SSA Awards $77.4M IBM Contract for Z17 CLINS, Undermining Competition

Contract Overview

Contract Amount: $77,398,572 ($77.4M)

Contractor: International Business Machines Corporation

Awarding Agency: Social Security Administration

Start Date: 2025-09-26

End Date: 2025-12-25

Contract Duration: 90 days

Daily Burn Rate: $860.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORDER FOR Z17 CLINS OFF THE IBM CONTRACT

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $77.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: ORDER FOR Z17 CLINS OFF THE IBM CONTRACT Key points: 1. Significant award value of $77.4 million. 2. Sole-source award to IBM raises competition concerns. 3. Short duration (90 days) may indicate urgent need or limited scope. 4. Focus on electronic computer manufacturing (NAICS 334111).

Value Assessment

Rating: questionable

The award value of $77.4 million for a 90-day period is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar electronic computer manufacturing services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to IBM. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition on this $77.4 million award means taxpayers may not be receiving the best possible price.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. Reliance on a single vendor for critical IT components could pose future supply chain risks. The Social Security Administration's procurement process for this order warrants scrutiny.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment
Sole-source award

Positive Signals

Award to established vendor (IBM)
Clear delivery period

Sector Analysis

The Social Security Administration's IT spending in electronic computer manufacturing is crucial for its operations. Benchmarks for similar contracts are hard to establish without competitive data, but $77.4M for 90 days is a significant outlay.

Small Business Impact

This contract was awarded to IBM, a large corporation, and there is no indication that small businesses were involved in this specific procurement.

Oversight & Accountability

The sole-source nature of this award suggests a potential gap in oversight regarding competitive procurement practices. Further review is needed to ensure fair and efficient use of taxpayer funds.

Related Government Programs

Electronic Computer Manufacturing
Social Security Administration Contracting
Social Security Administration Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited vendor options
Short contract duration for high value

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $77.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. ORDER FOR Z17 CLINS OFF THE IBM CONTRACT

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 $77.4 million.

What is the period of performance?

Start: 2025-09-26. End: 2025-12-25.

What specific Z17 CLINS are being procured under this IBM contract, and why were they deemed unavailable through competitive means?

The specific Z17 CLINS are not detailed in the provided data. However, the sole-source nature suggests either a unique requirement, a critical and time-sensitive need where only IBM could fulfill it, or a potential failure in the agency's market research to identify alternative sources. A thorough justification for the sole-source award is necessary to validate this procurement decision.

What is the risk associated with awarding a $77.4 million contract for only 90 days without competition?

The primary risk is financial: the government may have overpaid due to the absence of competitive pressure. Additionally, a short, high-value, sole-source award can indicate rushed decision-making, potentially overlooking better alternatives or creating a precedent for non-competitive awards. It also limits the opportunity for smaller, innovative companies to compete for government business.

How effective is the Social Security Administration's procurement strategy in ensuring value for money when awarding large, sole-source contracts?

This specific award raises questions about the SSA's procurement effectiveness in achieving value for money, given the sole-source designation. While IBM is a reputable vendor, the lack of competition inherently reduces the likelihood of securing the best possible price. The agency needs to demonstrate robust justification for sole-source awards to assure taxpayers that competitive principles are being upheld where feasible.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - DATA CENTER

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $77,398,572

Exercised Options: $77,398,572

Current Obligation: $77,398,572

Actual Outlays: $77,398,572

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SS001660010

IDV Type: IDC

Timeline