DoD's $15.6M IT contract to Northrop Grumman shows fair competition but raises value concerns

Contract Overview

Contract Amount: $15,619,061 ($15.6M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2005-03-24

End Date: 2012-04-17

Contract Duration: 2,581 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200507!002248!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0092 ! !20050324!20060323!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!47512!101!01!MAXWELL AFB !MONTGOMERY !ALABAMA !+000006581103!N!N!000000000000!D399!OTHER ADP&TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541512!E! !5!B!S! ! ! !20200930!B!F!Y!A! !A!N!Y!2!001!C! !C!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! !HC1001!0001! !

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92132, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $15.6 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200507!002248!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0092 ! !20050324!20060323!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!47512!101!01!MAXWELL AFB !MONTGOMERY !ALABAMA !+000006581103!N!N!000000… Key points: 1. Contract awarded under full and open competition, indicating a competitive bidding process. 2. The contract duration of over 7 years suggests a long-term need for these IT services. 3. Northrop Grumman's extensive experience in defense IT likely influenced the award. 4. The 'Other ADP & Telecommunication Services' category is broad, potentially encompassing various IT functions. 5. Performance was rated 'Satisfactory' (ST), suggesting the contractor met basic requirements. 6. The contract type 'Time and Materials' can lead to cost overruns if not closely managed.

Value Assessment

Rating: fair

The contract's total value of $15.6 million over approximately 7 years averages to about $2.2 million annually. Benchmarking this against similar IT service contracts within the Department of Defense is challenging without more granular data on the specific services provided. However, the 'Time and Materials' contract type, while flexible, carries inherent risks of cost escalation compared to fixed-price contracts. The 'Satisfactory' performance rating suggests the contractor met expectations, but doesn't necessarily indicate exceptional value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The data indicates there were 3 bids received. A competitive environment with multiple bidders generally supports price discovery and can lead to more favorable pricing for the government. However, the specific details of the bidding process and the nature of the competition (e.g., were the bids significantly different in price or scope?) are not fully detailed.

Taxpayer Impact: The full and open competition suggests taxpayers benefited from a process designed to solicit the best possible offers, potentially leading to a more cost-effective outcome than a sole-source award.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA), which received the IT services. Services delivered likely include computer systems design and related services, supporting military information technology infrastructure. The geographic impact is primarily within the Department of Defense's operational sphere, potentially supporting bases or operations nationwide. Workforce implications include the employment of IT professionals by Northrop Grumman to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Time and Materials' contract type poses a risk of uncontrolled cost growth if not meticulously monitored and managed by the agency.
The broad nature of 'Other ADP & Telecommunication Services' could obscure the true cost drivers and make performance evaluation more complex.
A contract duration of over 7 years, while indicating a sustained need, also means a longer period where potential inefficiencies could persist.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
The contractor, Northrop Grumman, is a large, established entity with significant experience in defense IT, implying a lower risk of contractor failure.
The 'Satisfactory' performance rating indicates the contractor met the minimum requirements of the contract.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design and related services. The IT services market for the federal government is substantial, with agencies like the Department of Defense being major consumers. Contracts for IT support, network management, and system integration are common. Benchmarking this $15.6 million contract requires comparing it to similar IT service procurements for large federal agencies, considering the specific technologies and support levels involved.

Small Business Impact

This contract does not appear to have been specifically set aside for small businesses, as indicated by the large prime contractor and the absence of small business set-aside flags. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless Northrop Grumman voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Information Systems Agency (DISA) contracting officers and program managers. The 'Satisfactory' performance rating suggests some level of oversight was in place. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited by the available data, with specific performance metrics and detailed cost breakdowns not publicly accessible.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
Department of Defense IT Procurement
Computer Systems Design Services Contracts
Time and Materials IT Contracts
Northrop Grumman Federal Contracts

Risk Flags

Time and Materials contract type increases cost overrun risk.
Broad service category may obscure specific cost drivers.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.6 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200507!002248!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0092 ! !20050324!20060323!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!47512!101!01!MAXWELL AFB !MONTGOMERY !ALABAMA !+000006581103!N!N!000000000000!D399!OTHER ADP&TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541512!E! !5!B!S! ! ! !20200930!B!F!Y!A! !A!N!Y!2!001!C! !C!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! !HC1001!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 $15.6 million.

What is the period of performance?

Start: 2005-03-24. End: 2012-04-17.

What specific computer systems design and telecommunication services were provided under this contract?

The provided data categorizes this contract under 'OTHER ADP&TELECOMMUNICATION SERVICES' with a North American Industry Classification System (NAICS) code of 541512 for 'Computer Systems Design Services'. However, the specific nature of these services is not detailed. It could encompass a wide range of activities such as network design and implementation, cybersecurity support, software integration, IT infrastructure management, or telecommunications system support for the Department of Defense. Without further documentation, the precise scope of work remains general.

How does the $15.6 million total value compare to similar IT contracts awarded by DISA during that period?

Comparing the $15.6 million total value requires context regarding the contract's duration (March 24, 2005, to April 17, 2012, approximately 7 years) and the specific services rendered. Annually, this contract averaged around $2.2 million. DISA procures a vast array of IT services, ranging from small, specialized support contracts to large enterprise-wide solutions. To provide a meaningful comparison, one would need to identify other contracts for similar 'Computer Systems Design Services' or 'ADP & Telecommunication Services' awarded by DISA within the same timeframe, considering factors like contract type, performance period, and the specific agency component being supported.

What were the key performance metrics used to assess Northrop Grumman's 'Satisfactory' performance?

The data indicates the contract performance was rated 'Satisfactory' (ST). While 'Satisfactory' implies the contractor met the minimum requirements, the specific metrics that defined this rating are not provided in the data extract. Typically, for IT service contracts, performance metrics could include factors like system uptime, response times for issue resolution, adherence to security protocols, successful project completion rates, and timely delivery of reports or services. The contracting officer's final determination of 'Satisfactory' would be based on the contractor's adherence to the contract's Statement of Work (SOW) and any defined performance standards.

What is the significance of the 'Time and Materials' (T&M) contract type in terms of cost and risk?

The 'Time and Materials' (T&M) contract type, used here, obligates the government to pay the contractor for direct labor hours at specified fixed hourly rates and for the actual cost of materials. This type of contract offers flexibility, especially when the scope of work is not clearly defined at the outset or is expected to change. However, it carries a higher risk of cost overrun for the government compared to fixed-price contracts, as the final cost is not predetermined. Effective management, close monitoring of labor hours, and stringent controls on material costs are crucial for the government to mitigate these risks and ensure value for money.

Were there any specific risks identified during the contract lifecycle, and how were they managed?

The provided data does not explicitly detail specific risks identified during the contract lifecycle or the management strategies employed. However, common risks associated with large IT contracts, especially T&M types, include scope creep, cost overruns, schedule delays, technical challenges, and performance deficiencies. Given the 'Satisfactory' performance rating, it can be inferred that major risks were either avoided or effectively managed by both the contractor and the contracting agency. The long duration (over 7 years) suggests a need for ongoing risk assessment and mitigation throughout the contract's life.

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

Northrop Grumman is a major defense contractor with extensive experience in providing IT services to the Department of Defense and other federal agencies. While this specific contract data doesn't detail their overall track record, their status as a large, established company suggests a history of managing complex, high-value contracts. Their portfolio typically includes areas like command and control systems, cybersecurity, enterprise IT, and mission systems support. Past performance evaluations on other contracts would be a key factor in their ability to win and execute this particular award.

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: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20002D5010

IDV Type: IDC

Timeline