SSA renews IBM software maintenance and licenses for over $525M via GSA Schedule

Contract Overview

Contract Amount: $525,446,096 ($525.4M)

Contractor: International Business Machines Corporation

Awarding Agency: Social Security Administration

Start Date: 2016-12-31

End Date: 2026-12-30

Contract Duration: 3,651 days

Daily Burn Rate: $143.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE GOVERNMENT INTENDS TO ESTABLISH A SINGLE-AWARD DELIVERY ORDER BASE PLUS FOUR 1YEAR OPTION PERIODS FOR THE RENEWAL OF IBM SOFTWARE MAINTENANCE AND THE PURCHASE OF MORE ADDITIONAL IBM SOFTWARE LICENSES AGAINST THE GENERAL SERVICES ADMINISTRATIONS FEDERAL SUPPLY SCHEDULE PROGRAM. PREVIOUS ORDER SS00-15-30081

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $525.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: THE GOVERNMENT INTENDS TO ESTABLISH A SINGLE-AWARD DELIVERY ORDER BASE PLUS FOUR 1YEAR OPTION PERIODS FOR THE RENEWAL OF IBM SOFTWARE MAINTENANCE AND THE PURCHASE OF MORE ADDITIONAL IBM SOFTWARE LICENSES AGAINST THE GENERAL SERVICES ADMINISTRATIONS FEDERAL SUPPLY SCHEDULE PROGRAM… Key points: 1. Value for money hinges on the necessity and cost-effectiveness of continued IBM software. 2. Competition dynamics are limited by the use of the GSA Schedule for software renewals. 3. Risk indicators include potential vendor lock-in and the ongoing cost of proprietary software. 4. Performance context is tied to the continued operation of critical SSA systems reliant on IBM software. 5. Sector positioning places this contract within the IT services sector, specifically software licensing and maintenance.

Value Assessment

Rating: fair

The contract's value is difficult to assess without detailed breakdowns of maintenance versus new licenses and comparisons to market rates for similar IBM software. The total value of over $525 million over approximately 10 years suggests a significant investment. Benchmarking against other federal agencies or commercial entities using comparable IBM software would be necessary to determine if the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract is being established against the General Services Administration's (GSA) Federal Supply Schedule (FSS), which is generally considered a full and open competition vehicle. However, the specific order is a single-award delivery order, implying that while the FSS itself is competed, this particular order may not have undergone a separate competitive process among multiple vendors on the schedule. The number of bidders for this specific delivery order is not detailed.

Taxpayer Impact: Utilizing the GSA Schedule can offer some price advantages through pre-negotiated rates, but the lack of direct competition for this specific delivery order might limit opportunities for further price reductions for taxpayers.

Public Impact

The Social Security Administration (SSA) benefits through continued access to essential IBM software. Critical IT infrastructure and services supporting SSA operations are maintained. The geographic impact is national, as SSA serves citizens across the United States. Workforce implications include ensuring IT personnel have the necessary tools and licenses to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost escalation over the contract term.
Dependence on a single vendor for critical software.
Risk of obsolescence if software is not updated or maintained effectively.

Positive Signals

Ensures continuity of essential IT services for a major federal agency.
Leverages existing GSA Schedule contract for streamlined procurement.
Provides access to necessary software for ongoing operations.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing and maintenance. The IT services market, particularly for enterprise software from major vendors like IBM, is substantial. Federal spending on software and related services is a significant portion of the overall IT budget, with agencies often relying on established vendors for mission-critical applications. Benchmarks for similar enterprise software agreements can vary widely based on the specific products, user counts, and support levels.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) is not a stated requirement or outcome for this contract. As it is a renewal and expansion of IBM software licenses and maintenance, it is unlikely to involve significant subcontracting opportunities for small businesses unless IBM itself engages them. The focus is on a large, established software vendor, not on fostering the small business IT ecosystem through this specific award.

Oversight & Accountability

Oversight is likely managed through the GSA's contract management systems and the SSA's internal procurement and IT governance. Accountability measures would involve performance metrics tied to software availability and support. Transparency is facilitated by the public nature of federal contract awards, though detailed justifications for specific pricing or renewal decisions may not be fully public. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

GSA Federal Supply Schedule Program
Software and Information Technology
IT Maintenance and Support Services
Enterprise Software Licensing

Risk Flags

Potential for vendor lock-in due to reliance on a single provider for critical software.
Lack of detailed cost breakdown makes value assessment challenging.
Limited transparency on specific software products and their criticality.
Reliance on GSA Schedule may limit direct price negotiation opportunities for this specific order.

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $525.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. THE GOVERNMENT INTENDS TO ESTABLISH A SINGLE-AWARD DELIVERY ORDER BASE PLUS FOUR 1YEAR OPTION PERIODS FOR THE RENEWAL OF IBM SOFTWARE MAINTENANCE AND THE PURCHASE OF MORE ADDITIONAL IBM SOFTWARE LICENSES AGAINST THE GENERAL SERVICES ADMINISTRATIONS FEDERAL SUPPLY SCHEDULE PROGRAM. PREVIOUS ORDER SS00-15-30081

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 $525.4 million.

What is the period of performance?

Start: 2016-12-31. End: 2026-12-30.

What is the breakdown of the total contract value between software maintenance and new software licenses?

The provided data does not specify the exact allocation of the $525,446,095.96 total contract value between software maintenance and the purchase of additional IBM software licenses. The contract description indicates both are included. To provide a more precise analysis, a detailed breakdown from the contracting officer or the contract award documents would be necessary. Understanding this split is crucial for assessing the value proposition, as maintenance costs are often recurring operational expenses, while new license purchases represent capital investments or expanded capabilities.

How does the per-unit cost of these IBM software licenses compare to commercial list prices or other federal agency purchases?

The provided data does not include per-unit cost information for the IBM software licenses. To benchmark this, one would need to identify the specific IBM software products being procured, the number of licenses (e.g., per user, per processor), and compare these against IBM's commercial list prices or negotiated rates available through other federal contracts or GSA Schedule offerings. Without this granular data, it is impossible to definitively assess if the pricing represents good value for money. The GSA Schedule aims for competitive pricing, but specific product-level comparisons are essential.

What is the historical spending trend for IBM software maintenance and licenses at the SSA?

The data mentions a previous order, 'SS00-15-30081', suggesting a history of procuring IBM software and maintenance through this channel. However, specific historical spending figures prior to this current $525M+ award are not provided. Analyzing past spending patterns would reveal if the current investment represents an increase, decrease, or stable expenditure level for IBM products at the SSA. Understanding this trend is important for identifying potential cost escalations or shifts in technology reliance over time.

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

The provided data does not list the specific IBM software products included in this contract. It only states 'IBM software maintenance and the purchase of more additional IBM software licenses.' To assess criticality, one would need to know which systems rely on these specific IBM products. For example, are they core database systems, middleware, operating systems, or specific application software? The criticality directly impacts the risk associated with vendor lock-in and the importance of ensuring continuous availability and support.

Are there any performance metrics or service level agreements (SLAs) associated with the IBM software maintenance and support?

The provided data does not detail the specific performance metrics or Service Level Agreements (SLAs) tied to this contract. Typically, software maintenance contracts include provisions for response times, resolution times, availability guarantees, and patch/update delivery schedules. The effectiveness of the 'value for money' assessment is significantly influenced by the robustness of these SLAs and the SSA's ability to enforce them. Without this information, it's difficult to gauge the quality of service being procured beyond the basic provision of licenses and updates.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SSA-RFQ-17-1053

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 NEW ORCHARD RD, ARMONK, NY, 10504

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

Financial Breakdown

Contract Ceiling: $597,562,811

Exercised Options: $525,446,096

Current Obligation: $525,446,096

Actual Outlays: $341,359,757

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F110DA

IDV Type: FSS

Timeline