Defense IT contract awarded to Northrop Grumman for $12.3M, highlighting potential value and competition dynamics

Contract Overview

Contract Amount: $12,337,675 ($12.3M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2004-05-21

End Date: 2008-04-30

Contract Duration: 1,440 days

Daily Burn Rate: $8.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200408!001701!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0041 ! !20040521!20050520!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000010103479!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541519!E! !5!B!S! ! ! !99990909!B!E!N!A! !A!U!J!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! !JM0453!0001! !

Place of Performance

Location: ASHBY, MIDDLESEX County, MASSACHUSETTS, 01431

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200408!001701!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0041 ! !20040521!20050520!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000010103479!N!N!000000000000!… Key points: 1. Contract value of $12.3M suggests a significant investment in IT services. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. Northrop Grumman's established presence in defense contracting suggests a low performance risk. 4. The contract duration of 1440 days (4 years) points to a long-term service requirement. 5. The primary service category is Computer Systems Design, a critical area for defense operations. 6. The contract's classification as 'Other ADP & Telecommunication Services' provides broad scope.

Value Assessment

Rating: good

The contract value of $12.3 million over approximately four years appears reasonable for a large defense IT services contract. Benchmarking against similar large-scale IT support contracts within the Department of Defense would provide a more precise value-for-money assessment. However, the firm fixed-price structure generally favors the government by capping costs, suggesting a controlled expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit a bid. The presence of two bids (no: 2) indicates some level of competition, though the exact number of bidders could be higher. A limited number of bidders might suggest market concentration or specific technical requirements that narrowed the field.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards.

Public Impact

The primary beneficiary is the Department of Defense, receiving critical IT support services. Services delivered likely include computer systems design, integration, and potentially maintenance. The geographic impact is likely concentrated within defense information technology infrastructure, potentially nationwide or at specific military installations. Workforce implications may involve skilled IT professionals employed by Northrop Grumman and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) could indicate potential for reduced competition over time.
Contract duration of 4 years may not allow for frequent re-evaluation of market competitiveness.
Firm Fixed Price contracts can sometimes lead to scope creep if not managed tightly.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Northrop Grumman is a large, established defense contractor with a strong track record.
Firm Fixed Price contract structure provides cost certainty for the government.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The defense IT market is substantial, driven by the need for advanced technological capabilities to support national security. Spending in this area is often characterized by long-term contracts, high technical requirements, and a limited number of large prime contractors. Comparable spending benchmarks would involve analyzing other large IT support contracts awarded by agencies like DISA or other branches of the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Northrop Grumman, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. The 'MASSACHUSETTS' state code might indicate a regional focus for contract performance or administration.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Defense Information Systems Agency (DISA). Performance monitoring, quality assurance, and compliance with contract terms are standard oversight mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is generally maintained through contract award databases like FPDS.

Related Government Programs

Defense Information Technology Services
Computer Systems Design Services
Information Technology Support Contracts
Department of Defense IT Procurement
Northrop Grumman Defense Contracts

Risk Flags

Limited number of bidders in a full and open competition.
Potential for contractor cost overruns or scope creep in a long-term FFP contract.
Need for detailed performance metrics to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200408!001701!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0041 ! !20040521!20050520!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !+000010103479!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541519!E! !5!B!S! ! ! !99990909!B!E!N!A! !A!U!J!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! !JM0453!0001! !

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 Information Systems Agency).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2004-05-21. End: 2008-04-30.

What is Northrop Grumman's track record with similar IT service contracts within the Department of Defense?

Northrop Grumman Information Technology Inc. (now part of Northrop Grumman Corporation) has a long and extensive history of providing IT services to the Department of Defense and other federal agencies. They have been involved in numerous large-scale contracts encompassing systems integration, network operations, cybersecurity, and software development. Their track record generally indicates a capacity to handle complex, high-value defense IT requirements. However, specific performance metrics, past performance evaluations, and any past disputes or contract modifications would need to be reviewed for a comprehensive assessment of their performance on this particular contract and others like it.

How does the $12.3 million contract value compare to other similar IT support contracts awarded by DISA or the DoD during that period?

The $12.3 million contract value, awarded in 2004 for a duration of approximately four years, represents a mid-to-large size IT services contract for its time. During the mid-2000s, the Department of Defense was significantly investing in IT modernization and support. Contracts of this magnitude were common for system design, integration, and sustainment services. To provide a precise comparison, one would need to analyze the average contract value for similar 'Computer Systems Design Services' (NAICS 541512) or 'Other ADP & Telecommunication Services' (PSC D399) awarded by DISA and other DoD components within the 2004-2008 timeframe, considering factors like contract duration and scope of work.

What are the primary risks associated with a firm fixed-price contract of this nature and duration?

The primary risks associated with a firm fixed-price (FFP) contract, especially one spanning four years, revolve around potential cost overruns for the contractor and scope creep for the government. For the contractor, unforeseen technical challenges, increased labor costs, or material price fluctuations could erode profit margins if not adequately accounted for in the initial bid. For the government, the risk lies in the contractor potentially cutting corners on quality to maintain profitability or attempting to expand the scope of work without commensurate price adjustments. Effective contract management, clear performance metrics, and robust oversight are crucial to mitigate these risks and ensure the government receives the intended value.

What does the 'MASSACHUSETTS' (ST: MA) designation imply for this contract?

The 'MASSACHUSETTS' (ST: MA) designation, along with the specific city and state information for the contractor's address (MCLEAN, VA), suggests that while the contractor is based in Virginia, the contract may have a performance location, administrative office, or a significant operational presence in Massachusetts. Alternatively, it could relate to the place of performance for a portion of the services or the location of the contracting activity. Without further context, it's difficult to pinpoint the exact implication, but it often relates to where the work is performed or where the contract is managed from within the government's structure.

How did the 'full and open competition' with only two bidders impact price discovery and potential value for the government?

Awarding a contract under 'full and open competition' theoretically allows any qualified vendor to bid, maximizing the potential for competitive pricing. However, receiving only two bids suggests that the market for this specific service, or the requirements of the solicitation, may have limited the number of interested or capable parties. While two bidders still provide a competitive dynamic, it is less robust than if there were, for example, five or more. This could mean that the price discovered might be higher than if a broader range of competitors had participated, potentially impacting the overall value realized by the government. Further analysis of the bid prices and the specific technical requirements would be needed to fully assess the impact.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20002D5010

IDV Type: IDC

Timeline