IBM's indirect costs would consist of three aspects pertaining mainly to time, fraud and unexpected occurrences. The first indirect cost of time creates large expenses with IBM. The larger each individual employee takes to complete his task, the more expensive the services rendered by IBM become. This is because the contract has a set time frame. If the time frame for the contract is exceeded, IBM will incur a bulk to the expenses related to such inefficiencies. This could potentially reduce the overall return of the project. Fraud can also occur as employees could utilize technology or knowledge of the data centers to use for their own personal use. This could include selling the information to foreign entities or IBM's direct competitors. The employee could also retain the information to commit personal acts of fraud against the United States such as hacking the system. Finally, undoubtedly with projects of this scope, unexpected events will occur. Employees can become sick, the data centers can malfunction, and the delivery and quality of service can be compromised. As such, the costs associated with such events can be tremendous. Key personnel suddenly becoming ill can have an adverse effect...
These occurrences are unexpected as there is no physical way to alleviate illness related absence. These absences of key personal increase costs as work will not get done as efficiently or in the manner in which the government specifies. This creates problems as the individual must now correct mistakes made in his absence while also getting the project back on track in regards to time.
