SSA Spends $31M on IBM Mainframe Hardware Upgrade, Lacking Small Business Participation
Contract Overview
Contract Amount: $30,971,128 ($31.0M)
Contractor: International Business Machines Corporation
Awarding Agency: Social Security Administration
Start Date: 2012-06-01
End Date: 2016-02-28
Contract Duration: 1,367 days
Daily Burn Rate: $22.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SS00-11-40011 IBM MAINFRAME HARDWARE - UPGRADE OF EXISTING EQUIPMENT
Place of Performance
Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21235
State: Maryland Government Spending
Plain-Language Summary
Social Security Administration obligated $31.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: SS00-11-40011 IBM MAINFRAME HARDWARE - UPGRADE OF EXISTING EQUIPMENT Key points: 1. Significant expenditure on essential mainframe hardware for SSA operations. 2. Solely awarded to IBM, indicating a lack of broader market competition. 3. No small business participation noted in this large contract. 4. The contract duration was substantial, spanning over three years.
Value Assessment
Rating: fair
The $31 million cost for mainframe hardware upgrades appears substantial. Benchmarking against similar large-scale IBM hardware procurements is difficult without more specific component details, but the price seems in line with high-end enterprise solutions.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as full and open competition, the award went to IBM for their specific mainframe hardware. This suggests that while the opportunity was advertised broadly, the nature of proprietary hardware likely limited actual bidders to those capable of supplying or servicing IBM systems.
Taxpayer Impact: Taxpayer funds were used for this significant hardware acquisition. The lack of demonstrated competition, despite the 'full and open' designation, raises questions about achieving the best possible price for the government.
Public Impact
Ensures continued operation of critical Social Security Administration systems. Supports the infrastructure necessary for processing benefits and services. Potential for vendor lock-in with proprietary IBM hardware. Lack of small business involvement limits economic opportunities for smaller firms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation
- Potential for limited competition due to proprietary hardware
Positive Signals
- Essential hardware for agency operations
- Awarded via BPA Call, potentially streamlining procurement
Sector Analysis
This contract falls within the IT hardware sector, specifically focusing on mainframe systems. Spending on mainframe hardware can be significant for large government agencies like the SSA, which rely on these robust systems for critical operations. Benchmarks are difficult without specific hardware models.
Small Business Impact
This contract did not include any small business participation. Given the scale and nature of mainframe hardware, it's possible that opportunities for small businesses were limited, or that specific set-aside goals were not met.
Oversight & Accountability
The contract was awarded via a BPA Call, suggesting it may have been part of a pre-negotiated agreement. Further oversight would involve reviewing the original BPA and ensuring compliance with its terms and conditions, as well as the agency's procurement policies.
Related Government Programs
- Computer and Software Stores
- Social Security Administration Contracting
- Social Security Administration Programs
Risk Flags
- Lack of small business participation
- Potential for limited competition due to proprietary nature of hardware
- Significant expenditure without clear competitive advantage demonstrated
- Long contract duration may indicate inflexibility
Tags
computer-and-software-stores, social-security-administration, md, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Social Security Administration awarded $31.0 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. SS00-11-40011 IBM MAINFRAME HARDWARE - UPGRADE OF EXISTING EQUIPMENT
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 $31.0 million.
What is the period of performance?
Start: 2012-06-01. End: 2016-02-28.
What was the specific justification for awarding this to IBM if competition was limited by proprietary hardware?
The justification likely stems from the SSA's existing infrastructure and the need for compatibility with their current IBM mainframe environment. Replacing or integrating non-IBM hardware could be prohibitively complex and costly, leading to a de facto sole-source situation even under a full and open solicitation.
How does the $31 million cost compare to industry benchmarks for similar mainframe hardware upgrades?
Without specific model numbers and configurations, a precise benchmark is challenging. However, large-scale mainframe hardware, especially from established vendors like IBM, represents a significant capital investment. The cost appears consistent with enterprise-level solutions, but a detailed analysis of the components and their pricing relative to market rates would be needed for a definitive assessment.
What is the long-term strategy for managing mainframe hardware costs and competition at the SSA?
The SSA's long-term strategy should focus on evaluating the total cost of ownership for their mainframe environment, including maintenance, upgrades, and potential migration paths. Exploring opportunities for competitive sourcing of maintenance or third-party support, and assessing cloud or alternative computing solutions could mitigate future costs and increase flexibility.
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 DRIVE, BETHESDA, MD, 20817
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,971,128
Exercised Options: $30,971,128
Current Obligation: $30,971,128
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SS001140011
IDV Type: BPA
Timeline
Start Date: 2012-06-01
Current End Date: 2016-02-28
Potential End Date: 2016-02-28 00:00:00
Last Modified: 2021-12-03
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