IBM Software Maintenance contract awarded to IMMIX TECHNOLOGY INC for over $22.6M

Contract Overview

Contract Amount: $22,649,646 ($22.6M)

Contractor: Immixtechnology Inc

Awarding Agency: Department of the Treasury

Start Date: 2011-10-01

End Date: 2015-06-30

Contract Duration: 1,368 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM SW MAINTENANCE

Place of Performance

Location: ARMONK, WESTCHESTER County, NEW YORK, 10504, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $22.6 million to IMMIXTECHNOLOGY INC for work described as: IBM SW MAINTENANCE Key points: 1. Value for money appears fair given the duration and scope of software maintenance. 2. Competition was conducted under 'full and open competition after exclusion of sources', suggesting a potentially limited but justified bidding process. 3. Risk indicators are moderate, with a fixed-price contract type mitigating some cost overrun risks. 4. Performance context is for essential IT services supporting the Bureau of the Fiscal Service. 5. Sector positioning is within IT services, specifically software maintenance for government operations.

Value Assessment

Rating: fair

The contract value of $22.6 million over approximately 3.75 years for IBM software maintenance suggests a significant investment. Benchmarking this against similar large-scale government software maintenance contracts is difficult without more specific service details. However, the firm fixed-price nature indicates that the price was set upfront, which can be advantageous if the scope is well-defined. The value proposition hinges on the criticality of the IBM software and the efficiency of the maintenance services provided by IMMIX TECHNOLOGY INC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources'. This indicates that while the competition was intended to be open, specific sources may have been excluded for justifiable reasons, possibly related to specialized knowledge or existing infrastructure. The number of bidders is not specified, but this award type suggests that multiple vendors had the opportunity to bid, leading to some level of price discovery.

Taxpayer Impact: This competition type aims to ensure fair pricing for taxpayers by allowing multiple vendors to compete, even if some initial exclusions were made.

Public Impact

The Bureau of the Fiscal Service benefits from continued access to and support for critical IBM software. Essential IT services are maintained, ensuring the operational continuity of financial management functions within the Treasury. The geographic impact is primarily within the federal government's IT infrastructure, supporting national financial operations. Workforce implications are likely related to the IT support staff managing and utilizing the maintained software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the specific IBM software is proprietary and requires specialized maintenance.
Dependence on a single contractor for critical software support could pose a risk if performance falters.
The 'exclusion of sources' clause warrants scrutiny to ensure it did not unduly limit competition.

Positive Signals

Firm fixed-price contract helps control costs and provides budget certainty.
Award to a single contractor for a defined period suggests a potentially streamlined and efficient service delivery model.
The contract duration implies a stable, long-term need for these services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software maintenance and support. The market for government IT services, including software maintenance for enterprise-level applications like those from IBM, is substantial. This contract represents a portion of the broader federal spending on IT modernization and operational support, where vendors compete on price, technical expertise, and service delivery capabilities.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary consideration for this specific contract award. There is no indication of small business set-asides or subcontracting requirements. This suggests the contract was likely awarded based on technical capability and price, with larger firms or those with specific expertise in IBM software maintenance being the primary bidders.

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 firm fixed-price contract terms, requiring delivery of specified maintenance services. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal IT Services Contracts
Software Licensing and Maintenance
Department of the Treasury IT Spending
Bureau of the Fiscal Service Operations
IBM Software Support

Risk Flags

Potential for limited competition due to 'exclusion of sources' clause.
Dependence on a single contractor for critical software maintenance.
Lack of detailed performance metrics in the provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $22.6 million to IMMIXTECHNOLOGY INC. IBM SW 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 $22.6 million.

What is the period of performance?

Start: 2011-10-01. End: 2015-06-30.

What is the track record of IMMIX TECHNOLOGY INC in providing similar IBM software maintenance services to the federal government?

Assessing IMMIX TECHNOLOGY INC's track record requires a deeper dive into their past performance on federal contracts, particularly those involving IBM software maintenance. While this specific contract award indicates they were selected, understanding their success rate, client satisfaction, and any past performance issues on similar engagements is crucial. Information from sources like the Contractor Performance Assessment Reporting System (CPARS) would provide valuable insights into their reliability, technical proficiency, and adherence to contract terms. Without this detailed performance history, it's difficult to fully gauge their capability beyond this single award.

How does the per-year cost of this contract compare to industry benchmarks for IBM software maintenance?

The contract's total value of approximately $22.6 million over 1368 days (roughly 3.75 years) equates to an average annual cost of about $6 million. To benchmark this against industry standards for IBM software maintenance, one would need to know the specific IBM software products covered, the level of support required (e.g., 24/7, standard business hours), and the number of users or instances. Government contracts often include overhead and administrative costs that can differ from commercial rates. A comprehensive comparison would involve analyzing pricing data for similar IBM software maintenance agreements in both the public and private sectors, considering factors like volume discounts and service level agreements.

What specific risks are associated with relying on IMMIX TECHNOLOGY INC for this critical software maintenance?

Key risks associated with relying on IMMIX TECHNOLOGY INC include potential performance deficiencies, such as delayed response times or inadequate resolution of software issues, which could disrupt the Bureau of the Fiscal Service's operations. There's also a risk of cost escalation if the firm fixed-price contract doesn't adequately account for unforeseen complexities or if change orders become necessary. Vendor lock-in is another concern; if IMMIX TECHNOLOGY INC becomes the sole provider of expertise for this specific IBM software, transitioning to another vendor in the future could be costly and time-consuming. Furthermore, the 'exclusion of sources' in the competition method warrants scrutiny to ensure it didn't limit the pool of qualified vendors, potentially impacting the quality of service or price.

How effective has the Bureau of the Fiscal Service been in managing similar IT maintenance contracts in the past?

Evaluating the effectiveness of the Bureau of the Fiscal Service's management of similar IT maintenance contracts requires analyzing historical data on contract performance, cost overruns, and user satisfaction. Their ability to define clear requirements, monitor vendor performance against service level agreements, and manage contract modifications appropriately are key indicators. Past performance reviews, IG reports, or GAO audits related to the Bureau's IT procurement and management practices would offer insights. A consistent pattern of successful contract execution suggests effective management, while recurring issues might point to areas needing improvement in their oversight capabilities.

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

Analyzing historical spending trends for IBM software maintenance by the Department of the Treasury would involve examining contract data over several fiscal years. This would reveal whether spending on such services has been increasing, decreasing, or remaining relatively stable. Understanding these trends can help identify patterns in IT investment, potential shifts in software reliance, or the impact of technology refresh cycles. It also provides context for the current $22.6 million award, indicating whether it represents a typical expenditure or a significant deviation from past spending levels for similar services.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

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

Financial Breakdown

Contract Ceiling: $22,649,646

Exercised Options: $22,649,646

Current Obligation: $22,649,646

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $346,617

Parent Contract

Parent Award PIID: NNG07DA20B

IDV Type: GWAC

Timeline