DoD's $54M REMIS sustainment contract awarded to Northrop Grumman without competition

Contract Overview

Contract Amount: $53,948,019 ($53.9M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2010-02-01

End Date: 2014-07-31

Contract Duration: 1,641 days

Daily Burn Rate: $32.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: IT

Official Description: REMIS SUSTAINMENT TASK ORDER

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45430, UNITED STATES OF AMERICA

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $53.9 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: REMIS SUSTAINMENT TASK ORDER Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Lack of competition raises concerns about price reasonableness and value for money. 3. Contract duration of over 4 years suggests a long-term reliance on a single provider. 4. The 'Other Computer Related Services' NAICS code is broad, potentially masking specific service details. 5. Awarded by the Department of the Air Force, highlighting a significant defense IT investment. 6. The contract was not competed, suggesting potential sole-source justifications or a lack of market research.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and detailed service descriptions. The cost-plus-fixed-fee structure, while common for complex IT services, can lead to higher costs compared to fixed-price contracts if not managed diligently. Without comparable contract data or a competitive process, it's difficult to definitively assess if the government received fair market value for the REMIS sustainment services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating it was not subject to a full and open competition. This suggests that either a sole-source justification was made, or the contract was awarded under specific circumstances that precluded competition. The lack of multiple bidders means there was no direct price comparison or market pressure to drive down costs, potentially leading to a higher price for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as there was no mechanism to ensure the lowest possible price was secured.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives sustainment for its REMIS system. Services delivered include IT support and maintenance for the REMIS system, crucial for its operational effectiveness. The geographic impact is likely concentrated within Air Force installations where REMIS is utilized. Workforce implications include the employment of IT professionals by Northrop Grumman to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
Limited transparency on specific service delivery metrics due to non-competitive award.

Positive Signals

Northrop Grumman is a large, established defense contractor with significant experience.
Sustainment of critical IT systems like REMIS is vital for military operations.
The contract duration suggests a stable, long-term support arrangement.

Sector Analysis

The IT services sector, particularly within defense, is characterized by large, complex contracts often awarded to major prime contractors. The market for specialized IT sustainment services can be concentrated, but a lack of competition for a contract of this size and duration warrants scrutiny. Comparable spending benchmarks for similar IT sustainment contracts within the DoD could provide further context on pricing and value.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. The award to a large prime contractor like Northrop Grumman suggests that opportunities for small businesses may be limited unless they are direct subcontractors, which is not specified here.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Air Force's contracting officers and program managers. Accountability measures would be tied to the terms and conditions of the cost-plus-fixed-fee contract, including reporting requirements and performance standards. Transparency is limited due to the non-competitive nature of the award; however, contract modifications and payment data would likely be publicly available through federal procurement databases.

Related Government Programs

Defense IT Modernization Programs
Air Force Logistics and Readiness Systems
Enterprise Resource Planning (ERP) System Support
IT Infrastructure Sustainment Contracts

Risk Flags

Lack of Competition
Cost-Plus Contract Type
Broad NAICS Code

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.9 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. REMIS SUSTAINMENT TASK ORDER

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $53.9 million.

What is the period of performance?

Start: 2010-02-01. End: 2014-07-31.

What is the specific function and importance of the REMIS system within the Department of the Air Force?

The REMIS (Readiness, Equipment, Maintenance, and Installation System) is a critical information system used by the Department of the Air Force. Its primary function is to manage and track readiness, equipment status, maintenance schedules, and installation data across various Air Force assets. The system is vital for ensuring operational readiness, optimizing resource allocation, and supporting maintenance planning and execution. Effective sustainment of REMIS is therefore crucial for maintaining the Air Force's ability to deploy and operate its equipment efficiently and reliably.

What are the typical justifications for awarding a contract on a 'NOT COMPETED' basis, and were they likely met in this case?

Contracts are typically awarded on a 'NOT COMPETED' basis when only one responsible source is available or when the government's need is of such a nature that urgency, proprietary restrictions, or other factors preclude full and open competition. Common justifications include unique capabilities, essential follow-on work to a previously competed contract where another contractor cannot perform, or specific national security requirements. For this REMIS sustainment contract, potential justifications could have included unique knowledge of the system held by Northrop Grumman, or a critical, time-sensitive need for sustainment that could not be met through a competitive process. However, without specific documentation, it's difficult to confirm if these justifications were definitively met.

How does the 'COST NO FEE' (or Cost Plus Fixed Fee - CPFF) contract type typically impact cost control and value for money compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type, indicated by 'pt': 'COST NO FEE' (likely a typo for CPFF or similar cost-reimbursement structure), allows the contractor to recover all allowable costs plus a fixed fee representing profit. This structure is often used for research and development or complex services where the scope is not well-defined. While it provides flexibility and ensures the contractor is compensated for unforeseen costs, it offers less incentive for cost efficiency compared to fixed-price contracts. The government bears the risk of cost overruns, and rigorous oversight is essential to ensure costs remain reasonable and that the fixed fee adequately compensates the contractor for the effort.

What is the significance of the NAICS code '541519' (Other Computer Related Services) in understanding the scope of this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad classification that encompasses a wide range of IT services not specifically covered by other codes. This includes services like computer facilities management, IT support, disaster recovery services, and software installation services. For this contract, it suggests that the REMIS sustainment likely involved a combination of IT support, maintenance, and potentially minor enhancements or troubleshooting. However, the generality of the code means that the specific deliverables and technical scope are not immediately apparent without further detail from the contract itself.

What does the contract duration of 1641 days (approximately 4.5 years) imply about the nature of the REMIS sustainment services?

A contract duration of approximately 4.5 years for IT sustainment suggests that the REMIS system requires ongoing, long-term support rather than a short-term fix. This implies that the system is critical to the Air Force's operations and that its maintenance, updates, and operational readiness are a continuous requirement. Such a long duration also indicates a significant investment in maintaining the system's functionality and security over an extended period, potentially involving regular software patches, hardware upkeep, and user support.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $61,099,660

Exercised Options: $53,974,019

Current Obligation: $53,948,019

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA877010D0001

IDV Type: IDC

Timeline