Smithsonian Institution Spends $12.4M on Payroll Services with WageWorks, Inc. via Sole Source Contract

Contract Overview

Contract Amount: $12,441,664 ($12.4M)

Contractor: Wageworks, Inc.

Awarding Agency: Smithsonian Institution

Start Date: 2005-12-07

End Date: 2010-09-30

Contract Duration: 1,758 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BENEFITS SERVICES

Place of Performance

Location: SAN MATEO, SAN MATEO County, CALIFORNIA, 94402

State: California Government Spending

Plain-Language Summary

Smithsonian Institution obligated $12.4 million to WAGEWORKS, INC. for work described as: BENEFITS SERVICES Key points: 1. Significant spending on essential payroll services highlights the importance of reliable HR infrastructure. 2. The sole-source nature of this contract raises questions about potential price inflation and lack of competitive pressure. 3. Long contract duration (1758 days) suggests a need for stable, long-term service provision. 4. The absence of small business participation warrants further investigation into contracting opportunities.

Value Assessment

Rating: questionable

The contract value of $12.4M for payroll services over nearly 5 years appears high, especially given the sole-source award. Without competitive bids, it's difficult to benchmark against similar contracts, but the lack of competition suggests a potential for overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed under SAP, indicating a sole-source award. This limits price discovery and competition, potentially leading to higher costs for taxpayers as the government did not explore alternative vendors or negotiate based on market rates.

Taxpayer Impact: The sole-source award for a significant amount suggests taxpayers may have paid a premium due to the lack of competitive bidding.

Public Impact

Employees of the Smithsonian Institution rely on these services for accurate and timely payroll processing. The large contract value indicates a substantial investment in human resources management technology and support. Lack of competition may limit innovation and service improvements that could arise from a more open market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
No small business participation
Long contract duration
High contract value for services

Positive Signals

Essential service provision
Firm fixed price contract

Sector Analysis

Payroll services fall under administrative and IT support sectors. Spending benchmarks for such services vary widely based on the size of the organization and the complexity of its payroll system. This $12.4M contract for a federal agency suggests a substantial operation.

Small Business Impact

The contract data indicates no small business participation (sb: false). This suggests that opportunities for small businesses in providing payroll services to the Smithsonian Institution were either not sought or not met by available small business vendors.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government obtained fair value and that the justification for a sole-source procurement was sound and properly documented.

Related Government Programs

Payroll Services
Smithsonian Institution Contracting
Smithsonian Institution Programs

Risk Flags

Lack of competition
Potential for overpayment
No small business utilization
Long contract duration without re-evaluation
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Smithsonian Institution awarded $12.4 million to WAGEWORKS, INC.. BENEFITS SERVICES

Who is the contractor on this award?

The obligated recipient is WAGEWORKS, INC..

Which agency awarded this contract?

Awarding agency: Smithsonian Institution (Smithsonian Institution).

What is the total obligated amount?

The obligated amount is $12.4 million.

What is the period of performance?

Start: 2005-12-07. End: 2010-09-30.

Was a thorough market research conducted to justify the sole-source award for payroll services?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP,' strongly suggesting a sole-source award. While the specific justification and market research details are not present, the lack of competition implies that a comprehensive analysis of available vendors and potential for competitive bidding may have been insufficient or bypassed.

What is the potential cost savings if this contract had been competed?

Estimating precise savings is difficult without detailed market data and service specifics. However, sole-source contracts typically result in higher costs compared to competitive ones. A conservative estimate might suggest potential savings of 10-20% if competitive bidding had been pursued, translating to $1.2M - $2.5M over the contract's life.

Are there alternative, more competitive contract vehicles available for payroll services?

Yes, numerous government-wide contract vehicles and GSA schedules exist for administrative and IT services, including payroll processing. The Smithsonian Institution could explore these existing frameworks to solicit competitive bids, potentially achieving better pricing and accessing a wider range of qualified vendors.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Payroll Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2 WATERS PARK DR 250, SAN MATEO, CA, 15

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,441,664

Exercised Options: $12,441,664

Current Obligation: $12,441,664

Timeline