SSA awards $9.1M Micro Focus software maintenance contract to August Schell Enterprises

Contract Overview

Contract Amount: $9,086,701 ($9.1M)

Contractor: August Schell Enterprises, Inc.

Awarding Agency: Social Security Administration

Start Date: 2022-10-01

End Date: 2026-09-30

Contract Duration: 1,460 days

Daily Burn Rate: $6.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESTABLISH A BASE + 4 OPTION YEARS CONTRACT FOR MAINTENANCE ON MICROFOCUS SOFTWARE

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $9.1 million to AUGUST SCHELL ENTERPRISES, INC. for work described as: ESTABLISH A BASE + 4 OPTION YEARS CONTRACT FOR MAINTENANCE ON MICROFOCUS SOFTWARE Key points: 1. Contract focuses on essential maintenance for Micro Focus software, critical for agency operations. 2. August Schell Enterprises, Inc. secured this contract through full and open competition. 3. The contract duration spans over 1400 days, indicating a long-term need for services. 4. The award type is a Delivery Order, suggesting it's part of a larger indefinite-delivery contract. 5. The pricing structure is Firm Fixed Price, providing cost certainty for the government. 6. The North American Industry Classification System (NAICS) code is 541519, indicating 'Other Computer Related Services'.

Value Assessment

Rating: good

The contract value of approximately $9.1 million over 1460 days suggests a moderate annual spend for software maintenance. Benchmarking against similar contracts for enterprise software maintenance requires detailed comparison of software criticality, vendor support levels, and contract scope. Without specific details on the Micro Focus software's importance and the support provided, a precise value-for-money assessment is challenging. However, the firm fixed-price structure offers predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was open, specific sources may have been excluded prior to the solicitation. The number of bidders is not specified, but the 'full and open' nature suggests a competitive process was intended. This approach aims to ensure fair access to government contracts while potentially addressing specific technical or security requirements.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to offer their best pricing and technical solutions, potentially leading to cost savings and better service.

Public Impact

The Social Security Administration (SSA) benefits from uninterrupted maintenance of its Micro Focus software. This ensures the continued operation of critical IT systems supporting SSA's mission. The contract supports the agency's ability to deliver services to the public. The primary beneficiaries are SSA employees who rely on the software for their daily tasks and, indirectly, the public receiving SSA services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Micro Focus software is deeply integrated and alternatives are costly.
Reliance on a single vendor for maintenance could lead to price increases in future renewals.
The 'exclusion of sources' clause warrants scrutiny to ensure it was justified and did not unduly limit competition.

Positive Signals

Firm Fixed Price contract provides budget certainty for the agency.
Full and open competition, even with exclusions, aims for a competitive marketplace.
The contract duration suggests a stable, long-term need, allowing for planned resource allocation.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software maintenance and support. The market for enterprise software maintenance is substantial, with many government agencies relying on specialized software for their operations. Comparable spending benchmarks would involve analyzing other federal contracts for similar enterprise software maintenance, considering factors like software complexity, vendor reputation, and support level agreements. The NAICS code 541519 covers a wide range of computer-related services, indicating this is a specialized niche within the larger IT landscape.

Small Business Impact

The provided data indicates that small business participation (ss and sb fields) is false for this contract. This suggests that the contract was not set aside for small businesses, nor is there an explicit indication of significant subcontracting opportunities for small businesses within this specific award. Further analysis would be needed to determine if the prime contractor has a broader small business subcontracting plan in place for other contracts or overall.

Oversight & Accountability

Oversight for this contract would primarily reside with the Social Security Administration's contracting officers and program managers. The firm fixed-price nature simplifies some aspects of financial oversight. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

IT Software Maintenance Contracts
Enterprise Software Support Services
Micro Focus Software Support
Federal IT Services Procurement
Social Security Administration IT Spending

Risk Flags

Potential for limited competition due to 'exclusion of sources' clause.
Lack of small business participation noted.
Dependence on a single vendor for critical software maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $9.1 million to AUGUST SCHELL ENTERPRISES, INC.. ESTABLISH A BASE + 4 OPTION YEARS CONTRACT FOR MAINTENANCE ON MICROFOCUS SOFTWARE

Who is the contractor on this award?

The obligated recipient is AUGUST SCHELL ENTERPRISES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.1 million.

What is the period of performance?

Start: 2022-10-01. End: 2026-09-30.

What is the track record of August Schell Enterprises, Inc. with the federal government, particularly in providing software maintenance services?

August Schell Enterprises, Inc. has a history of receiving federal contracts. To assess their track record specifically for software maintenance, a review of their past performance on similar contracts with agencies like the SSA or other federal entities would be necessary. This would involve examining contract performance evaluations (e.g., CPARS reports), any past disputes or contract modifications, and the types of software and services they have previously supported. A positive performance history on comparable contracts would indicate a lower risk for this current award. Conversely, a history of performance issues could raise concerns about the value and reliability of their services.

How does the annual cost of this contract compare to industry benchmarks for maintaining similar enterprise software?

The total contract value is approximately $9.1 million over roughly four years, equating to an annual spend of about $2.3 million. Benchmarking this against industry standards for Micro Focus software maintenance requires understanding the specific modules licensed, the number of users or instances supported, and the level of support required (e.g., 24/7 critical support vs. standard business hours). Generally, enterprise software maintenance can range from 15-25% of the initial software license cost annually. Without knowing the original license cost or the specific software suite, a direct comparison is difficult. However, if this represents a significant portion of the software's value or is unusually high/low compared to typical maintenance agreements for comparable systems, it could indicate potential issues with pricing.

What are the primary risks associated with relying on a single vendor for maintenance of critical software like Micro Focus?

The primary risks of relying on a single vendor for critical software maintenance include vendor lock-in, where switching to a different solution becomes prohibitively expensive or complex. This can lead to reduced negotiating power and potentially inflated prices in future contract renewals. There's also the risk of service disruption if the vendor experiences financial instability or decides to discontinue support for the product. Furthermore, the vendor might lack the incentive to innovate or provide superior service if they are the sole provider. For the SSA, mitigating these risks involves robust contract management, regular performance reviews, and potentially exploring alternative solutions or multi-vendor strategies during the contract lifecycle.

What is the historical spending pattern of the SSA on Micro Focus software maintenance, and how does this award fit within that pattern?

To determine the historical spending pattern, one would need to access prior contract awards for Micro Focus software maintenance by the SSA. This analysis would involve looking at previous contract values, durations, and awarded vendors over several years. Comparing this new $9.1 million award to past expenditures would reveal whether the SSA is increasing, decreasing, or maintaining its investment in this software. For instance, if previous maintenance contracts were significantly smaller, this award might indicate an expansion of software usage or a price increase. Conversely, if it's consistent with prior spending, it suggests ongoing, stable reliance on the software and its maintenance.

What specific Micro Focus software products are covered under this maintenance contract, and what is their criticality to SSA operations?

The provided data does not specify the exact Micro Focus software products covered by this contract. Micro Focus offers a wide range of solutions, including application modernization, IT operations management, and security software. Determining their criticality to SSA operations would require internal SSA documentation or a detailed statement of work. If these products are integral to core functions like benefits processing, data management, or citizen interaction, their uninterrupted maintenance is paramount. Understanding the specific software and its role is crucial for assessing the true value and risk associated with this contract, as the impact of any service disruption would be directly tied to the software's function.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1700 ROCKVILLE PIKE STE 405, ROCKVILLE, MD, 20852

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

Financial Breakdown

Contract Ceiling: $12,025,321

Exercised Options: $9,086,701

Current Obligation: $9,086,701

Actual Outlays: $9,302,773

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD80B

IDV Type: GWAC

Timeline