Treasury's IRS awards $38.3M contract to IBM for Integrated Financial System, impacting critical functions
Contract Overview
Contract Amount: $38,349,104 ($38.3M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of the Treasury
Start Date: 2013-09-25
End Date: 2019-03-23
Contract Duration: 2,005 days
Daily Burn Rate: $19.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - INTEGRATED FINANCIAL SYSTEM
Place of Performance
Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $38.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - INTEGRATED FINANCIAL SYSTEM Key points: 1. IBM secured a significant contract valued at $38.3 million for essential financial system services. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (2013-2019) indicates a long-term need for these critical financial functions. 4. The sector is IT services, specifically 'Other Computer Related Services', a common area for government spending.
Value Assessment
Rating: good
The contract's fixed-price nature provides cost certainty for the government. Benchmarking against similar large-scale IT system contracts is difficult without more granular data on scope and deliverables.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Awarded under full and open competition, this method likely fostered competitive pricing. The use of a delivery order suggests it was part of a larger indefinite-delivery contract vehicle.
Taxpayer Impact: The competitive award aims to ensure taxpayer funds are used efficiently for essential government IT infrastructure.
Public Impact
Ensures continuity of critical financial operations for the IRS. Supports the modernization and maintenance of vital government financial systems. Impacts taxpayers through the reliable functioning of tax administration systems. IBM's role highlights the reliance on large IT contractors for government services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to scope creep or evolving needs.
- Reliance on a single vendor (IBM) for critical functions.
- Potential for cost overruns if not managed tightly, despite fixed price.
Positive Signals
- Awarded through full and open competition.
- Firm fixed price contract provides cost predictability.
- Supports critical government financial infrastructure.
Sector Analysis
This contract falls within the Information Technology sector, specifically 'Other Computer Related Services'. Government spending in this area is substantial, focusing on system development, integration, and maintenance to support agency operations.
Small Business Impact
The contract was awarded to International Business Machines Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The contract was awarded under a delivery order, suggesting it might be part of a broader contract vehicle that is subject to oversight. Further review of the parent contract would be needed to assess specific oversight mechanisms.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Long contract duration (6 years).
- Sole large business awardee.
- Critical function reliance.
- Potential for vendor lock-in.
- Lack of explicit small business participation.
Tags
other-computer-related-services, department-of-the-treasury, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $38.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::CT::IGF FOR CRITICAL FUNCTIONS - INTEGRATED FINANCIAL SYSTEM
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 Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $38.3 million.
What is the period of performance?
Start: 2013-09-25. End: 2019-03-23.
What specific functionalities does the Integrated Financial System support for the IRS, and how critical are they to its operations?
The Integrated Financial System (IGF) likely supports core financial management processes for the IRS, including accounting, budgeting, and financial reporting. Its criticality stems from ensuring accurate tax collection, fund disbursement, and compliance with federal financial regulations. Disruptions could severely impact the agency's ability to function and fulfill its mission.
Given the long duration and fixed-price nature, what mechanisms were in place to manage potential cost increases or scope creep?
While a firm fixed price aims to cap costs, long-term contracts require robust contract management. Mechanisms likely included detailed statement of work, regular performance reviews, change control processes for any scope modifications, and potentially incentive clauses. Effective oversight by the Department of the Treasury's IRS would be crucial to prevent uncontrolled scope expansion.
How does the reliance on IBM for this critical system impact the IRS's long-term IT strategy and potential for vendor lock-in?
Reliance on a single large vendor like IBM for critical systems can lead to vendor lock-in, making future transitions difficult and potentially costly. The IRS's long-term IT strategy should ideally incorporate plans for system modernization, diversification of vendors, and ensuring knowledge transfer to mitigate risks associated with deep reliance on one provider.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: RTCP # 4025
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $41,735,184
Exercised Options: $41,735,184
Current Obligation: $38,349,104
Actual Outlays: $0
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $53,668
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TIRNO11D00022
IDV Type: IDC
Timeline
Start Date: 2013-09-25
Current End Date: 2019-03-23
Potential End Date: 2019-03-23 09:28:30
Last Modified: 2020-08-28
More Contracts from International Business Machines Corporation
- Navy Enterprise Resource Planning (ERP) Technical Support Services (netss) — $837.8M (Department of Defense)
- This Requirement IS for the Creation, Maintenance, Enforcement, Analysis and Updates of the Standards and Governance Established by the Current DTC and Provide Technical and Operational Support to the DTC for Saas, Paas, and Emerging Technologies — $621.7M (Department of Veterans Affairs)
- Eadis Software Development — $580.5M (Department of Homeland Security)
- THE Government Intends to Establish a Single-Award Delivery Order Base Plus Four 1year Option Periods for the Renewal of IBM Software Maintenance and the Purchase of More Additional IBM Software Licenses Against the General Services Administrations Federal Supply Schedule Program. Previous Order SS00-15-30081 — $525.4M (Social Security Administration)
- Uscis Transformation Program Solutions Architect (SA) — $376.3M (Department of Homeland Security)
View all International Business Machines Corporation federal contracts →
Other Department of the Treasury Contracts
- Advertising Services — $636.5M (True North Communications Inc)
- Cade 2 Ltis3 Covid-19 — $383.8M (Deloitte Consulting LLP)
- Establish a Broad Networking and Telecommunications Service Environment to Meet ITS Network Services (wide Area and Local Area Network), Voice Telecommunications Services, Audio/Video/Web Conferencing, and Cyber Requirements — $320.2M (AT&T Enterprises, LLC)
- THE Internal Revenue Service (IRS), Office of Information Technology Office, Issues This Order Under GSA Alliant 2 (unrestricted). Enterprise Case Management (ECM) Solution Integration Services — $305.5M (Booz Allen Hamilton Inc)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Verizon Business Network Services LLC)