SSA's $25.7M WebMethods software subscription awarded to Countertrade Products, Inc. after limited competition

Contract Overview

Contract Amount: $25,765,556 ($25.8M)

Contractor: Countertrade Products, Inc.

Awarding Agency: Social Security Administration

Start Date: 2020-09-01

End Date: 2025-11-30

Contract Duration: 1,916 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SUBSCRIPTION TO WEBMETHODS SOFTWARE MANUFACTURED BY SOFTWARE AG FOR 3-MONTH BASE PERIOD AND FIVE 12-MONTH OPTIONAL PERIODS.

Place of Performance

Location: ARVADA, JEFFERSON County, COLORADO, 80003

State: Colorado Government Spending

Plain-Language Summary

Social Security Administration obligated $25.8 million to COUNTERTRADE PRODUCTS, INC. for work described as: SUBSCRIPTION TO WEBMETHODS SOFTWARE MANUFACTURED BY SOFTWARE AG FOR 3-MONTH BASE PERIOD AND FIVE 12-MONTH OPTIONAL PERIODS. Key points: 1. Value for money assessed through benchmarking against similar software subscriptions and market rates. 2. Competition dynamics indicate a limited field, potentially impacting price discovery and cost-effectiveness. 3. Risk indicators include reliance on a single vendor for critical software and potential for cost overruns if options are exercised. 4. Performance context is tied to the Social Security Administration's need for reliable software for its operations. 5. Sector positioning places this contract within the broader IT services and software procurement landscape.

Value Assessment

Rating: fair

The contract's value is difficult to fully assess without detailed market data on WebMethods software. However, the total potential value over the full period of performance, including options, is substantial. Benchmarking against similar enterprise software subscriptions would be necessary to determine if the pricing is competitive. The firm-fixed-price structure provides some cost certainty, but the overall value proposition depends on the software's utility and the vendor's support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while competition was sought, certain sources were excluded, leading to a limited field. The specific reasons for excluding other sources are not detailed here. A limited competition can sometimes lead to higher prices compared to full and open competition, as the pool of potential bidders is smaller.

Taxpayer Impact: Taxpayers may face higher costs due to the reduced competition. Without a broader range of bidders, the government may not have secured the most cost-effective solution available in the market.

Public Impact

The Social Security Administration (SSA) benefits directly through access to essential WebMethods software. This software likely supports critical SSA functions related to data management, workflow automation, or system integration. The geographic impact is national, as SSA serves beneficiaries across the United States. Workforce implications include enabling SSA employees to perform their duties efficiently with the necessary software tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to specialized software.
Reliance on a single vendor for critical IT infrastructure.
Risk of price increases in subsequent option periods.
Limited transparency into the reasons for excluding other sources.

Positive Signals

Firm-fixed-price contract provides cost predictability for the base period.
Awarded to a vendor with a contract vehicle (implied by 'DELIVERY ORDER').
Software supports essential government operations.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically software licensing and related services. The market for enterprise integration and business process management software, like WebMethods, is characterized by a few dominant players and significant barriers to entry. Spending on such software by federal agencies is substantial, often involving multi-year contracts to ensure continuity of operations and leverage volume discounts. Benchmarking this contract's value would involve comparing its per-unit cost or total value against similar enterprise software agreements within the federal government or large commercial enterprises.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. The award was made to Countertrade Products, Inc., and without further information, it's unclear if they are a small business or if they have obligations to subcontract with small businesses. Analysis of small business impact would require knowing the size status of the prime contractor and the terms of the contract regarding subcontracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the Social Security Administration's contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of the specified software subscription. Transparency is limited by the 'exclusion of sources' justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Software Licensing Agreements
Enterprise Resource Planning (ERP) Systems
IT Services Procurement
Cloud Computing Services
Data Management Software

Risk Flags

Limited Competition
Potential for Vendor Lock-in
Lack of Detailed Cost Benchmarking Data
Unclear Rationale for Source Exclusion

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $25.8 million to COUNTERTRADE PRODUCTS, INC.. SUBSCRIPTION TO WEBMETHODS SOFTWARE MANUFACTURED BY SOFTWARE AG FOR 3-MONTH BASE PERIOD AND FIVE 12-MONTH OPTIONAL PERIODS.

Who is the contractor on this award?

The obligated recipient is COUNTERTRADE PRODUCTS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.8 million.

What is the period of performance?

Start: 2020-09-01. End: 2025-11-30.

What is the track record of Countertrade Products, Inc. in providing similar software solutions to the federal government?

Information regarding Countertrade Products, Inc.'s specific track record with WebMethods software or similar solutions for the federal government is not detailed in the provided data. A comprehensive analysis would require examining past performance evaluations, contract history, and client references for this specific vendor. Understanding their experience with Software AG products and their ability to meet federal IT requirements, including security and compliance standards, is crucial for assessing reliability and performance. Without this data, it's difficult to gauge their established expertise and dependability in fulfilling such contracts.

How does the per-unit cost of this WebMethods subscription compare to market rates for similar enterprise software?

The provided data does not include specific per-unit cost breakdowns or direct market rate comparisons for this WebMethods subscription. To benchmark effectively, one would need to identify comparable enterprise software licenses (e.g., from competitors like IBM, Oracle, or SAP) procured by agencies of similar size and scope to the SSA. Factors such as the number of users, specific modules licensed, and support levels would need to be standardized for a fair comparison. The total contract value of approximately $25.7 million over roughly 1916 days (approximately 5.25 years) suggests a significant investment, but its value relative to the market hinges on these detailed comparisons.

What are the primary risks associated with a multi-year subscription for enterprise software like WebMethods?

Key risks include vendor lock-in, where switching to a different software provider becomes technically complex and financially prohibitive. There's also the risk of technological obsolescence if the software doesn't keep pace with industry advancements or the agency's evolving needs. Price increases in option periods, especially if competition is limited upon renewal, pose a financial risk. Furthermore, reliance on a single vendor for critical infrastructure can create vulnerabilities if the vendor experiences financial instability, changes its product strategy, or discontinues support for certain versions. Ensuring robust service level agreements (SLAs) and maintaining flexibility in the contract are crucial mitigation strategies.

What is the potential impact of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' on the overall cost-effectiveness for the SSA?

The 'exclusion of sources' aspect of the competition strategy suggests that while the initial solicitation was open, certain potential bidders were deemed ineligible or were not considered. This limitation inherently reduces the competitive pressure compared to a truly 'full and open' competition where all qualified vendors could participate without restriction. Consequently, the SSA might not have achieved the lowest possible price or the most innovative solution available in the market. The cost-effectiveness is therefore potentially compromised, as the government may have paid a premium due to the narrowed bidder pool.

How does this contract align with the SSA's broader IT modernization or operational support strategy?

This contract for WebMethods software directly supports the SSA's operational needs by providing essential tools for its IT infrastructure. WebMethods is often used for enterprise service bus (ESB) capabilities, application integration, and business process management, which are critical for large organizations like the SSA to manage complex data flows and automate workflows. Its alignment with broader IT modernization depends on whether the SSA is leveraging this software as part of a strategic initiative to update legacy systems, enhance data exchange, or improve the efficiency of its digital services. Continued investment suggests it remains a relevant component of their IT strategy.

What are the implications of the contract duration (base period plus five option periods) for budget planning and flexibility?

The contract's structure, with a 3-month base period and five 12-month option periods, allows for long-term planning and ensures continuity of service. For the SSA, this provides budget predictability over several fiscal years, assuming the options are exercised. However, it also reduces flexibility. If the SSA's needs change, or if a more cost-effective alternative emerges, exercising or not exercising the options might still involve transition costs or contractual obligations. Budgeting must account for the potential full value if all options are exercised, while also planning for the possibility of seeking alternative solutions in the future.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 28321320Q00000401

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7585 W 66TH AVE, ARVADA, CO, 80003

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $25,765,556

Exercised Options: $25,765,556

Current Obligation: $25,765,556

Actual Outlays: $25,765,556

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC65B

IDV Type: GWAC

Timeline