Compete Now or Pay More: SSA's $27M Compuware Software Deal Raises Cost Concerns

Contract Overview

Contract Amount: $27,173,767 ($27.2M)

Contractor: Compuware Corporation

Awarding Agency: Social Security Administration

Start Date: 2009-09-30

End Date: 2011-09-29

Contract Duration: 729 days

Daily Burn Rate: $37.3K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COMPUWARE SOFTWARE RECOMPETE

Place of Performance

Location: DETROIT, WAYNE County, MICHIGAN, 48226

State: Michigan Government Spending

Plain-Language Summary

Social Security Administration obligated $27.2 million to COMPUWARE CORPORATION for work described as: COMPUWARE SOFTWARE RECOMPETE Key points: 1. The contract's non-competitive nature suggests potential for higher costs compared to a fully competed scenario. 2. SSA's reliance on a single vendor for critical software may indicate a lack of market competition. 3. The fixed-price contract type offers some cost certainty, but the absence of competition limits upside for taxpayers. 4. The duration of the contract (729 days) is substantial, implying a long-term dependency on this specific software. 5. The small business status of the contractor is not applicable, indicating a large business award. 6. The contract's value, while significant, needs to be benchmarked against similar software procurements to assess value for money.

Value Assessment

Rating: fair

Benchmarking the value of this $27.17 million contract is challenging without more specific details on the software's functionality and market alternatives. However, the non-competitive award mechanism inherently raises questions about whether the Social Security Administration (SSA) secured the best possible price. In a competitive environment, multiple vendors would bid, driving prices down. The fixed-price nature provides some cost control, but the lack of competition means the government may not be realizing the full cost savings achievable through a robust bidding process. Further analysis would require comparing this price to similar software licenses or maintenance agreements for comparable systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, meaning it was not openly competed. This typically occurs when a specific vendor's product is required, or when only one vendor can provide the necessary services or supplies. The lack of competition means that multiple potential bidders were not considered, which limits the government's ability to leverage market forces to achieve the lowest possible price. The absence of a competitive process prevents price discovery through bidding.

Taxpayer Impact: Taxpayers may have paid a premium for this software due to the lack of competition. Without multiple bids, there's no guarantee that the government received the most cost-effective solution available in the market.

Public Impact

The Social Security Administration benefits from continued access to Compuware software, crucial for its operations. This contract ensures the availability of essential IT infrastructure for processing social security benefits and related services. The geographic impact is national, as the SSA operates nationwide, and the software likely supports critical back-office functions. Workforce implications are indirect, supporting the IT personnel who manage and utilize the software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs for taxpayers.
Long contract duration may indicate vendor lock-in and reduced flexibility.
Reliance on a single vendor for critical software poses a risk if that vendor experiences issues or significantly raises prices in the future.

Positive Signals

Fixed-price contract provides some cost certainty for the government.
Ensures continuity of essential software for SSA operations.

Sector Analysis

This contract falls within the broader software and IT services sector, specifically focusing on enterprise software solutions. The market for such software can be highly competitive, with numerous vendors offering a wide range of products. However, for specialized or legacy systems, a single vendor may dominate, leading to non-competitive procurements. The total federal spending on software and IT services is in the hundreds of billions annually, making individual contracts like this a small fraction but indicative of broader trends in government IT acquisition.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. The contractor, Compuware Corporation, is a large business. There is no indication of subcontracting opportunities for small businesses within this specific award, suggesting that the primary benefits of this contract will accrue to the large business vendor.

Oversight & Accountability

Oversight for this contract would primarily reside with the Social Security Administration's contracting officers and program managers. The contract type (delivery order) suggests it's part of a larger framework agreement or existing contract. Transparency is limited by the non-competitive nature of the award. While the Federal Procurement Data System (FPDS) provides basic contract information, detailed justifications for non-competitive awards and performance metrics are often not publicly accessible. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Software Licensing and Maintenance Agreements
Enterprise Resource Planning (ERP) Systems
IT Services and Support Contracts

Risk Flags

Non-competitive award
Potential for increased cost due to lack of competition
Vendor lock-in risk
Reliance on single vendor for critical software

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $27.2 million to COMPUWARE CORPORATION. COMPUWARE SOFTWARE RECOMPETE

Who is the contractor on this award?

The obligated recipient is COMPUWARE CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2009-09-30. End: 2011-09-29.

What specific Compuware software product is being procured, and what is its criticality to SSA operations?

The data provided does not specify the exact Compuware software product. However, given the context of the Social Security Administration (SSA), it is likely a core system supporting critical functions such as benefits processing, data management, or IT infrastructure. Compuware offers a suite of products for mainframe modernization, application performance management, and IT portfolio management. The criticality to SSA operations is implied by the significant contract value and the non-competitive award, suggesting it's a necessary component for which alternatives are not readily available or easily integrated. Without more specific product information, it's difficult to assess the precise impact, but it's reasonable to assume it supports essential government functions.

What was the justification for awarding this contract on a non-competitive basis?

The justification for a non-competitive award, often referred to as a sole-source justification, typically falls under specific exceptions to full and open competition outlined in the Federal Acquisition Regulation (FAR). Common reasons include: (1) the property or services are available only from a single source; (2) the agency is precluded from using competitive procedures by statute or regulation; (3) the agency has a critical need for the supplies or services and it is impracticable to obtain them through competitive procedures; or (4) the award is made under circumstances of unusual and compelling urgency. For this Compuware software recompete, the justification likely centers on the proprietary nature of the software, the need for continued support and maintenance from the original developer, or the significant cost and risk associated with migrating to a different system. The specific FAR citation would be required for a definitive answer.

How does the $27.17 million contract value compare to previous Compuware software spending by SSA?

The provided data indicates this is a recompete valued at $27,173,766.65 with a duration of 729 days (approximately 2 years). To compare with previous spending, we would need historical data on prior contracts for the same or similar Compuware software. If this represents a renewal or extension, an increase or decrease in the annual cost could indicate changes in pricing, scope, or market conditions. For instance, if previous annual spending was significantly lower, this recompete might represent a price increase. Conversely, if it's higher, it could reflect expanded scope or inflation. Without historical data, a direct comparison of value trends is not possible, but the magnitude suggests a substantial ongoing investment in this software.

What are the potential risks associated with relying on a single vendor for critical software like this?

Relying on a single vendor for critical software presents several risks. Firstly, there's the risk of vendor lock-in, where the government becomes heavily dependent on the vendor's technology, making it difficult and costly to switch to alternatives. This can lead to reduced bargaining power and potentially higher prices over time. Secondly, there's the risk of vendor viability; if the vendor faces financial difficulties, is acquired, or discontinues the product, the government could face significant disruption. Thirdly, the vendor might prioritize other clients or markets, potentially impacting service levels or support responsiveness. Finally, without competition, there's less incentive for the vendor to innovate or offer competitive pricing, potentially leading to suboptimal value for the government.

Are there any performance metrics or service level agreements (SLAs) associated with this contract?

The provided data does not include details on performance metrics or Service Level Agreements (SLAs) for this contract. Typically, government contracts, especially for software and IT services, include clauses that define expected performance standards, uptime requirements, response times for support, and remedies for non-performance. These SLAs are crucial for ensuring the vendor meets the government's needs and for holding them accountable. The absence of this information in the summary data suggests it might be detailed within the full contract document. Without these specifics, it's difficult to assess the level of accountability and the quality of service expected from Compuware Corporation.

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: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 31440 NORTHWESTERN HWY, FARMINGTON HILLS, MI, 48334

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $57,766,170

Exercised Options: $27,173,767

Current Obligation: $27,173,767

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F5337H

IDV Type: FSS

Timeline