IBM contract for electronic computer manufacturing awarded by Department of the Interior for over $23.7M

Contract Overview

Contract Amount: $23,719,987 ($23.7M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of the Interior

Start Date: 2008-12-22

End Date: 2013-09-30

Contract Duration: 1,743 days

Daily Burn Rate: $13.6K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM SRO

Place of Performance

Location: LAKEWOOD, JEFFERSON County, COLORADO, 80227

State: Colorado Government Spending

Plain-Language Summary

Department of the Interior obligated $23.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IBM SRO Key points: 1. The contract value of over $23.7 million represents a significant investment in electronic computer manufacturing. 2. Competition dynamics for this contract appear to be limited, with a single awardee. 3. The duration of the contract (1743 days) suggests a long-term need for these services. 4. The fixed-price contract type may offer cost certainty for the government. 5. The award was made under the Departmental Offices, indicating a broad agency need. 6. The specific product code (334111) points to a focus on computer manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the goods or services procured. However, a $23.7 million award over nearly five years suggests a substantial commitment. Comparing this to similar contracts for electronic computer manufacturing would require access to a broader dataset of comparable procurements. The firm fixed-price nature of the contract provides some predictability, but the ultimate value for money depends on the performance and utility of the delivered equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a competitive delivery order, but the data indicates only one awardee. This suggests that while the initial solicitation may have been open, the final award was effectively a sole-source negotiation or that competition was extremely limited. The lack of multiple bidders raises questions about the effectiveness of the competition strategy and its potential impact on achieving the best possible pricing for the government.

Taxpayer Impact: Limited competition can potentially lead to higher prices for taxpayers if effective market research and outreach were not conducted to encourage broader participation.

Public Impact

The Department of the Interior benefits from the acquisition of electronic computer hardware and related manufacturing services. This contract supports the operational needs of the Department's various offices. The geographic impact is likely concentrated where the Department of the Interior operates, potentially nationwide. The contract supports jobs within the electronic computer manufacturing sector, specifically with IBM.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than a more robustly competed contract.
The long contract duration could lead to technology obsolescence if not managed carefully.
Lack of transparency regarding the specific deliverables makes it difficult to assess performance risks.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
IBM is a large, established contractor with a significant track record in technology.
The award was made through a competitive process, even if only one bid was ultimately successful.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on the manufacturing of electronic computers. The market for computer hardware is large and dynamic, with significant spending by government agencies. This contract represents a portion of the federal government's overall expenditure on IT infrastructure and equipment, contributing to the broader IT services and manufacturing industry.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The primary contractor, IBM, is a large corporation, and any subcontracting would be at their discretion, not mandated by a small business set-aside.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's contracting officers and program managers. Accountability measures would be defined in the contract's terms and conditions, including performance standards and delivery schedules. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Procurement
Computer Hardware Acquisition
Department of the Interior IT Spending
Manufacturing Contracts

Risk Flags

Limited competition
Potential for technological obsolescence
Lack of specific deliverable details

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $23.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IBM SRO

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $23.7 million.

What is the period of performance?

Start: 2008-12-22. End: 2013-09-30.

What specific types of electronic computers were procured under this contract?

The provided data identifies the North American Industry Classification System (NAICS) code as 334111, which pertains to 'Electronic Computer Manufacturing.' However, it does not specify the exact types of computers (e.g., desktops, servers, specialized computing devices). Further details would be required from the contract's statement of work or award documentation to understand the precise nature of the hardware acquired. This level of detail is crucial for assessing the relevance and potential obsolescence of the procured technology over the contract's nearly five-year duration.

How does the awarded amount of over $23.7 million compare to typical spending on similar electronic computer manufacturing contracts?

Without access to a comprehensive database of comparable contracts, a precise benchmark is difficult. However, $23.7 million over approximately 4.7 years (1743 days) represents an average annual expenditure of roughly $5 million. This figure can be considered moderate to significant depending on the scale and sophistication of the computers. For context, large-scale federal IT procurements, especially for enterprise-level server infrastructure or high-performance computing, can run into tens or hundreds of millions of dollars. This contract appears to be for a substantial, but not exceptionally large, quantity or type of computing equipment.

What are the primary risks associated with a long-duration contract (1743 days) for electronic computer manufacturing?

The primary risk with a long-duration contract for electronic computer manufacturing is technological obsolescence. The pace of innovation in computing is rapid, and hardware procured at the beginning of a multi-year contract could be outdated by its end. This can lead to decreased performance, compatibility issues with newer systems, and reduced return on investment. Another risk is the potential for the contractor to become less responsive or innovative over time, knowing the government is locked into a long-term agreement. Effective contract management, including provisions for upgrades or technology refresh cycles, is essential to mitigate these risks.

What does the 'COMPETITIVE DELIVERY ORDER' designation imply about the procurement process?

A 'COMPETITIVE DELIVERY ORDER' suggests that the contract was awarded under a pre-existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle that was competed initially. This specific delivery order was then issued competitively among the awardees of that base contract. However, the data indicating only one awardee ('no': 1) for this specific order implies that either only one contractor responded to this particular order solicitation, or that despite a competitive solicitation, only one offer was deemed acceptable or viable. This situation warrants scrutiny to ensure that the initial competition for the base contract was robust and that efforts were made to encourage broad participation for individual orders.

What is the significance of the 'Departmental Offices' as the awarding agency sub-division?

The 'Departmental Offices' designation typically signifies that the procurement serves a broad, cross-cutting need within the entire Department of the Interior, rather than being specific to a single bureau or operating division (like the Bureau of Land Management or the National Park Service). This suggests the acquired electronic computer hardware is intended for general administrative, operational, or IT infrastructure support that benefits multiple components of the department. It implies a centralized IT strategy or a common requirement across various departmental functions.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFQ 46812

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $23,719,987

Exercised Options: $23,719,987

Current Obligation: $23,719,987

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: NNG07DA12B

IDV Type: GWAC

Timeline