Treasury's $35M IBM software maintenance contract awarded to IMMIX TECHNOLOGY INC shows fair value

Contract Overview

Contract Amount: $35,178,117 ($35.2M)

Contractor: Immixtechnology Inc

Awarding Agency: Department of the Treasury

Start Date: 2010-12-30

End Date: 2014-12-30

Contract Duration: 1,461 days

Daily Burn Rate: $24.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM (SRO) SOFTWARE MAINTENANCE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20227, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $35.2 million to IMMIXTECHNOLOGY INC for work described as: IBM (SRO) SOFTWARE MAINTENANCE Key points: 1. The contract represents a significant investment in essential IT infrastructure for the Bureau of the Fiscal Service. 2. Competition dynamics suggest a potentially competitive bidding process, though specific details are limited. 3. Risk indicators appear low given the nature of software maintenance, but performance monitoring is key. 4. The contract's duration and fixed-price nature provide cost predictability. 5. This spending falls within the broader IT services sector, supporting critical government operations.

Value Assessment

Rating: good

The contract value of approximately $35.18 million over four years for IBM software maintenance appears reasonable when benchmarked against similar IT service contracts. While specific pricing details are not provided, the fixed-price structure suggests a degree of cost control. The award to IMMIX TECHNOLOGY INC, a known IT solutions provider, indicates a potentially competitive selection process. Further analysis would benefit from comparing the per-unit cost of licenses or support hours against industry averages.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of two bidders suggests a moderately competitive environment. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing. However, without knowing the number of proposals received or the evaluation criteria, it's difficult to definitively assess the intensity of the competition.

Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by driving down prices and encouraging innovation among bidders.

Public Impact

Federal employees within the Bureau of the Fiscal Service benefit from reliable access to critical IBM software. Essential financial management and reporting services are maintained, supporting the Treasury's core mission. The contract's impact is primarily national, ensuring the stability of federal financial systems. IT professionals employed by IMMIX TECHNOLOGY INC and potentially subcontractors are involved in delivering these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with specialized IBM software maintenance.
Reliance on a single contractor for critical IT infrastructure support.
Ensuring continued service quality and responsiveness throughout the contract term.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Fixed-price contract provides budget certainty for the agency.
Contractor has a track record in providing IT solutions.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software maintenance and support. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and upgrading federal systems. Comparable spending benchmarks for enterprise software maintenance contracts of this size can vary widely depending on the software vendor, complexity, and support levels required. This contract supports the Bureau of the Fiscal Service's need for reliable IT infrastructure.

Small Business Impact

The contract was not set aside for small businesses, and the awardee, IMMIX TECHNOLOGY INC, is not a small business. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary focus was on securing the necessary IT support, and opportunities for small business participation may be limited unless they are direct subcontractors to the prime awardee.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of the Fiscal Service's contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Information Technology, Infrastructure, and Cloud Computing Services
Software Licensing and Support Services
IT Operations and Maintenance Contracts
Department of the Treasury IT Spending

Risk Flags

Potential for cost increases if contract scope changes.
Reliance on a single vendor for critical software support.
Ensuring adequate performance and responsiveness from the contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $35.2 million to IMMIXTECHNOLOGY INC. IBM (SRO) SOFTWARE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is IMMIXTECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $35.2 million.

What is the period of performance?

Start: 2010-12-30. End: 2014-12-30.

What is IMMIX TECHNOLOGY INC's track record with federal contracts, particularly for software maintenance?

IMMIX TECHNOLOGY INC has a history of receiving federal contracts, primarily in the IT services domain. While specific details on their performance for IBM software maintenance under this particular Treasury contract are not publicly detailed in the provided data, their sustained engagement with government agencies suggests a capacity to meet contractual obligations. Analyzing past performance reviews and contract modifications for IMMIX TECHNOLOGY INC across various agencies would provide a more comprehensive understanding of their reliability and expertise in delivering similar IT support services. Their ability to secure this contract, awarded under full and open competition, also implies a level of qualification recognized by the government.

How does the value of this contract compare to similar IBM software maintenance contracts awarded by other federal agencies?

Benchmarking this $35.18 million contract against similar IBM software maintenance agreements requires access to a broader dataset of federal procurements. Factors such as the specific IBM software product, the level of support required (e.g., 24/7 critical support vs. standard business hours), the number of users or systems covered, and the contract duration significantly influence pricing. Generally, larger, multi-year contracts for enterprise-level software maintenance can run into millions of dollars. Without specific details on the scope and service levels of comparable contracts, a precise value comparison is challenging. However, the fixed-price nature of this award suggests an effort by the Bureau of the Fiscal Service to manage costs predictably.

What are the primary risks associated with a long-term software maintenance contract like this, and how are they mitigated?

Key risks include potential cost overruns if the scope of work expands unexpectedly (though mitigated by the fixed-price structure), vendor lock-in making it difficult to switch software or providers, and performance degradation if the contractor fails to deliver adequate support. Mitigation strategies often involve clearly defined service level agreements (SLAs), performance metrics, regular contract reviews, and contingency planning for potential service disruptions. The government also retains the option to not renew or to re-compete the contract at its expiration. For this specific contract, the fixed-price nature and the competitive award process aim to control costs and ensure a baseline level of service quality.

How effective has the Bureau of the Fiscal Service been in managing its IT contracts, and does this contract align with broader IT modernization goals?

Assessing the overall effectiveness of the Bureau of the Fiscal Service's IT contract management requires a review of their procurement history, audit reports, and program outcomes. This specific contract for IBM software maintenance, awarded in 2010 and ending in 2014, predates many current IT modernization initiatives focused on cloud adoption and agile development. While maintaining existing infrastructure is crucial, the long-term strategy likely involves evaluating whether such maintenance contracts align with evolving technological landscapes and agency modernization objectives. The agency's ability to secure this contract through full and open competition suggests a standard procurement process was followed, but its alignment with forward-looking IT goals would depend on the agency's strategic IT roadmap.

What has been the historical spending trend for IBM software maintenance by the Department of the Treasury or its bureaus?

Analyzing historical spending trends for IBM software maintenance by the Department of the Treasury requires aggregating data across multiple contracts and fiscal years. This $35.18 million contract represents a significant portion of spending within a specific period (2010-2014) for the Bureau of the Fiscal Service. To understand the broader trend, one would need to examine prior and subsequent contracts for similar services, potentially including other IBM software products or different support providers. Factors influencing spending include the size and complexity of the Treasury's IT infrastructure, the lifecycle of the software being supported, and the agency's budget allocations for IT maintenance over time.

Industry Classification

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

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arrow Electronics, Inc. (UEI: 049159957)

Address: 8444 WESTPARK DR STE 200, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $35,178,117

Exercised Options: $35,178,117

Current Obligation: $35,178,117

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $123,983

Parent Contract

Parent Award PIID: NNG07DA64B

IDV Type: GWAC

Timeline