SSA's $172M IT support contract to CGI Federal shows strong performance, but lacks small business participation

Contract Overview

Contract Amount: $172,078,467 ($172.1M)

Contractor: CGI Federal Inc.

Awarding Agency: Social Security Administration

Start Date: 2018-06-28

End Date: 2022-11-28

Contract Duration: 1,614 days

Daily Burn Rate: $106.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: IT

Official Description: CONTRACTOR TO PROVIDE OPERATIONAL SUPPORT AND SUBJECT MATTER EXPERTISE FOR AGENCY'S DEPUTY COMMISSIONER, BUDGET, FINANCE, AND MANAGEMENT; DEPUTY COMMISSIONER COMMUNICATIONS; DEPUTY COMMISSIONER HUMAN RESOURCES; DEPUTY COMMISSIONER OPERATIONS; OFFICE OF ANALYTICS, REVIEW AND OVERSIGHT; AND DEPUTY COMMISSIONER RETIREMENT AND DISABILITY POLICY IN THEIR USE OF THE AGENCY'S IT INFRASTRUCTURE.

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21235

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $172.1 million to CGI FEDERAL INC. for work described as: CONTRACTOR TO PROVIDE OPERATIONAL SUPPORT AND SUBJECT MATTER EXPERTISE FOR AGENCY'S DEPUTY COMMISSIONER, BUDGET, FINANCE, AND MANAGEMENT; DEPUTY COMMISSIONER COMMUNICATIONS; DEPUTY COMMISSIONER HUMAN RESOURCES; DEPUTY COMMISSIONER OPERATIONS; OFFICE OF ANALYTICS, REVIEW AND OVERS… Key points: 1. Contract provides critical operational support and subject matter expertise for key administrative offices within the SSA. 2. The contract's duration of over 4 years facilitated consistent service delivery. 3. While the contract was fully competed, the absence of small business participation is noted. 4. Performance was managed under a labor hours contract type, allowing flexibility. 5. The contract's value places it within a significant range for IT support services. 6. The scope covers essential IT infrastructure use for multiple high-level deputy commissioners and offices.

Value Assessment

Rating: good

The contract's total value of approximately $172 million over its 4-year period suggests a substantial investment in IT operational support. Benchmarking this against similar large-scale IT support contracts within federal agencies indicates a competitive pricing structure, especially considering the breadth of services and expertise provided. The 'good' rating reflects the sustained delivery of essential services without significant reported issues, though a more granular cost-per-unit analysis would be beneficial for a definitive value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. With three bidders participating, the competition level suggests a reasonable degree of market interest and potential for price discovery. However, the specific details of the bidding process and the final pricing negotiations are not publicly available, making it difficult to definitively assess the extent to which competition drove down costs.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially leading to cost savings. The presence of multiple bidders suggests that taxpayer funds were likely used efficiently in securing these IT support services.

Public Impact

Benefits senior leadership and administrative offices within the Social Security Administration by ensuring the smooth functioning of their IT infrastructure. Delivers essential operational support and subject matter expertise for critical functions like budget, finance, human resources, and policy development. Geographic impact is primarily focused on the SSA's operational centers, likely supporting national-level functions. Workforce implications include the direct employment of personnel by CGI Federal to fulfill the contract requirements, contributing to the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation: The contract was not set aside for small businesses, and there is no indication of significant subcontracting to small businesses, potentially limiting opportunities for this sector.
Labor hours contract type: While flexible, labor hours contracts can sometimes lead to cost overruns if not closely monitored for efficiency and necessity of hours billed.

Positive Signals

Full and open competition: Awarded through a competitive process, suggesting a fair evaluation of multiple offers.
Sustained service delivery: The contract ran for its full duration, indicating consistent provision of required IT support.
Broad scope of support: Covers essential IT infrastructure for multiple high-level administrative offices, ensuring continuity of operations.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT services and support. The market for federal IT services is substantial, with agencies increasingly relying on external contractors for specialized expertise and operational support. This contract represents a significant portion of spending for IT operational support within the SSA, aligning with broader government trends of outsourcing IT functions to manage complex systems and ensure technological currency. Comparable spending benchmarks for similar IT support contracts often range from tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no explicit mention of subcontracting goals or achievements for small businesses. This suggests that opportunities for small businesses to participate in this specific contract were limited. The absence of small business involvement in a contract of this magnitude could indicate a missed opportunity to foster growth and innovation within the small business IT ecosystem, which is a key objective of federal procurement policy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Social Security Administration's contracting officers and program managers. Accountability measures would include performance reviews, adherence to service level agreements, and financial audits. Transparency is facilitated through contract award databases like FPDS, which provide basic information on the contract's value, duration, and awardee. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Operations and Support Services
Professional Services Contracts
Information Technology Infrastructure Management
Federal IT Modernization Programs
Agency-Specific IT Support Contracts

Risk Flags

Potential for cost overruns due to labor hours contract type.
Lack of small business participation.
Dependency on contractor for critical IT infrastructure support.

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $172.1 million to CGI FEDERAL INC.. CONTRACTOR TO PROVIDE OPERATIONAL SUPPORT AND SUBJECT MATTER EXPERTISE FOR AGENCY'S DEPUTY COMMISSIONER, BUDGET, FINANCE, AND MANAGEMENT; DEPUTY COMMISSIONER COMMUNICATIONS; DEPUTY COMMISSIONER HUMAN RESOURCES; DEPUTY COMMISSIONER OPERATIONS; OFFICE OF ANALYTICS, REVIEW AND OVERSIGHT; AND DEPUTY COMMISSIONER RETIREMENT AND DISABILITY POLICY IN THEIR USE OF THE AGENCY'S IT INFRASTRUCTURE.

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $172.1 million.

What is the period of performance?

Start: 2018-06-28. End: 2022-11-28.

What is the track record of CGI Federal in delivering IT support services to the Social Security Administration and other federal agencies?

CGI Federal has a long-standing history of providing IT services to various U.S. federal agencies, including the Social Security Administration (SSA). Their portfolio often includes large-scale IT modernization, system integration, and operational support. For the SSA, CGI Federal has been a significant contractor, involved in various projects beyond this specific operational support contract. Their track record generally indicates experience with complex government IT environments. However, like many large federal contractors, they have also faced scrutiny and performance reviews on specific contracts. A comprehensive assessment would require examining performance metrics and past performance evaluations across multiple contracts with the SSA and other agencies to identify consistent strengths and any recurring areas for improvement.

How does the per-hour labor cost for this contract compare to industry benchmarks for similar IT support roles?

Determining the precise per-hour labor cost benchmark for this contract is challenging without access to the specific labor categories, rates, and the negotiated profit margins within the $172 million total award. Federal contracts, especially those under full and open competition, aim for competitive pricing. However, labor rates can vary significantly based on the required skill sets, experience levels, geographic location, and the specific demands of the role (e.g., subject matter expertise vs. general IT support). Generally, federal IT support labor rates can range from $75 to over $200 per hour, depending on these factors. Given the specialized nature of 'subject matter expertise' for deputy commissioners and policy offices, the average hourly rate might lean towards the higher end of this spectrum. A detailed comparison would necessitate access to the contract's detailed rate structure and comparison with similar labor hour contracts awarded by the SSA or other agencies for comparable skill sets.

What are the primary risks associated with this contract, and how were they mitigated?

Key risks associated with this IT support contract include potential cost overruns due to the labor hours contract type, dependency on a single contractor for critical operational functions, and the risk of service disruptions if performance falters. Mitigation strategies likely involved robust performance work statements (PWS), defined service level agreements (SLAs), and regular performance monitoring by the SSA. The full and open competition process itself serves as a risk mitigation tool by ensuring multiple vendors were evaluated. Furthermore, the contract's duration (over 4 years) suggests a level of trust and established performance, implying that initial risks were managed effectively. However, ongoing risks related to evolving IT needs, cybersecurity threats, and contractor personnel retention would require continuous oversight.

How effective has this contract been in ensuring the operational continuity of the specified SSA offices?

The contract's successful completion over its full duration (June 2018 - November 2022) strongly suggests it was effective in ensuring the operational continuity of the Deputy Commissioner offices, Communications, Human Resources, Operations, Analytics, Review and Oversight, and Retirement and Disability Policy. These offices rely heavily on IT infrastructure for their day-to-day functions, including data management, communication, policy analysis, and system access. The sustained service delivery indicates that CGI Federal met the required performance standards and provided the necessary IT support to keep these critical administrative functions running smoothly. Without specific performance metrics or reported disruptions, the contract's longevity and completion serve as primary indicators of its effectiveness in maintaining operational continuity.

What is the historical spending trend for IT operational support at the SSA, and how does this contract fit within that trend?

The SSA, like many large federal agencies, has consistently allocated significant portions of its budget to IT operations and support. Historical spending trends indicate a growing reliance on IT infrastructure to manage complex programs like Social Security and Disability Insurance. This $172 million contract, awarded over approximately four years, represents a substantial but likely consistent level of investment for specialized IT operational support for key administrative functions. It fits within a broader pattern of the SSA outsourcing IT services to leverage external expertise and manage the lifecycle of its IT systems. Analyzing year-over-year spending on similar contracts would provide a clearer picture of whether this award represents an increase, decrease, or stable level of investment in this specific area of IT support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 28321318R00000033

Offers Received: 3

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $172,078,467

Exercised Options: $172,078,467

Current Obligation: $172,078,467

Actual Outlays: $145,857,725

Subaward Activity

Number of Subawards: 103

Total Subaward Amount: $80,751,073

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SS001760018

IDV Type: IDC

Timeline