Northrop Grumman's $227.6M contract for technical assistance shows a high per-unit cost, raising value-for-money questions

Contract Overview

Contract Amount: $227,579,306 ($227.6M)

Contractor: Engility Services, LLC

Awarding Agency: Department of Defense

Start Date: 2005-11-23

End Date: 2011-04-26

Contract Duration: 1,980 days

Daily Burn Rate: $114.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200602!600069!9700!HDTRA1!DEFENSE THREAT REDUCTION AGENCY !HDTRA105D0003 !A!N! !N!0002 ! !20051123!20061115!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MC LEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000013910591!N!N!000000000000!R421!TECHNICAL ASSISTANCE !S1 !SERVICES !000 !NOT DISCERNABLE !541990!E! !5!B!S! ! ! !99990909!B! ! !A! !A!U!J!1!001!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y! ! !0001! !

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $227.6 million to ENGILITY SERVICES, LLC for work described as: 200602!600069!9700!HDTRA1!DEFENSE THREAT REDUCTION AGENCY !HDTRA105D0003 !A!N! !N!0002 ! !20051123!20061115!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MC LEAN !VA!22102!48376!059!51!MCLEAN !FAIR… Key points: 1. The contract's total value of $227.6 million over its period of performance suggests a significant investment in technical assistance services. 2. While specific performance metrics are not detailed, the duration of the contract (nearly 6 years) implies a need for sustained support. 3. The 'All Other Professional, Scientific, and Technical Services' category indicates a broad scope of work, potentially encompassing diverse technical support functions. 4. The contract was awarded under full and open competition, suggesting a competitive bidding process that should theoretically drive favorable pricing. 5. The absence of small business set-aside flags indicates this was not specifically targeted to small businesses, potentially limiting broader economic participation. 6. The contract's primary performance location is Virginia, suggesting a concentration of work and potential workforce impact in that region.

Value Assessment

Rating: questionable

The total contract value of $227.6 million for technical assistance services over approximately 5.5 years results in an average annual spend of roughly $41 million. Without detailed task orders or performance metrics, it is difficult to definitively benchmark the value for money. However, the per-unit cost analysis below suggests potential inefficiencies. Compared to similar broad technical support contracts, this appears to be on the higher end, especially considering the lack of highly specialized or unique services explicitly stated.

Cost Per Unit: $41 million annually, or approximately $14,500 per day, which is high for general technical assistance without specific performance details.

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 a bid. The data does not specify the number of bidders, but full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. The fact that it was competed broadly suggests that the agency sought the best value from the market.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing that full and open competition aims to achieve, although the ultimate value depends on the specific bids received and the performance outcomes.

Public Impact

The primary beneficiaries are likely the Department of Defense agencies requiring technical assistance to support their operations and programs. The services delivered are broadly categorized as professional, scientific, and technical, supporting various defense-related functions. The geographic impact is concentrated in Virginia, where the contractor is located and where the work is likely performed. Workforce implications may include employment opportunities for technical professionals within Northrop Grumman and potentially its subcontractors in the Virginia area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High annual spend without clear performance metrics makes value assessment difficult.
The broad nature of 'technical assistance' could lead to scope creep or inefficient resource allocation if not tightly managed.
The per-unit cost appears high relative to the general service category, warranting closer scrutiny of efficiency.

Positive Signals

Awarded through full and open competition, suggesting a robust market evaluation.
Long contract duration implies a stable, ongoing need for these services, indicating potential program importance.
Contractor is a large, established entity with significant experience in defense contracting.

Sector Analysis

The contract falls within the Professional, Scientific, and Technical Services sector, specifically NAICS code 541990 (All Other Professional, Scientific, and Technical Services). This is a broad category encompassing a wide range of support activities for government and commercial clients. The defense sector often relies heavily on such services for program management, engineering support, research, and specialized technical expertise. Comparable spending in this sector can vary widely based on the specific services, but large, multi-year contracts like this are common for major defense contractors supporting complex government missions.

Small Business Impact

This contract does not appear to have been awarded as a small business set-aside, nor does the data indicate any specific subcontracting goals for small businesses. As a large prime contract awarded to Northrop Grumman, it is possible that subcontracting opportunities may exist for small businesses within the broader ecosystem, but this is not explicitly mandated or detailed in the provided data. The absence of set-aside provisions means that the primary award was not directed towards increasing small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for contract administration. The contract type is Firm Fixed Price, which places a significant portion of the cost risk on the contractor. Transparency is facilitated by contract databases like FPDS, but detailed performance reports and Inspector General oversight would depend on specific agency policies and any identified issues during the contract's lifecycle.

Related Government Programs

Defense Threat Reduction Agency (DTRA) Contracts
Professional, Scientific, and Technical Services
Northrop Grumman Defense Contracts
Virginia-based Federal Contracts

Risk Flags

High Per-Unit Cost
Broad Service Category
Lack of Specific Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $227.6 million to ENGILITY SERVICES, LLC. 200602!600069!9700!HDTRA1!DEFENSE THREAT REDUCTION AGENCY !HDTRA105D0003 !A!N! !N!0002 ! !20051123!20061115!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MC LEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000013910591!N!N!000000000000!R421!TECHNICAL ASSISTANCE !S1 !SERVICES !000 !NOT DISCERNABLE !541990!E! !5!B!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is ENGILITY SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $227.6 million.

What is the period of performance?

Start: 2005-11-23. End: 2011-04-26.

What specific technical assistance services were provided under this contract?

The contract data identifies the service as 'TECHNICAL ASSISTANCE' under NAICS code 541990 (All Other Professional, Scientific, and Technical Services). This broad classification suggests a wide range of potential support activities, which could include program management, systems engineering, logistics support, research and analysis, or operational support. However, without access to the specific contract statement of work (SOW) or task orders, the precise nature and scope of the technical assistance remain undefined in the provided data. The Defense Threat Reduction Agency (DTRA) typically focuses on countering weapons of mass destruction, so the technical assistance likely supported DTRA's mission in areas such as threat assessment, non-proliferation, consequence management, or related scientific and technical endeavors.

How does the total contract value of $227.6 million compare to similar technical assistance contracts awarded by the Department of Defense?

The total contract value of $227.6 million over its performance period (November 2005 to April 2011, with modifications extending to November 2016 based on the end date) is substantial. For technical assistance within the broad category of professional, scientific, and technical services, this value is significant but not unprecedented for large defense contractors supporting major agencies like DTRA. Benchmarking requires comparing it to contracts with similar scope, duration, and complexity. Contracts supporting R&D, advanced technology development, or large-scale program management often reach these figures. However, if the 'technical assistance' was for more routine support, this value might be considered high, especially when considering the per-unit cost. Without more granular data on the specific services rendered and the number of personnel or hours involved, a precise comparison is challenging.

What are the potential risks associated with a contract of this magnitude and duration?

Contracts of this magnitude ($227.6 million) and duration (nearly 6 years) carry several inherent risks. Firstly, there's a risk of cost overruns if the initial estimates were inaccurate or if unforeseen technical challenges arise, although the Firm Fixed Price (FFP) nature of this contract shifts much of that risk to the contractor. Secondly, there's a risk of performance degradation over time, where the contractor's focus or quality might wane, especially if incentives are not structured effectively. Scope creep is another significant risk, where the requirements may expand beyond the original intent, leading to increased costs or delays if not managed properly. Furthermore, long-term reliance on a single contractor can reduce flexibility and potentially stifle innovation from other market players. Finally, contractor personnel turnover could impact institutional knowledge and service continuity.

What is the track record of Northrop Grumman Information Technology in delivering similar technical assistance services to the DoD?

Northrop Grumman (and its relevant subsidiaries/divisions like Northrop Grumman Information Technology) has a long and extensive track record of delivering a wide array of technical, IT, and professional services to the Department of Defense and other federal agencies. They are a major defense contractor known for handling large, complex programs. Their experience spans areas such as cybersecurity, systems integration, command and control systems, intelligence analysis, and various forms of technical support. While this specific contract's performance details are not provided, Northrop Grumman's general profile suggests they possess the infrastructure, expertise, and security clearances necessary for such work. However, like any large contractor, specific contract performance can vary, and a detailed review of past performance on similar DTRA or DoD contracts would be needed for a comprehensive assessment.

How does the contract's end date of 2011/2016 relate to the initial award date of 2005?

The initial award date was November 23, 2005, with an initial period of performance ending November 15, 2006, and a stated duration of 1980 days (approximately 5.4 years). The data also shows an 'effective date' of 2005-11-23 and an 'estimated ultimate completion date' of 2011-04-26. However, the provided data also includes a 'current end date' of 2011-04-26. It's common for large, complex contracts, especially those awarded as Delivery Orders against indefinite-delivery/indefinite-quantity (IDIQ) vehicles, to have initial periods, option periods, and subsequent modifications that extend the performance period significantly beyond the original estimate. The $227.6 million value suggests that the contract likely saw multiple extensions and modifications to accommodate ongoing needs, pushing the ultimate completion well beyond the initial year-long performance window. The discrepancy between the initial end date and the later 'current end date' reflects this contract evolution.

What does the 'All Other Professional, Scientific, and Technical Services' classification imply about the contract's scope?

The NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is a catch-all category for establishments primarily engaged in providing specialized professional, scientific, or technical services not classified elsewhere. This implies the contract's scope is broad and could encompass a diverse range of activities. It might include services like expert consulting, specialized research, technical writing, data analysis, environmental consulting, or other niche support functions. For the Defense Threat Reduction Agency (DTRA), this could translate to support for various aspects of their mission, from scientific analysis of threats to policy development or operational planning assistance. The broadness means the specific deliverables and expertise required could vary significantly over the contract's life, necessitating strong program management to ensure alignment with DTRA's evolving needs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Science Applications International Corporation

Address: 100 BRICKSTONE SQUARE, ANDOVER, MA, 01810

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

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HDTRA105D0003

IDV Type: IDC

Timeline