The total award amount of $83.8M over approximately 5 years is substantial. Without specific per-unit pricing or comparison data for similar IBM software licenses and maintenance agreements, a precise value assessment is difficult. However, the firm fixed-price structure provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition via a BPA Call. This method generally allows for a broad range of potential offerors, which can lead to competitive pricing. The specific pricing achieved through this mechanism is not detailed here.

Taxpayer Impact: Taxpayer funds are utilized for this significant software expenditure. While competition was employed, the overall value and necessity of these specific IBM licenses and maintenance over the contract term warrant scrutiny.

Public Impact

TSA relies on IBM software, impacting critical transportation security operations. The substantial investment may limit flexibility to adopt alternative software solutions. Long-term maintenance agreements can lock agencies into specific vendor ecosystems. Transparency in per-unit software costs would enhance public understanding of value.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

NAICS code mismatch
Lack of per-unit cost transparency
Potential vendor lock-in

Positive Signals

Full and open competition utilized
Firm fixed-price contract

Sector Analysis

This spending falls under IT services, specifically software licensing and maintenance. Benchmarks for similar large-scale IBM software agreements within government agencies are not readily available but typically represent a significant portion of IT budgets.

Small Business Impact

The data does not indicate any specific participation or set-asides for small businesses in this contract. The nature of large enterprise software licensing often favors established vendors, potentially limiting small business involvement.

Oversight & Accountability

The award was made via a BPA Call, suggesting it was placed against an existing Blanket Purchase Agreement. Oversight would involve ensuring the BPA itself was competitively awarded and that this call adheres to its terms and conditions.

Related Government Programs

Office Machinery and Equipment Rental and Leasing
Department of Homeland Security Contracting
Transportation Security Administration Programs

Risk Flags

NAICS code 532420 (Office Machinery Rental and Leasing) appears to be an incorrect classification for software licenses and maintenance.
Lack of detailed breakdown of software products and per-unit costs makes value assessment difficult.
Long contract duration (1872 days) may indicate potential for vendor lock-in.
No indication of small business participation.
The award is a BPA Call, requiring scrutiny of the underlying BPA's competitiveness and terms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $83.8 million to ESCGOV, INC.. IBM SOFTWARE LICENSES AND ANNUAL MAINTENANCE

Who is the contractor on this award?

The obligated recipient is ESCGOV, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $83.8 million.

What is the period of performance?

Start: 2013-04-15. End: 2018-05-31.

What specific IBM software products and versions are covered under this $83.8M award, and how do their costs compare to commercial market rates?

The provided data lacks specificity regarding the exact IBM software products and versions included in this $83.8M award. Without this detail, a direct comparison to commercial market rates is impossible. However, large enterprise software licenses and annual maintenance agreements are typically priced based on factors like user count, feature sets, and support levels, often resulting in significant costs.

Given the $83.8M expenditure over five years, what is the assessed risk of vendor lock-in and the potential impact on future IT modernization efforts at TSA?

A significant expenditure on a single vendor's software for an extended period, like this $83.8M IBM contract, carries a considerable risk of vendor lock-in. This can hinder TSA's ability to adopt newer, potentially more cost-effective or technologically advanced solutions from other vendors, impacting future IT modernization and agility.

How effectively did the 'full and open competition' process ensure optimal value for taxpayer money on these IBM software licenses and maintenance?

While 'full and open competition' is a positive indicator for price discovery, its effectiveness in ensuring optimal value cannot be fully assessed without knowing the number of bids received and the specific pricing structures. The firm fixed-price nature provides cost certainty, but the true value depends on whether the negotiated price was competitive against market alternatives for the specific software and maintenance.

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: 8300 GREENSBORO DR. SUITE 1150, MC LEAN, VA, 22102

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $138,305,199

Exercised Options: $83,761,626

Current Obligation: $83,761,626

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HSHQDC11A00040

IDV Type: BPA

Timeline