Social Security Administration COVID-19 Contract Spending Analysis

Key Takeaways

• The Social Security Administration has spent almost $47 million to date for COVID-19 response contracts, 45% of which were awarded in the first half of June.
• Information Technology spending dominates the SSA’s contract spending, with $33 million of the $47 million in contracts going for IT needs. The remaining dollars are for Professional Services contracts.
• Five companies account for more than 95% of SSA’s COVID-19-related contract dollars to date. One firm accounts for more than 50% of the $46.6 million the SSA has awarded. This $24 million in awards is for IT and telecomm capabilities to enable and support teleworking among SSA personnel.

Social Security Administration COVID-19 Contract Spending

Taking a look at what the Social Security Administration (SSA) has reported for their contract obligations to date provides some insight into the contracts they have awarded so far, for what types of goods and services and with which companies. Contracted coronavirus response activities using the CARES Act and other pandemic-related stimulus funds are required to be flagged under the COVID-19 National Interest Action (NIA) in the Federal Procurement Data System (FPDS). This allows some visibility and oversight into how federal response dollars are being spent.

To date, the SSA has obligated $46.6 million over the last three and a half months, with about 45% of that coming in the first half of June, and another 30% coming in May. (See chart below.)

For the Primary Requirement for these contracts – the main type(s) of products and/or services being procured – the spending data shows that the SSA has been focusing on two main areas for their contracting. Information Technology (IT) contracting accounts for 70% and Professional Services (PS) contracts make up the remaining 30%.

The fact that SSA has spent the vast majority of their COVID-19 contracts on IT sets it apart from most other federal departments and agencies awarding contracts on pandemic response requirements. Most often, federal agencies have been focusing their response dollars on Medical and Scientific Equipment, Research and Development, Professional Services, Medical Services, and Architecture, Engineering and Construction (AEC) services. However, given SSA’s core mission and how the pandemic has impacted its operations the focus on IT and PS makes sense. (See chart below.)

Digging a little deeper to look at the most frequently used Product Service Codes (PSC) reported for SSA contract obligations so far indicates that the data aligns well to the Primary Requirement areas above. The top two PSCs carry more than $42 million of the $46.6 million to date – more than 90% of total obligations. The remaining seven PSCs account for the another $4.7 million or about 10%. (See chart below.)

Consistent with how the kinds of services and goods that the SSA has procured to date are very concentrated, the concentration of dollars around the number of awardees is highly concentrated – with the top five companies accounting for more than 95% of contract dollars to date. One firm, Avaya Federal accounts for nearly $24 million (>50%) of the $46.6 million the SSA has awarded to date. This $24 million in awards to Avaya is for IT and telecomm capabilities to enable teleworking among SSA personnel. The rest of the “top 10” awardees account for about $23 million or 49% of award dollars, with the remaining firms that have received awards in the Other grouping accounting for $140 thousand, which is less than 1% of SSA’s spending during this period. (See chart below.)

The Place of Performance (POP) where the SSA has been spending its COVID-19-related dollars is extremely concentrated with Maryland garnering more than 90% of SSA’s contract dollars to date. (See chart below.)

Where Preference Programs and set-asides to small businesses are concerned, the SSA has awarded more than $14.7 million or nearly 32% of these contract dollars via Small Business Set Asides and other Preference Program types. The majority of their contract obligations – about 63% – used no set asides and the remaining 5% did not report either way. (See chart below.)

While it appears on its face that the surge in the federal pandemic response seems to be plateauing, it is still too early to conclude that agencies will not continue to invest in IT capabilities and infrastructure to adjust to the sustained impacts of the pandemic on their continued operations. Efforts to ramp up capabilities under crisis may morph into modernization efforts to place the agency’s IT infrastructure on a firmer footing for the long term. If so, pandemic-related IT contracted spending could continue through the rest of FY 2020 and possibly beyond.