PBGC awards $1.55M to WMATA for automated smart benefits system access

Contract Overview

Contract Amount: $1,550,407 ($1.6M)

Contractor: Washington Metropolitan Area Transit Authority

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2024-04-11

End Date: 2029-04-24

Contract Duration: 1,839 days

Daily Burn Rate: $843/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: THIS AWARD IS MADE TO THE WASHINGTON METROPOLITAN TRANSIT AUTHORITY (WMATA) TO PROVIDE ACCESS TO THE WMATA AUTOMATED SMART BENEFITS SYSTEM.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $1.6 million to WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY for work described as: THIS AWARD IS MADE TO THE WASHINGTON METROPOLITAN TRANSIT AUTHORITY (WMATA) TO PROVIDE ACCESS TO THE WMATA AUTOMATED SMART BENEFITS SYSTEM. Key points: 1. Contract provides access to an existing system, suggesting potential for cost savings if leveraged effectively. 2. The sole-source nature of this award warrants scrutiny regarding the necessity and justification for not seeking competitive bids. 3. A long performance period of over 5 years may introduce risks related to system obsolescence or changing user needs. 4. The contract is a purchase order, typically used for simpler, less complex acquisitions. 5. The fixed-price with economic price adjustment structure aims to mitigate inflation risk for the contractor. 6. This award represents a small portion of the Pension Benefit Guaranty Corporation's overall spending.

Value Assessment

Rating: fair

The contract value of $1.55 million over approximately five years for access to an automated benefits system appears reasonable on its face, but a direct comparison is difficult without knowing the specifics of the system's capabilities and the user base. Given it's a sole-source award to an existing entity (WMATA), the pricing is likely based on their internal cost structure and established rates. Benchmarking value would require understanding the cost of developing or accessing a similar system independently or through other means, which is not readily available from the provided data. The economic price adjustment clause introduces a variable that could increase the final cost over the contract's duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Pension Benefit Guaranty Corporation (PBGC) did not solicit bids from multiple vendors. This approach is typically justified when only one vendor can provide the required goods or services, often due to proprietary technology, existing infrastructure, or unique capabilities. The lack of competition means that price discovery through market forces was bypassed, and the PBGC relied on negotiation and justification of WMATA's proposed pricing.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium compared to a competitively bid contract. Without competing offers, it is harder to ensure the government is receiving the best possible price for the services rendered.

Public Impact

The primary beneficiaries are likely employees or members of the Pension Benefit Guaranty Corporation who will utilize the automated smart benefits system. The service delivered is access to an existing system, facilitating administrative processes related to benefits. The geographic impact is centered around the Washington Metropolitan Area, where WMATA operates. Workforce implications are minimal, as this contract primarily provides system access rather than direct employment generation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to higher costs for taxpayers.
Long contract duration (over 5 years) increases risk of system obsolescence or changing needs.
Economic price adjustment clause introduces uncertainty in final cost due to potential inflation.
Lack of detailed system functionality description makes it difficult to assess true value for money.

Positive Signals

Leverages an existing, presumably functional, automated system, avoiding development costs.
Provides continuity of service for benefits administration.
Fixed-price component provides some cost certainty for the base service.
Award to a known entity (WMATA) may imply a degree of familiarity and established working relationship.

Sector Analysis

This contract falls within the broader category of IT services and administrative support, specifically related to benefits management. The market for such systems can vary widely, from off-the-shelf software solutions to highly customized platforms. Given the award to a transit authority for access to their system, it suggests a specialized or internally developed solution rather than a widely marketed commercial product. Comparable spending benchmarks are difficult to establish without more information on the system's scope and user base, but IT system access contracts can range from thousands to millions of dollars depending on complexity and user volume.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'ss: false' and 'sb: false'. There is no information provided regarding subcontracting plans or implications for the small business ecosystem. The award is made directly to a large transit authority, suggesting that small businesses are unlikely to be directly involved as prime contractors or significant subcontractors in this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Pension Benefit Guaranty Corporation's contracting and program management offices. As a purchase order, it may have less formal oversight than a complex service contract. Accountability measures would be tied to the terms and conditions of the purchase order, including delivery of access and system uptime. Transparency is limited by the sole-source nature and the lack of detailed public information on the system's performance metrics. There is no explicit mention of Inspector General jurisdiction, though the PBGC IG typically has broad oversight over agency activities.

Related Government Programs

Pension Administration Systems
Benefits Management Software
Government IT Services
Automated Systems Access
Transit Authority IT Contracts

Risk Flags

Sole-source award
Long contract duration
Economic price adjustment

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $1.6 million to WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY. THIS AWARD IS MADE TO THE WASHINGTON METROPOLITAN TRANSIT AUTHORITY (WMATA) TO PROVIDE ACCESS TO THE WMATA AUTOMATED SMART BENEFITS SYSTEM.

Who is the contractor on this award?

The obligated recipient is WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY.

Which agency awarded this contract?

Awarding agency: Pension Benefit Guaranty Corporation (Pension Benefit Guaranty Corporation).

What is the total obligated amount?

The obligated amount is $1.6 million.

What is the period of performance?

Start: 2024-04-11. End: 2029-04-24.

What is the specific functionality and scope of the WMATA Automated Smart Benefits System being accessed by the PBGC?

The provided data indicates the contract is for 'access to the WMATA Automated Smart Benefits System.' However, the specific functionalities, scope, and user base of this system are not detailed. It is unclear if this system manages retirement benefits, health benefits, or other types of employee benefits for WMATA, or if it is a platform that PBGC is utilizing for its own internal benefit administration processes, potentially by integrating with WMATA's data or systems. Without this information, it is challenging to fully assess the value, necessity, and appropriateness of the $1.55 million award over five years. Further details would be needed to understand if the system's capabilities align with PBGC's requirements and if alternative solutions could offer similar or better functionality at a lower cost.

What is the justification for awarding this contract on a sole-source basis to WMATA?

The contract was awarded on a sole-source basis, meaning competitive bidding was not pursued. Justification for sole-source awards typically includes situations where only one responsible source can provide the required supply or service. For this contract, the justification likely stems from WMATA possessing a unique, proprietary, or already established system that the PBGC needs to access. This could be due to existing inter-agency agreements, specific technical integrations already in place, or the system being tailored to unique requirements that only WMATA can fulfill. Without explicit documentation from the PBGC detailing this justification, it remains an assumption based on common sole-source rationales. The lack of competition raises concerns about whether the PBGC secured the best possible price and terms.

How does the $1.55 million contract value compare to similar systems or services in the market?

Benchmarking the $1.55 million contract value is difficult without more specific information about the WMATA Automated Smart Benefits System's capabilities and the scope of access being provided. If this system is a sophisticated platform managing complex benefits data for a large user base, the cost might be reasonable. However, if it's a more basic system or provides limited access, the price could be high, especially considering it's a sole-source award. Typical government contracts for benefits administration software or system access can vary significantly. For instance, cloud-based HR and benefits platforms can range from a few dollars per employee per month to hundreds of dollars per employee annually, depending on features. A fixed price of $1.55 million over approximately five years ($310,000 annually) would need to be evaluated against the number of users and the specific services rendered to determine true market value.

What are the potential risks associated with the long contract duration (over 5 years) and the economic price adjustment clause?

The contract duration of approximately five years (1839 days) presents several risks. Firstly, technology evolves rapidly; a system accessed today might become outdated or less efficient within five years, potentially requiring costly upgrades or replacements. Secondly, the needs and priorities of the PBGC could change over this period, making the accessed system less relevant or requiring modifications that are not covered. The inclusion of an Economic Price Adjustment (EPA) clause introduces financial risk. While it protects the contractor from unforeseen inflation, it means the total cost to the PBGC is not fixed and could increase significantly if inflation rates are high during the contract period. This uncertainty makes long-term budget planning more challenging for the agency.

What is the historical spending pattern of the Pension Benefit Guaranty Corporation on similar IT or benefits administration services?

The provided data does not include historical spending patterns for the Pension Benefit Guaranty Corporation (PBGC) on similar IT or benefits administration services. To assess this specific award effectively, understanding PBGC's past investments in such systems would be crucial. For example, have they previously contracted for similar access, developed in-house solutions, or purchased off-the-shelf software? Knowing the typical cost range and contract types PBGC has engaged in for benefits administration would provide context for the current $1.55 million award. Without this historical perspective, it's difficult to determine if this contract represents a significant increase or decrease in spending, or if it aligns with previous procurement strategies and cost efficiencies.

Industry Classification

NAICS: Transportation and Warehousing › Urban Transit Systems › Mixed Mode Transit Systems

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › OTHER TRANSPORT, TRAVEL, RELOCAT SV

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 300 7TH ST SW, WASHINGTON, DC, 20024

Business Categories: U.S. Government Authorities, Category Business, Government, U.S. National Government, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $4,140,750

Exercised Options: $1,550,407

Current Obligation: $1,550,407

Actual Outlays: $793,555

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline