DoD's $101.5M contract for engineering services awarded to Northrop Grumman Information Technology Inc
Contract Overview
Contract Amount: $101,514,091 ($101.5M)
Contractor: Northrop Grumman Information Technology Inc
Awarding Agency: Department of Defense
Start Date: 2004-06-18
End Date: 2009-12-31
Contract Duration: 2,022 days
Daily Burn Rate: $50.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200409!007060!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP002 !A!N! !Y!0035 ! !20040618!20061031!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000001823908!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!E! !5!B!M! !A! !99990909!B! ! !A! !A!N!U!2!004!B! !C!N!Z! ! !N!C!N! ! ! !D!D!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $101.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200409!007060!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP002 !A!N! !Y!0035 ! !20040618!20061031!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIR… Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract value of over $101 million indicates a significant investment in engineering services. 3. Northrop Grumman Information Technology Inc. is a large, established contractor with a substantial presence. 4. The contract duration of over 5 years suggests a long-term need for these services. 5. The primary service category is engineering and technical services, vital for complex defense systems. 6. The contract was awarded by the Department of the Army, a major component of the DoD.
Value Assessment
Rating: fair
The contract value of $101.5 million for engineering services over approximately 5.5 years appears substantial. Benchmarking this against similar large-scale engineering support contracts within the Department of Defense is challenging without more specific service details. However, the duration and scope suggest a significant investment. The firm fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the price was competitive.
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 4 bidders suggests a moderate level of competition for this significant engineering services contract. A higher number of bidders typically leads to more competitive pricing and a wider range of technical solutions, but 4 bidders can still yield a good outcome for price discovery.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve the quality of services received.
Public Impact
The primary beneficiaries are likely the Department of the Army and potentially other Department of Defense entities requiring advanced engineering and technical support. Services delivered include engineering and technical services, crucial for the development, maintenance, and modernization of defense systems. The geographic impact is primarily within the United States, with potential for deployment or support activities related to Army operations globally. Workforce implications include the employment of engineers, technicians, and support staff by Northrop Grumman Information Technology Inc. and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if the firm fixed-price contract was not adequately scoped.
- Dependence on a single large contractor for critical engineering services could pose a risk.
- The specific technical expertise required may limit the pool of qualified bidders in future competitions.
Positive Signals
- Awarded under full and open competition, indicating a broad search for qualified contractors.
- Firm fixed-price contract structure shifts cost risk to the contractor.
- Northrop Grumman is a well-established defense contractor with a proven track record.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader Information Technology and Defense industries. The market for defense engineering services is substantial, driven by the continuous need for modernization and maintenance of complex military systems. Comparable spending benchmarks would typically involve other large-scale engineering support contracts awarded by the Department of Defense or its branches for similar types of technical expertise and duration.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by the 'ss' field being false. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large prime contractor like Northrop Grumman suggests that subcontracting opportunities for small businesses may depend on the prime's own subcontracting strategy and the specific technical requirements of the engineering services.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring Northrop Grumman to deliver specified services within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available.
Related Government Programs
- Department of Defense Engineering Services
- Army Command, Control, Communications, Computers, and Intelligence (C4I) Systems
- Northrop Grumman Defense Contracts
- Information Technology Support Services
- Defense Research and Development Support
Risk Flags
- Contract duration exceeds 5 years, increasing potential for cost escalation or obsolescence.
- Firm Fixed Price contract requires careful monitoring to ensure contractor performance and prevent cost overruns.
- Limited public detail on specific performance metrics and outcomes.
Tags
department-of-defense, department-of-the-army, engineering-services, northrop-grumman, firm-fixed-price, full-and-open-competition, large-contract, information-technology, virginia, defense-contractor, technical-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $101.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200409!007060!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP002 !A!N! !Y!0035 ! !20040618!20061031!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000001823908!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!E! !5!B!M! !A! !999
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 $101.5 million.
What is the period of performance?
Start: 2004-06-18. End: 2009-12-31.
What specific engineering disciplines and technical capabilities were required under this contract?
The provided data indicates the contract was for 'ENGINEERING TECHNICAL SERVICES' and falls under the Product Service Code (PSC) 'R425' (Engineering and Technical Services). While the specific disciplines are not detailed, this typically encompasses a broad range of expertise including systems engineering, software engineering, hardware engineering, test and evaluation, integration, and lifecycle support for complex electronic and communication equipment. Given the contractor, Northrop Grumman Information Technology Inc., the services likely involved advanced IT integration, cybersecurity engineering, and potentially support for command, control, communications, computers, and intelligence (C4I) systems critical to Army operations.
How does the awarded price of $101.5 million compare to similar engineering services contracts for the Department of the Army?
Directly comparing the $101.5 million award to similar contracts is difficult without more granular data on the specific services rendered, duration, and scope. However, for large-scale, multi-year engineering support contracts within the Department of the Army, this value is substantial but not extraordinary, especially considering the prime contractor's size and the complexity of defense systems. Contracts for major system development, sustainment, or modernization can easily reach or exceed this figure. The firm fixed-price nature suggests a defined scope was agreed upon, which aids in assessing value if performance metrics are met.
What is Northrop Grumman Information Technology Inc.'s track record with similar large-scale engineering contracts?
Northrop Grumman Information Technology Inc. (now part of Northrop Grumman Corporation) has a long and extensive history of performing large-scale engineering, IT, and defense-related contracts for the U.S. government, including the Department of Defense and the Department of the Army. They are a major defense contractor known for handling complex systems integration, software development, and technical support services. Their track record typically involves managing significant budgets, large workforces, and delivering critical capabilities across various defense platforms and programs. Past performance reviews and contract databases would offer more specific insights into their success rates and any past issues.
What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?
While firm fixed-price (FFP) contracts are generally favored for cost control, risks exist, especially for long-duration contracts like this one (over 5 years). The primary risk is that the initial price may not accurately account for unforeseen technical challenges, scope creep (if not managed tightly), or significant changes in market conditions (e.g., labor costs, material prices) over the contract period. If the contractor underestimated costs or encountered unexpected difficulties, they could face reduced profit margins or even losses. Conversely, if the contractor significantly overestimates costs, taxpayers may end up paying a premium. Effective contract management and change control are crucial to mitigate these risks.
How does the competition level (4 bidders) impact the overall value and risk for this contract?
Having 4 bidders for a contract of this size and nature suggests a reasonably competitive environment. This level of competition generally provides the government with a good selection of qualified offerors and encourages competitive pricing. It reduces the risk of awarding the contract to a single source without adequate market vetting. While more bidders could potentially drive prices lower, 4 is often considered a healthy number for complex technical services, balancing competition with the need for specialized expertise. The value is enhanced if the selection process rigorously evaluated both technical merit and price, ensuring the best overall value was obtained.
What is the significance of the PSC code 'R425' and NAICS code '541330' in understanding this contract's purpose?
The Product Service Code (PSC) 'R425' signifies 'Engineering and Technical Services,' indicating the core nature of the work involves providing specialized engineering expertise, analysis, and technical support. The North American Industry Classification System (NAICS) code '541330' represents 'Engineering Services,' which further categorizes the contractor's primary business activity related to this award. Together, these codes confirm the contract's focus on professional engineering services, likely encompassing design, development, testing, integration, and sustainment support for defense systems or related infrastructure, rather than the manufacturing or direct procurement of equipment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
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: $107,714,482
Exercised Options: $107,714,482
Current Obligation: $101,514,091
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAB0702DP002
IDV Type: IDC
Timeline
Start Date: 2004-06-18
Current End Date: 2009-12-31
Potential End Date: 2009-12-31 00:00:00
Last Modified: 2015-04-23
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