IBM SRO Software Maintenance contract awarded by SSA for over $140M, spanning 4 years

Contract Overview

Contract Amount: $140,479,752 ($140.5M)

Contractor: International Business Machines Corporation

Awarding Agency: Social Security Administration

Start Date: 2007-12-31

End Date: 2011-12-30

Contract Duration: 1,460 days

Daily Burn Rate: $96.2K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: OTHER (APPLIES TO AWARDS WHERE NONE OF THE ABOVE APPLY)

Sector: IT

Official Description: IBM SRO SOFTWARE MAINTENANCE

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20814

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $140.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IBM SRO SOFTWARE MAINTENANCE Key points: 1. Value for money appears fair given the duration and scope of software maintenance. 2. Competition dynamics indicate a competitive delivery order, suggesting potential for price negotiation. 3. Risk indicators are moderate, typical for long-term software maintenance contracts. 4. Performance context is within the expected range for enterprise software support. 5. Sector positioning is within the IT services sector, specifically software maintenance. 6. The contract's value is substantial, reflecting the critical nature of the software supported.

Value Assessment

Rating: fair

The contract value of over $140 million for four years of software maintenance suggests a significant investment. Benchmarking against similar large-scale software maintenance agreements is challenging without more specific service details. However, the per-year cost of approximately $35 million for enterprise-level software support from a major vendor like IBM is within a plausible range, though a detailed cost-benefit analysis would be required to confirm optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors had the opportunity to bid. The 'full-and-open' competition level suggests a robust bidding process, which typically leads to better price discovery and potentially more favorable terms for the government. The presence of competition is a positive sign for ensuring a reasonable price for the services rendered.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The Social Security Administration (SSA) benefits from continuous and supported operation of critical IT systems. Essential services provided by the SSA, such as benefit processing and constituent support, are maintained. The geographic impact is national, as SSA systems support citizens across the United States. Workforce implications include ensuring IT personnel have reliable software tools to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with proprietary IBM software.
Reliance on a single vendor for critical software maintenance can create dependency.
Scope creep could increase costs if not managed tightly.
Ensuring adequate performance metrics are defined and enforced is crucial.

Positive Signals

Competitive award process suggests potential for cost savings.
Long-term contract provides stability for critical IT operations.
IBM is a well-established vendor with a track record in enterprise software.
Clear contract duration helps in budget planning.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software maintenance and support for enterprise-level systems. The IT services market is vast, with significant government spending allocated to maintaining and upgrading complex software infrastructures. Comparable spending benchmarks for large federal software maintenance contracts often run into tens or hundreds of millions of dollars annually, depending on the criticality and scale of the systems involved. This contract's value aligns with the typical investment required for supporting mission-critical applications.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract. As a large contract likely involving proprietary software maintenance from a major vendor, it's less probable that small businesses would be primary awardees. However, the prime contractor, IBM, may have subcontracting plans that could involve small businesses for specific support roles or components, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Social Security Administration's contracting officers and program managers. Accountability measures would be defined in the contract's performance work statement, including service level agreements (SLAs) and reporting requirements. Transparency is generally maintained through contract award databases, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal IT Modernization Programs
Software Licensing and Maintenance Contracts
Enterprise Resource Planning (ERP) Systems Support
Cloud Computing Transition Initiatives
Cybersecurity Maintenance Contracts

Risk Flags

Potential for vendor lock-in
Reliance on proprietary technology
Long-term commitment may limit flexibility
Need for robust performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $140.5 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IBM SRO SOFTWARE MAINTENANCE

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 $140.5 million.

What is the period of performance?

Start: 2007-12-31. End: 2011-12-30.

What is IBM's track record with the Social Security Administration on similar software maintenance contracts?

IBM has a long-standing relationship with various government agencies, including the Social Security Administration (SSA), providing a wide range of IT services and software solutions. For software maintenance specifically, IBM's track record typically involves ensuring the continuity of operations for complex systems, providing technical support, and delivering necessary updates and patches. The SSA, like many large federal agencies, relies on established vendors like IBM for the maintenance of critical infrastructure. While specific performance metrics for past contracts are not detailed here, IBM's general reputation is that of a major IT solutions provider capable of handling large-scale enterprise support. The longevity of such contracts often reflects a level of satisfaction with the vendor's ability to meet ongoing operational requirements.

How does the $140 million contract value compare to other federal software maintenance contracts of similar scope?

The $140 million contract value for four years of software maintenance, averaging approximately $35 million per year, places it within the mid-to-high range for federal IT maintenance contracts. Large federal agencies often spend significant sums on maintaining complex, mission-critical software systems, especially those developed or managed by major technology vendors like IBM. Contracts for enterprise resource planning (ERP) systems, core financial systems, or large database management systems can easily reach these figures or exceed them, depending on the number of users, the criticality of the application, and the level of support required (e.g., 24/7 support, rapid response times). Without knowing the specific software and its criticality to the SSA's operations, a precise comparison is difficult, but the amount is consistent with substantial federal IT investments.

What are the primary risks associated with a long-term software maintenance contract with a single vendor like IBM?

The primary risks associated with a long-term software maintenance contract with a single vendor like IBM include vendor lock-in, where the agency becomes heavily dependent on the vendor's proprietary technology and services, making it difficult and costly to switch to alternatives. There's also the risk of price increases over time, as the vendor may leverage the agency's dependency to negotiate higher maintenance fees. Performance risk is another concern; if the vendor fails to deliver adequate support or timely updates, it can disrupt critical government operations. Furthermore, reliance on a single vendor can limit innovation if the vendor does not proactively introduce new technologies or if the agency is unable to explore solutions from other providers. Ensuring robust contract management and performance monitoring is crucial to mitigate these risks.

What is the expected effectiveness of this contract in ensuring the continued operation of SSA's IT systems?

The expected effectiveness of this contract in ensuring the continued operation of the SSA's IT systems is high, given the nature of software maintenance agreements. These contracts are specifically designed to provide ongoing technical support, bug fixes, security patches, and updates necessary to keep complex software running smoothly and securely. By securing maintenance services from IBM, a major software provider, the SSA aims to minimize downtime, address vulnerabilities promptly, and ensure that its systems remain compatible with evolving hardware and operating system environments. The contract's duration suggests a commitment to long-term system stability, which is crucial for an agency like the SSA that provides essential services to millions of citizens.

How has the SSA's spending on IBM software maintenance evolved over time, and what does this contract represent in that trend?

Analyzing the SSA's historical spending on IBM software maintenance would require access to detailed historical contract data beyond this single award. However, it is common for large federal agencies to have ongoing, multi-year contracts for the maintenance of core IT systems, especially those from established vendors like IBM. This $140 million contract, awarded in late 2007 and ending in late 2011, represents a significant, but likely not unprecedented, investment for the SSA during that period. Such long-term commitments often reflect the stability and criticality of the underlying software. Trends in federal IT spending often show a substantial portion allocated to operations and maintenance (O&M) of existing systems, rather than solely new development. This contract fits within that pattern of sustained investment in maintaining essential IT infrastructure.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SSA-RFQ-08-1170

Offers Received: 1

Pricing Type: OTHER (APPLIES TO AWARDS WHERE NONE OF THE ABOVE APPLY) (3)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $140,479,752

Exercised Options: $140,479,752

Current Obligation: $140,479,752

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4984H

IDV Type: FSS

Timeline