Army Audit Readiness Contract Awarded to IBM for $69.7M Amidst Full and Open Competition
Contract Overview
Contract Amount: $69,710,349 ($69.7M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of Defense
Start Date: 2013-04-09
End Date: 2014-11-09
Contract Duration: 579 days
Daily Burn Rate: $120.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ARMY AUDIT READINESS GENERAL FUND
Place of Performance
Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $69.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: ARMY AUDIT READINESS GENERAL FUND Key points: 1. Significant contract value of $69.7 million for audit readiness services. 2. IBM secured the contract through full and open competition, indicating a competitive bidding process. 3. The contract duration of 579 days suggests a substantial project scope. 4. The 'Other Accounting Services' NAICS code points to specialized financial support for the Army.
Value Assessment
Rating: good
The contract was awarded at a fixed price, which is generally favorable for cost control. Benchmarking against similar accounting services contracts is needed for a precise value assessment, but the fixed price suggests a degree of pricing discipline.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting multiple bidders participated. This method typically drives competitive pricing and ensures the government receives fair market value.
Taxpayer Impact: The competitive nature of the award is positive for taxpayers, as it likely resulted in a more efficient use of funds compared to a sole-source procurement.
Public Impact
Enhances the Army's financial accountability and audit readiness. Supports critical government functions by ensuring compliance with financial regulations. IBM's involvement highlights the role of major contractors in supporting federal operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics in the provided data.
- Potential for cost overruns if scope creep occurs, despite fixed price.
- Dependence on a single large contractor for a critical function.
Positive Signals
- Awarded through full and open competition.
- Fixed price contract type can control costs.
- Supports essential government audit readiness.
Sector Analysis
The 'Other Accounting Services' sector involves specialized financial expertise. Government spending in this area is crucial for maintaining financial integrity and compliance. Benchmarks for similar contracts would provide further context on IBM's pricing.
Small Business Impact
The data indicates this contract was awarded to IBM, a large business. There is no indication of small business participation in this specific award, which could be an area for future consideration.
Oversight & Accountability
The contract was awarded under full and open competition, suggesting a transparent process. However, ongoing oversight would be necessary to ensure performance and adherence to the fixed-price terms.
Related Government Programs
- Other Accounting Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Contract awarded to a large business, potentially limiting small business opportunities.
- Duration of contract (579 days) may indicate a complex or long-term need.
- Specific performance metrics and outcomes are not detailed in the provided data.
- Potential for scope creep, even with a fixed-price contract, if not managed tightly.
Tags
other-accounting-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.7 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. ARMY AUDIT READINESS GENERAL FUND
Who is the contractor on this award?
The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $69.7 million.
What is the period of performance?
Start: 2013-04-09. End: 2014-11-09.
What specific audit readiness challenges did the Army face that necessitated this contract?
The Army, like many large federal agencies, has historically faced significant challenges in achieving full audit readiness due to the complexity of its financial systems and vast asset inventory. This contract likely aimed to leverage external expertise to address specific deficiencies identified in previous audits or internal reviews, focusing on improving financial reporting accuracy and compliance with federal accounting standards.
How does the $69.7 million cost compare to industry benchmarks for similar audit readiness services?
Without specific details on the scope of services provided, a direct benchmark is difficult. However, $69.7 million for a nearly two-year engagement with a major contractor like IBM suggests a significant undertaking. Industry benchmarks for large-scale federal audit readiness support often range from tens to hundreds of millions of dollars, depending on the agency's size, complexity, and the specific services required, such as financial statement preparation, internal control testing, and remediation.
What are the potential risks associated with relying on IBM for this critical function?
Potential risks include over-reliance on a single contractor, leading to a loss of internal expertise. There's also a risk of vendor lock-in and potential cost increases if the contract needs extensions or modifications. Furthermore, the effectiveness of the audit readiness improvements hinges on IBM's ability to deliver as promised and integrate with existing Army systems and personnel.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $73,356,911
Exercised Options: $69,710,349
Current Obligation: $69,710,349
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS23F8126H
IDV Type: FSS
Timeline
Start Date: 2013-04-09
Current End Date: 2014-11-09
Potential End Date: 2015-01-09 00:00:00
Last Modified: 2021-12-09
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