DoD Awards Northrop Grumman $78M for Engineering Services, Raising Value Concerns
Contract Overview
Contract Amount: $78,351,051 ($78.4M)
Contractor: Northrop Grumman Information Technology Inc
Awarding Agency: Department of Defense
Start Date: 2004-09-29
End Date: 2009-09-29
Contract Duration: 1,826 days
Daily Burn Rate: $42.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: 200412!009184!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP002 !A!N! !Y!0038 ! !20040929!20061031!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000000213160!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!E! !5!B!M! !A! !99990909!B! ! !A! !A!N!Y!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 $78.4 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200412!009184!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP002 !A!N! !Y!0038 ! !20040929!20061031!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIR… Key points: 1. Contract value of $78.35M awarded to Northrop Grumman for engineering services. 2. Competition was full and open, but the contract type (Time and Materials) may inflate costs. 3. Risk of cost overruns due to Time and Materials contract type and a relatively long duration. 4. Sector: Defense, specifically engineering and communication equipment support.
Value Assessment
Rating: questionable
The contract value of $78.35M for engineering services appears high, especially considering the 5-year duration. Benchmarking against similar contracts for engineering and technical services is crucial to assess if this represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the Time and Materials (T&M) contract type can lead to cost escalation if not closely monitored, potentially negating some benefits of competition.
Taxpayer Impact: The T&M contract type presents a risk to taxpayers if not managed effectively, as costs can increase beyond initial estimates without a fixed ceiling.
Public Impact
Taxpayers may face higher costs than anticipated due to the T&M contract structure. The long contract duration (5 years) could lead to scope creep or evolving requirements that increase overall spending. Defense readiness could be impacted if the engineering services are critical and face delays or cost overruns.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials contract type
- Long contract duration (5 years)
- High contract value for engineering services
Positive Signals
- Full and open competition
- Established contractor (Northrop Grumman)
Sector Analysis
This contract falls within the Defense sector, specifically supporting engineering and communication equipment. Spending in this area is often driven by modernization and maintenance needs, with benchmarks varying widely based on technology and service scope.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Large prime contractors like Northrop Grumman typically manage subcontracts, and the extent of small business participation is not detailed here.
Oversight & Accountability
Oversight would typically be managed by the Department of Defense, likely through the Defense Contract Management Agency. Effective oversight is critical for T&M contracts to control costs and ensure deliverables meet requirements.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to Time and Materials contract type.
- Long contract duration increases risk exposure.
- Lack of specific performance metrics in the provided data.
- High contract value requires diligent oversight.
Tags
engineering-services, department-of-defense, va, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $78.4 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200412!009184!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP002 !A!N! !Y!0038 ! !20040929!20061031!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000000213160!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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $78.4 million.
What is the period of performance?
Start: 2004-09-29. End: 2009-09-29.
What is the estimated cost per labor hour or equivalent metric for this contract, and how does it compare to industry benchmarks for similar engineering services?
The provided data does not include a per-unit cost metric like labor hour rates. To assess value, a detailed analysis of the contractor's proposed rates against government estimates and market research for comparable engineering services would be necessary. Without this, it's difficult to definitively benchmark the pricing.
What specific performance metrics or milestones are in place to mitigate the risks associated with a Time and Materials contract over a 5-year period?
The data does not specify performance metrics or milestones. For a T&M contract of this duration, robust oversight mechanisms, clear performance standards, and regular reviews are essential. The government should have defined deliverables and quality assurance procedures to ensure the contractor meets objectives and prevent cost overruns.
How effectively has Northrop Grumman historically delivered similar engineering and technical services under government contracts, and what is their track record regarding cost control?
Assessing Northrop Grumman's historical performance requires access to past performance reviews and contract data. While they are a large, established contractor, specific details on their cost control effectiveness for similar T&M contracts are not provided. A review of their past performance ratings would be crucial for a comprehensive risk assessment.
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
Offers Received: 4
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
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAB0702DP002
IDV Type: IDC
Timeline
Start Date: 2004-09-29
Current End Date: 2009-09-29
Potential End Date: 2009-09-29 00:00:00
Last Modified: 2015-09-09
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