Social Security Administration awards $41.3M for cloud services, extending contract for Option Year 2

Contract Overview

Contract Amount: $41,273,167 ($41.3M)

Contractor: Four Points Technology, L.L.C.

Awarding Agency: Social Security Administration

Start Date: 2023-05-01

End Date: 2024-09-28

Contract Duration: 516 days

Daily Burn Rate: $80.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CALL ORDER TO FUND OPTION YEAR 2 FOR CLOUD SERVICES - 28321321A00040003

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21235

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $41.3 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: CALL ORDER TO FUND OPTION YEAR 2 FOR CLOUD SERVICES - 28321321A00040003 Key points: 1. Contract value of $41.3M for Option Year 2 indicates significant ongoing investment in cloud infrastructure. 2. The award was made under a full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price contract type helps to control costs and provides predictability for the agency. 4. The contract duration of 516 days covers a substantial period for cloud service delivery. 5. The primary NAICS code (541519) points to a focus on broader computer-related services beyond basic cloud hosting. 6. The contract is not set aside for small businesses, implying larger prime contractors are involved.

Value Assessment

Rating: good

The contract value of $41.3M for approximately 17 months of cloud services appears reasonable given the scope. Benchmarking against similar large-scale cloud service contracts for federal agencies suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost certainty for the Social Security Administration, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the nature of the competition suggests a healthy market response. This level of competition is generally expected to drive competitive pricing and ensure the government receives fair market value for the services.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure cloud services at the best possible price, preventing potential overspending that could occur with less competitive solicitations.

Public Impact

The Social Security Administration is the primary beneficiary, receiving essential cloud services to support its operations. These services are critical for maintaining and modernizing the IT infrastructure that underpins Social Security programs. The contract supports the agency's ability to deliver services to millions of Americans. The geographic impact is national, as SSA's cloud infrastructure supports its nationwide service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full assessment of competition intensity.
Details on specific cloud services and performance metrics are not readily available in the provided data.
Potential for vendor lock-in with long-term cloud service agreements, though competition mitigates this.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type provides cost predictability.
Option year structure allows for continued service delivery and potential for future competition.
Contract supports critical government functions for a major federal agency.

Sector Analysis

The federal IT services market, particularly cloud computing, is a massive and rapidly growing sector. Agencies are increasingly migrating services to the cloud to enhance scalability, flexibility, and cost-efficiency. This contract for cloud services fits within the broader trend of federal agencies modernizing their IT infrastructure. Comparable spending benchmarks for large federal cloud contracts often run into tens or hundreds of millions of dollars annually, depending on the scope and services provided.

Small Business Impact

This contract was not set aside for small businesses, nor is there information indicating specific small business subcontracting requirements. This suggests that the prime contractor, Four Points Technology, L.L.C., is likely a larger entity or that the contract's nature did not lend itself to small business set-asides. The absence of explicit small business participation goals means the direct impact on the small business ecosystem for this specific award is likely minimal, though the prime contractor may engage small businesses in their supply chain.

Oversight & Accountability

The contract is managed by the Social Security Administration, which has internal oversight mechanisms for contract performance and financial management. As a firm-fixed-price contract, financial oversight focuses on ensuring adherence to the agreed-upon price. Transparency is facilitated by public contract databases where such awards are reported. Specific Inspector General jurisdiction would typically fall under the SSA's Office of the Inspector General, which investigates fraud, waste, and abuse within the agency's programs and contracts.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Cloud Computing Services Contracts
IT Modernization Initiatives
Social Security Administration IT Procurement

Risk Flags

Potential for vendor lock-in
Cybersecurity risks associated with cloud environments
Ensuring compliance with data privacy regulations
Performance variability in cloud service delivery

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $41.3 million to FOUR POINTS TECHNOLOGY, L.L.C.. CALL ORDER TO FUND OPTION YEAR 2 FOR CLOUD SERVICES - 28321321A00040003

Who is the contractor on this award?

The obligated recipient is FOUR POINTS TECHNOLOGY, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $41.3 million.

What is the period of performance?

Start: 2023-05-01. End: 2024-09-28.

What is the track record of Four Points Technology, L.L.C. with federal cloud service contracts?

Four Points Technology, L.L.C. has a history of performing federal IT contracts, including those related to cloud services. Their ability to secure this option year extension from the Social Security Administration suggests a satisfactory performance record on the initial period of the contract. Federal procurement data often shows multiple awards to established contractors who demonstrate reliability and competitive pricing. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations related to their previous federal engagements to fully assess their track record in delivering cloud solutions.

How does the $41.3M value compare to similar cloud service contracts for federal agencies of SSA's size?

The $41.3 million award for approximately 17 months of cloud services places this contract within the mid-to-large range for federal IT procurements. Agencies like the Social Security Administration, which manage vast amounts of sensitive data and serve millions of beneficiaries, require robust and scalable cloud infrastructure. Comparing this to other large agencies' cloud spending, such as the Department of Defense or Health and Human Services, reveals that such figures are not uncommon for comprehensive cloud solutions. The value appears aligned with the scale and criticality of SSA's mission, suggesting a benchmark that reflects market rates for comparable services.

What are the primary risks associated with this cloud services contract?

Key risks include potential performance issues if the vendor fails to meet service level agreements, cybersecurity vulnerabilities inherent in cloud environments, and the possibility of cost overruns if the firm-fixed-price contract doesn't adequately account for all potential usage or if scope creep occurs without proper change control. Vendor lock-in is another concern, making it difficult and costly to switch providers later. Ensuring data privacy and compliance with federal regulations (like FISMA) is paramount. The Social Security Administration must maintain vigilant oversight to mitigate these risks.

How effective is the firm-fixed-price contract type in managing costs for cloud services?

The firm-fixed-price (FFP) contract type is generally effective in controlling costs for predictable services, as it shifts the risk of cost overruns to the contractor. For cloud services, its effectiveness depends on how well the scope of services and expected usage levels were defined during the initial solicitation. If the usage is highly variable or unforeseen demands arise, an FFP contract might lead to the contractor seeking additional funds or the agency receiving less service than anticipated for the fixed price. However, for established cloud services with defined parameters, FFP provides significant cost certainty for the agency.

What are the historical spending patterns for cloud services at the Social Security Administration?

Historical spending data for cloud services at the Social Security Administration would reveal trends in their adoption and utilization of cloud technologies. Without specific historical data, it's presumed that SSA, like many federal agencies, has been progressively increasing its investment in cloud solutions to modernize its IT infrastructure and improve service delivery. This $41.3M award for an option year suggests a commitment to their current cloud strategy and potentially reflects an increasing reliance on these services over time. Analyzing past contract awards and spending levels would provide a clearer picture of their cloud adoption trajectory.

What is the significance of the NAICS code 541519 (Other Computer Related Services)?

The NAICS code 541519, 'Other Computer Related Services,' is broad and indicates that the contract likely encompasses a range of IT services beyond basic cloud hosting or infrastructure. This could include IT consulting, systems integration, custom software development, IT support, and other specialized computer services that leverage cloud platforms. This classification suggests the contract is designed to provide comprehensive IT solutions rather than just raw computing resources, aligning with the complex needs of an agency like the Social Security Administration.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - STORAGE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14900 CONFERENCE CENTER DR STE 100, CHANTILLY, VA, 20151

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $41,273,167

Exercised Options: $41,273,167

Current Obligation: $41,273,167

Actual Outlays: $39,373,156

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 28321321A00040003

IDV Type: BPA

Timeline