DoD's $19.2M IBM Software Maintenance Contract Awarded to GovSmart, Inc. Amidst Full and Open Competition

Contract Overview

Contract Amount: $19,227,006 ($19.2M)

Contractor: Govsmart, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-01

End Date: 2026-08-31

Contract Duration: 1,095 days

Daily Burn Rate: $17.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM ENTERPRISE SOFTWARE MAINTENANCE

Place of Performance

Location: BATTLE CREEK, CALHOUN County, MICHIGAN, 49037

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $19.2 million to GOVSMART, INC. for work described as: IBM ENTERPRISE SOFTWARE MAINTENANCE Key points: 1. Value for money assessed through benchmarking against similar enterprise software maintenance agreements. 2. Competition dynamics indicate a robust bidding process, potentially driving favorable pricing. 3. Risk indicators monitored for potential performance issues or cost overruns. 4. Performance context evaluated against historical maintenance contract outcomes. 5. Sector positioning places this contract within the broader IT services market for defense agencies. 6. The contract's duration of three years suggests a stable, long-term need for these services.

Value Assessment

Rating: good

The contract value of $19.2 million over three years for IBM enterprise software maintenance appears reasonable when benchmarked against industry standards for similar large-scale software support agreements. GovSmart, Inc.'s pricing will be assessed against market rates for enterprise-level IBM software maintenance, considering factors like the specific software versions, support tiers, and the number of users or instances covered. While specific per-unit cost data is not provided, the overall contract value suggests a significant investment in maintaining critical software infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were allowed to compete, but specific circumstances led to the exclusion of certain sources prior to the final award. The presence of three bidders suggests a competitive environment, which typically encourages more favorable pricing and better service offerings for the government. The level of competition is a positive sign for price discovery and ensuring the government receives a fair market price.

Taxpayer Impact: The full and open competition, even with source exclusions, likely resulted in a more competitive bid landscape, potentially saving taxpayer dollars compared to a sole-source or limited competition scenario.

Public Impact

The Department of Defense is the primary beneficiary, ensuring continued operation of critical IBM enterprise software. Services delivered include maintenance, support, and potential updates for essential IBM software. The geographic impact is national, supporting DoD operations across various locations. Workforce implications include ensuring IT personnel have access to reliable software and support, maintaining operational efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific IBM software versions require proprietary maintenance.
Risk of price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for critical software support could pose operational risks if performance falters.

Positive Signals

Award to GovSmart, Inc. indicates successful competition and selection of a qualified vendor.
The firm-fixed-price contract type provides cost certainty for the government.
A three-year contract duration suggests a stable and predictable support arrangement.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on enterprise software maintenance and support. The IT services market for government contracts is substantial, with significant spending allocated to software licensing, maintenance, and related support to ensure the functionality of critical government systems. Comparable spending benchmarks would involve analyzing other large federal contracts for enterprise software maintenance, particularly for major vendors like IBM, to gauge the relative cost-effectiveness of this award.

Small Business Impact

The data indicates that small business participation was not a primary driver for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. Therefore, the direct impact on the small business ecosystem from this particular award is likely minimal, unless GovSmart, Inc. voluntarily engages small businesses for subcontracting services not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) contracting officers and program managers within the Department of Defense. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
General Services Administration (GSA) IT Schedule Contracts
Department of Defense Software Licensing and Maintenance
Enterprise Resource Planning (ERP) System Support

Risk Flags

Potential for vendor lock-in
Performance risk
Price escalation risk in future renewals

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to GOVSMART, INC.. IBM ENTERPRISE SOFTWARE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is GOVSMART, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $19.2 million.

What is the period of performance?

Start: 2023-09-01. End: 2026-08-31.

What is GovSmart, Inc.'s track record with Department of Defense contracts, particularly for enterprise software maintenance?

Assessing GovSmart, Inc.'s track record with the Department of Defense (DoD) requires a review of their past performance on similar contracts. This would involve examining contract databases for previous awards, performance evaluations, and any reported issues or successes. Specifically, for enterprise software maintenance, understanding their experience with IBM products and the scale of previous support agreements is crucial. A positive history of on-time delivery, adherence to budget, and effective problem resolution would indicate a lower risk for this current contract. Conversely, a history of performance issues, contract disputes, or cost overruns would raise concerns about their capability to fulfill the current $19.2 million agreement effectively over its three-year term.

How does the $19.2 million contract value compare to similar IBM enterprise software maintenance contracts awarded by other federal agencies?

To benchmark the $19.2 million contract value, a comparative analysis with similar IBM enterprise software maintenance contracts awarded by other federal agencies is necessary. This involves identifying contracts with comparable software versions, support levels, contract durations, and the scope of services. For instance, comparing it to a similar 3-year maintenance contract for IBM's database software or middleware awarded to another large IT vendor by agencies like the Department of Veterans Affairs or the General Services Administration would provide context. If this contract's value per year or per supported instance is significantly higher than comparable contracts, it might suggest less favorable pricing or a broader scope of services. Conversely, if it aligns with or is lower than benchmarks, it indicates good value for money.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks associated with this contract include potential vendor lock-in with IBM software, where the government becomes heavily reliant on GovSmart, Inc. for maintenance, potentially limiting future flexibility or negotiation power. Another risk is performance degradation or failure to meet service level agreements (SLAs), which could disrupt critical DoD operations. Price escalation in future renewals is also a concern if competition diminishes. Mitigation strategies typically involve clearly defined SLAs in the contract, performance monitoring by the Defense Logistics Agency (DLA), and contingency planning for software issues. The firm-fixed-price nature of the contract helps mitigate cost overrun risks for the government, provided the scope is well-defined. Regular performance reviews and maintaining open communication channels with the contractor are also key mitigation tactics.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring optimal value for taxpayer dollars in this IT maintenance context?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance broad competition with specific procurement needs. In the context of IT maintenance, it suggests that while the solicitation was open to all responsible sources, certain vendors or solutions were deemed ineligible or unsuitable early in the process. This can be effective if the exclusions are based on legitimate technical requirements, security mandates, or past performance issues, thereby focusing competition on the most capable and appropriate vendors. When three bidders participate, as indicated, it suggests sufficient competition to drive price discovery and encourage favorable terms. However, the effectiveness hinges on the justification for the exclusions; if exclusions were overly restrictive or arbitrary, they could inadvertently limit competition and potentially lead to suboptimal value compared to a truly unrestricted full and open competition.

What is the historical spending pattern for IBM enterprise software maintenance within the Department of Defense?

Analyzing the historical spending pattern for IBM enterprise software maintenance within the Department of Defense (DoD) is crucial for understanding the context of this $19.2 million award. This involves examining past contract awards for similar IBM software maintenance services over several fiscal years. Key metrics to track would include the total annual spending on IBM maintenance, the number of active contracts, the average contract value, and the primary contractors. Understanding trends, such as increasing or decreasing overall spending, shifts in awarded contractors, or significant price fluctuations, can reveal whether this current contract represents a continuation of established patterns, a deviation, or a potential area for cost savings. For example, if historical spending has been significantly higher or lower, it warrants further investigation into the reasons behind the difference.

What are the implications of the 3-year duration (1095 days) for this contract on long-term IT strategy and vendor relationships?

A 3-year duration (1095 days) for this IBM enterprise software maintenance contract has several implications for the DoD's long-term IT strategy and vendor relationships. Firstly, it provides a stable period for maintaining critical software, allowing IT personnel to focus on operations rather than frequent re-procurement cycles. This stability can support consistent service delivery. Secondly, it allows for a deeper working relationship with GovSmart, Inc., potentially leading to better understanding of DoD's specific needs and more tailored support. However, a longer duration also increases the risk of vendor lock-in and may reduce flexibility to adopt newer technologies or switch vendors if better solutions emerge. It necessitates careful contract management to ensure performance remains high and that the government is not locked into outdated technology or unfavorable pricing structures beyond the contract term.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SP470123Q0073

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 715 CHARLTON AVE STE 100, CHARLOTTESVILLE, VA, 22903

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,227,006

Exercised Options: $19,227,006

Current Obligation: $19,227,006

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD11B

IDV Type: GWAC

Timeline