Social Security Administration Analyses of Service Contracts - Fiscal Year 2011

Background

The Consolidated Appropriations Act, 2010, Public Law 111-117, requires civilian agencies to prepare an annual inventory of their service contracts and to analyze the inventory to determine if the mix of Federal employees and contractors is effective or if rebalancing is necessary. The Office of Management and Budget’s (OMB) Service Contract Inventories memorandum dated December 19, 2011, provides guidance for developing the service contract inventory and analysis. As required, we completed our fiscal year (FY) 2011 service contract inventory by December 30, 2011 and posted it on our website at http://www.socialsecurity.gov/sci/.

Special Interest Function

Per OMB guidance, we identified three special interest functions for analysis in FY 2012. The functions and the obligated dollar amounts are as follows:

Product and Service Codes (PSC)
FY 2011 Obligated Amount
Number of Contracts Reviewed
Percentage of Contract Dollars within the PSC
S201 - Custodial Janitorial Services
$24,051,201
4
80%
S206 - Guard Services
$39.955,392
3
85%
B599 - Other Special Studies and Analyses
$22,900,976
1
98%

We selected these three PSCs based on the criteria below:

  • We considered PSCs with larger amounts of dollars obligated.
  • We considered generic type of PSCs because these codes can be catch alls for functions not typically contracted.
  • We considered management support service contracts as part of the effort to reduce the amount of these types of contracts. However, of the two PSCs under this category in our standard inventory summary, we analyzed one last year and the dollars obligated under the second was minimal.
  • We eliminated from consideration PSCs previously analyzed.

Methodology

An agency team conducted an analysis of specific contracts within the special interest PSCs. The analysis included a review of the contract file, as well as interviews with the contracting officer, the contracting officer technical representative (COTR), and other personnel responsible for contract oversight. In accordance with OMB’s guidance, our review covered the following six items to ensure:

  1. Each personal service contract in the inventory has been entered into, and is being performed, in accordance with applicable laws and regulations;
  2. The agency provides special management attention to functions closely associated with inherently governmental functions, in accordance with Federal Acquisition Regulations 37.114;
  3. The agency is not using contractor personnel to perform inherently governmental functions;
  4. The agency has specific safeguards in place to ensure that work performed by contractors has not changed or expanded during performance to become an inherently governmental function;
  5. The agency is not using contractor employees to perform critical functions in such a way that could affect the ability of the agency to maintain control of its mission and operations; and
  6. There are sufficient internal agency resources to manage and oversee contracts effectively.

To ensure compliance with the Consolidated Appropriations Act, 2010, our review also included the following questions:

  • Has the function been performed by Federal employees in the last 10 years?
  • Did we award the contract on a non-competitive basis?
  • Has the contractor performed poorly as determined by a contracting officer?
  • Is the contract cost effective?

Summary of Findings

A. S201 – Custodial Janitorial Services

We analyzed four contracts under PSC S201, covering custodial janitorial services at our headquarters facilities in Baltimore. Based on interviews with the COTR, other personnel in the requiring component, and the contracting officer, we determined the agency appropriately uses the contracts.

The work covered under these contracts are neither for personal services nor inherently governmental. Non performance by the contractors would not jeopardize the agency’s ability to complete its mission. In addition, we have adequate controls to ensure the contractors perform the work specified in the contracts. The agency’s COTR continues to monitor compliance with the contracts.

Recommendations for Balanced Workforce

We recommend continued contractor performance of the function for the following reasons:

  • Contractors perform this function government-wide;
  • The function is not inherently governmental or critical and therefore, in-house performance is not required;
  • The current contractors are performing satisfactorily; and
  • The agency has the means to quickly replace a contractor, if the need arises, for non performance.

B. S206 – Guard Services


We analyzed three contracts under PSC S206, which covers guard services at our headquarters facilities in Baltimore. Based on interviews with the COTR, other personnel in the requiring component, and the contracting officer, we determined the agency appropriately uses the contracts.

Recommendation for a Balanced Workforce

We recommend continued contractor performance of the function for the following reasons:

  • Contractors perform this function government-wide;
  • The function is not inherently governmental and therefore, in-house performance is not required;
  • The current contractors are performing satisfactorily; and
  • Though we consider the function critical, the agency has the means to quickly replace a contractor if the need arises for non-performance.

C. B599 – Other Special Studies and Analyses


We reviewed the research service contract for the Benefit Offset National Demonstration (BOND) contract. Section 302(a) of the Ticket to Work and Work Incentives Improvement Act of 1999 mandated that the Commissioner of Social Security conduct a demonstration project under which we reduce benefits by $1 for each $2 of beneficiary’s earnings that is above a level to be determined by the Commissioner. The original mandate of this demonstration project focused on beneficiaries receiving only Social Security Disability Insurance (SSDI) benefits. However, as the project progressed, we expanded the target population to include SSDI beneficiaries who concurrently received Supplemental Security Income benefits based on disability or blindness.

BOND will rigorously test several versions of a new program for SSDI and concurrent beneficiaries against status quo policies and against each other. Currently, beneficiaries lose their entire cash benefit if their earnings exceed the substantial gainful activity (SGA) in the month after the trial work period and grace period ends. The demonstration will allow earnings above this level, reducing benefits by $1 for each additional $2 earned over the SGA threshold; thereby eliminating the “cash cliff” currently in effect.

Recommendation for Balanced Workforce

We recommend continued contracting for the BOND research project for the following reasons:  
  • The function is not inherently governmental and therefore, in-house performance is not required;     
  • The current contractor is performing satisfactorily;     
  • The agency does not have the personnel or the expertise to conduct the research; and
  • This is the third year of the nine-year project. The required research is not a function that will continue after the project ends; therefore, hiring and training personnel to perform this specific research would not be advantageous to the government.

Concurrence

This report has the concurrence of the agency’s Senior Procurement Official and Chief Human Capital Officer.