SSA's $36M IBM Mainframe Hardware Upgrade Awarded via BPA Call Under Full and Open Competition

Contract Overview

Contract Amount: $36,095,065 ($36.1M)

Contractor: International Business Machines Corporation

Awarding Agency: Social Security Administration

Start Date: 2011-03-18

End Date: 2016-02-28

Contract Duration: 1,808 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MAINFRAME UPGRADE - HARDWARE INFRASTRUCTURE (HW)

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $36.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MAINFRAME UPGRADE - HARDWARE INFRASTRUCTURE (HW) Key points: 1. The contract awarded to IBM for $36.1M represents a significant investment in critical IT infrastructure. 2. Full and open competition was utilized, suggesting a robust price discovery process. 3. The use of a Blanket Purchase Agreement (BPA) Call indicates a streamlined procurement method for established contracts. 4. The contract duration of 1808 days (approx. 5 years) suggests a long-term need for these hardware components. 5. The absence of small business participation warrants further investigation into contracting opportunities.

Value Assessment

Rating: fair

The $36.1M award for mainframe hardware infrastructure appears to be within a reasonable range for such specialized equipment, especially given the long contract duration. Benchmarking against similar large-scale hardware procurements would provide a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, utilizing a BPA Call. This method generally promotes competitive pricing by allowing multiple vendors to bid, though the specific BPA call may have had pre-qualified vendors. The firm-fixed-price structure helps control costs.

Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing competitive pricing for essential IT infrastructure.

Public Impact

Ensures continued operation of critical Social Security Administration systems reliant on mainframe technology. Supports the agency's ability to process benefits and maintain citizen data. Potential for system performance improvements and enhanced reliability. Highlights the ongoing reliance on legacy mainframe systems within government IT.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation.
Potential for vendor lock-in with IBM for future upgrades.
Aging technology dependence.

Positive Signals

Full and open competition utilized.
Firm-fixed-price contract.
Streamlined procurement via BPA Call.

Sector Analysis

This procurement falls within the Information Technology sector, specifically focusing on hardware infrastructure for mainframe systems. Government spending on IT hardware, particularly for maintaining legacy systems, remains substantial, with benchmarks varying widely based on system scale and technology.

Small Business Impact

The data indicates no small business participation in this contract. This suggests that the procurement may have been structured in a way that favored larger, established vendors, or that the specific hardware required was not readily supplied by small businesses.

Oversight & Accountability

The use of a BPA Call under full and open competition suggests a degree of oversight in the initial BPA establishment. However, ongoing monitoring of performance and cost-effectiveness throughout the contract's five-year duration is crucial for accountability.

Related Government Programs

Computer and Software Stores
Social Security Administration Contracting
Social Security Administration Programs

Risk Flags

Lack of small business participation.
Potential for vendor lock-in.
Dependence on aging mainframe technology.
Long contract duration may not adapt to rapid tech changes.
Limited transparency on specific hardware components and pricing breakdown.

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $36.1 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MAINFRAME UPGRADE - HARDWARE INFRASTRUCTURE (HW)

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

Awarding agency: Social Security Administration (Social Security Administration).

What is the total obligated amount?

The obligated amount is $36.1 million.

What is the period of performance?

Start: 2011-03-18. End: 2016-02-28.

What was the specific justification for using a BPA Call for this mainframe hardware upgrade, and were there opportunities for small businesses within the BPA structure?

The use of a BPA Call likely streamlined the procurement process for the Social Security Administration by leveraging an existing contract vehicle. While full and open competition was used for the BPA's establishment, the specific call might have limited the pool of eligible vendors. Further details on the BPA's structure and any subcontracting provisions would clarify small business opportunities.

How does the $36.1M cost compare to industry benchmarks for similar mainframe hardware infrastructure upgrades of this scale and duration?

Benchmarking this $36.1M expenditure requires detailed comparison with similar large-scale mainframe hardware procurements. Factors like specific IBM model series, required capacity, warranty terms, and the five-year duration significantly influence pricing. Without granular data on comparable contracts, a precise value assessment is challenging, but the firm-fixed-price structure provides cost certainty.

What is the long-term strategy for modernizing the SSA's mainframe infrastructure beyond this hardware upgrade, and what are the associated risks?

This hardware upgrade addresses immediate infrastructure needs but doesn't reveal the SSA's long-term modernization strategy. Continued reliance on mainframes carries risks of increasing maintenance costs, difficulty finding skilled personnel, and potential integration challenges with newer technologies. A clear roadmap for eventual migration or modernization is essential to mitigate these future risks and ensure agility.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

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: $36,095,065

Exercised Options: $36,095,065

Current Obligation: $36,095,065

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SS001140011

IDV Type: BPA

Timeline