IBM, Dell Win Places in $494 Million Pentagon IT Contract

The U.S. Department of Defense wrapped up the workweek Friday with the announcement of nine new contracts, worth more than $791 million in total. One single contract, however, accounted for fully 62% of the funds on offer.

The winners of that contract, a $494 million firm-fixed-price, multiple-award, task-order contract for the supply of hardware, software, and related integration services needed for the U.S. Army's "Information Technology Enterprise Solution-2" (ITES-2S) enterprise business systems project, include:

  • Dell's (UNKNOWN: DELL.DL  ) Federal Systems business
  • International Business Machines (NYSE: IBM  )
  • And four privately owned companies -- Unicom Government, CDW Government, Iron Bow Technologies, and World Wide Technology.

The specific type of contract being awarded is best described as an "umbrella" contract, setting a maximum amount of funds that can be spent (the $494 million). Dell, IBM, and the other contract winners will now need to bid against each other to sell the Army equipment and software in response to specific task orders, up until said ceiling value has been reached.


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 20, 2013, at 12:16 AM, applefan1 wrote:

    That sounds like a BS contract. They STILL have to bid against one another? Firm fixed price? What does THAT mean? Sounds like a dumb way to waste money on red tape. IBM doesn't make laptops, desktops like they used to and Dell doesn't make mainframes like IBM does. How stupid.

    These contracts should be arranged so it eliminates the constant bidding wars since that only leads to problems. Lowest bidder wins doesn't mean it's the best solution.

Add your comment.

DocumentId: 2547110, ~/Articles/ArticleHandler.aspx, 7/29/2014 9:02:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASD 4,442.70 -2.21 -0.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
IBM $194.57 Down -1.21 -0.62%
International Busi… CAPS Rating: ****

Advertisement