DoD's $38.7M IT contract for custom programming services awarded to Northrop Grumman Information Technology Inc

Contract Overview

Contract Amount: $38,714,701 ($38.7M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2009-01-13

End Date: 2012-04-18

Contract Duration: 1,191 days

Daily Burn Rate: $32.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: LABOR - PDSS

Place of Performance

Location: CARSON, LOS ANGELES County, CALIFORNIA, 90746, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $38.7 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: LABOR - PDSS Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 1191 days (over 3 years) indicates a significant, long-term IT service requirement. 3. Northrop Grumman Information Technology Inc. is a large, established contractor with extensive experience in government IT. 4. The contract type is Time and Materials, which can carry cost risks if not managed closely. 5. The contract was awarded to a single entity, but the initial competition was broad. 6. The North American Industry Classification System (NAICS) code 541511 points to specialized custom computer programming services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. However, the total award amount of $38.7 million over approximately three years for custom computer programming services falls within a typical range for large-scale IT projects. The Time and Materials (T&M) contract type introduces inherent risk for cost overruns if not meticulously managed and monitored by the agency. Without comparative data on similar custom programming projects from the Department of Defense or other agencies, a precise value-for-money assessment is difficult, but the scale suggests a substantial investment in specialized IT capabilities.

Cost Per Unit: N/A

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 bids. The presence of 16 bids suggests a robust competitive environment for this requirement. A high number of bidders generally promotes price discovery and can lead to more favorable pricing for the government. The fact that the award went to Northrop Grumman Information Technology Inc. among these bidders implies they offered the most advantageous proposal based on the evaluation criteria.

Taxpayer Impact: The broad competition for this contract likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition scenario. This ensures that taxpayer funds are used more efficiently by leveraging market forces.

Public Impact

The Department of Defense benefits from specialized custom computer programming services to support its complex IT infrastructure. This contract likely supports critical defense operations and information systems. The geographic impact is primarily within the Department of the Army's operational areas, potentially nationwide or global depending on the system's reach. The workforce implications include employment for skilled IT professionals, likely concentrated within Northrop Grumman's operations and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely monitored.
Lack of specific performance metrics makes it difficult to fully assess value for money.
Reliance on a single large contractor for critical IT services could pose long-term dependency risks.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Received 16 bids, suggesting significant market interest and potential for competitive pricing.
Contract awarded to a well-established IT services provider with a track record in government contracting.

Sector Analysis

The Information Technology sector, specifically custom computer programming services (NAICS 541511), is a critical component of modern government operations. This contract fits within the broader IT services market, which is characterized by rapid technological advancements and a high demand for specialized skills. The Department of Defense is a major consumer of IT services, with spending often focused on maintaining and upgrading complex legacy systems, developing new defense technologies, and ensuring cybersecurity. Comparable spending benchmarks for custom IT development projects of this scale can vary widely based on complexity, duration, and specific technologies involved.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a small business set-aside designation (ss: false, sb: false). Therefore, the primary contract was not specifically reserved for small businesses. However, large prime contractors like Northrop Grumman are often required to meet subcontracting goals for small businesses. The extent to which small businesses will benefit depends on the subcontracting plan developed by Northrop Grumman and the specific opportunities available within the project's scope.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Defense Information Systems Agency (DISA) IT Contracts
Army Command, Control, Communications, Computers, and Information Management (C4IM) Programs
Custom Software Development Services
IT Services for National Security

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Scope creep risk in custom development projects.
Dependence on contractor performance for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.7 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. LABOR - PDSS

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 Army).

What is the total obligated amount?

The obligated amount is $38.7 million.

What is the period of performance?

Start: 2009-01-13. End: 2012-04-18.

What was the specific nature of the custom computer programming services provided under this contract?

The contract, NAICS 541511, specifies 'Custom Computer Programming Services.' While the data does not detail the exact applications or systems, this generally involves designing, developing, and implementing software tailored to the unique needs of the Department of the Army. This could range from developing new defense-specific applications, modifying existing software to meet evolving requirements, integrating disparate systems, or providing specialized programming expertise for complex defense IT infrastructure. The 'PDSS' in the 'LABOR' field might indicate a specific program or system name, such as 'Program Development and Support Services' or a system acronym, which would further define the scope of the programming work.

How does the $38.7 million award compare to other similar IT contracts within the Department of Defense?

The $38.7 million total award for custom computer programming services over approximately three years is a substantial but not extraordinary figure for the Department of Defense. Large federal agencies, particularly DoD, frequently award IT contracts in the tens to hundreds of millions of dollars due to the complexity and scale of their operations. For instance, contracts for enterprise resource planning (ERP) systems, cybersecurity solutions, or major software development initiatives can easily exceed this amount. However, compared to smaller, more focused IT support contracts or procurements for commercial off-the-shelf (COTS) software, this award represents a significant investment in bespoke IT development.

What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude?

The primary risk with a Time and Materials (T&M) contract, especially one valued at $38.7 million, is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials. If the scope of work is not precisely defined, or if project timelines extend beyond initial estimates, costs can escalate significantly. Effective oversight, rigorous monitoring of labor hours and material usage, and clear task definitions are crucial to mitigate these risks. The government must ensure that the contractor is efficient and that the work performed directly aligns with the contract's objectives to prevent unnecessary expenditure.

What does the number of bidders (16) suggest about the market for custom computer programming services for the DoD?

The fact that 16 bids were received for this contract indicates a healthy and competitive market for custom computer programming services relevant to the Department of Defense. This suggests that multiple companies possess the capability and interest to undertake large-scale, specialized IT projects for the military. A robust bidding process like this typically benefits the government by fostering competition, which can drive down prices and encourage innovation. It also provides the government with a wider range of options and expertise to choose from, increasing the likelihood of selecting a contractor that offers the best value and technical solution.

What is the significance of Northrop Grumman Information Technology Inc. being the awardee?

Northrop Grumman Information Technology Inc. is a major defense contractor with extensive experience in providing IT services to government agencies, including the Department of Defense. Their selection as the awardee for this $38.7 million contract suggests they were deemed to offer the best overall value proposition based on the criteria outlined in the solicitation. This could include technical approach, past performance, management capability, and price. For the DoD, awarding to a large, established contractor like Northrop Grumman often implies a degree of confidence in their ability to execute complex projects, manage risks, and deliver required services reliably, although it also necessitates diligent oversight.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91QUZ05R0004

Offers Received: 16

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DRIVE, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,480,732

Exercised Options: $40,480,732

Current Obligation: $38,714,701

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W91QUZ07D0005

IDV Type: IDC

Timeline