Several industry sources said two Veterans Affairs Department contracts for information technology asset management software and services worth $90 million over 10 years appear to be wired for IBM. VA issued the contract solicitations through NASA’s governmentwide acquisition contract (GWAC).

Industry sources, who requested anonymity because they did not want to damage their relationships with VA, pointed to several unusual decisions the agency has made in the past few months and to specific instances in the agency’s request for proposals to support their suspicions.

Those sources alleged that VA’s decision to use NASA’s Solutions for Enterprisewide Procurement (SEWP) GWAC and to require integration with IBM’s Maximo Software Suite are among the most troubling aspects of the procurement.

Industry sources said IBM is the only vendor on SEWP IV that provides software that easily integrates with the Maximo Software Suite. They also said other resellers in the market could compete on the contract if it were awarded through the General Services Administration’s Federal Supply Schedule or FedBizOpps.gov.

“VA is looking for an agent-based solution as they say in the RFP, and Maximo is the only one” on the Solutions for Enterprisewide Procurement, said an industry executive. “All I’m looking for is full and open competition.”
Industry sources said BDNA, CA and EMC Software are among the vendors that could compete in full and open competition.

A VA spokesperson denied the contract is wired to IBM, and said the agency wants as much competition as possible from SEWP vendors. VA officials in July 2006 mandated all software purchases must go through SEWP, the spokesperson said.

But because IBM is the only vendor on SEWP to provide these services, the industry sources said the procurement is unfair.

The spokesperson said VA is trying to ensure competition. “In addition to requesting information, the RFI affords vendors the opportunity to establish required relationships with resellers to further enhance competition,” the spokesperson said.

Another red flag, industry sources said, is VA’s request for 205,000 software licenses. On IBM’s SEWP listing for Maximo, IBM quotes a price for 205,000 licenses, a price available only to VA.

“When IBM created their SEWP IV offering, isn’t it striking that they had the insight to know that it should be 205,000 assets, and only VA could use it,” said another industry executive. “And then there is an RFI that aligns directly with IBM’s offering. Maybe if I was a little more naive, I would believe it was an accident.”

An IBM official said VA is simply adding new modules to applications VA already uses.

The VA spokesperson said the agency  specifically asked for Maximo because the other applications, including the IT asset management software, will run on IBM’s Maximo.

Under the services contract, which is estimated to be worth $54 million over 10 years, several vendors could provide integration, operation and maintenance support services.

However, several industry sources said VA is trying to direct the procurement to IBM, which according to procurement experts isn’t necessarily illegal.

“Agencies go out of their way consistently to hide the fact that they are buying very large  dollar amounts of goods and services by using indefinite-quantity, indefinite-delivery contracts to limit competition,” said Bill Shook, a procurement attorney at Kirkpatrick & Lockhart Preston Gates Ellis, who is not representing any party in the dispute.