Defense IT contract awarded to Northrop Grumman for $57.8M, spanning 1.5 years

Contract Overview

Contract Amount: $57,808,375 ($57.8M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2005-09-30

End Date: 2007-03-31

Contract Duration: 547 days

Daily Burn Rate: $105.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200512!006396!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0126 ! !20050930!20060930!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !+000043496692!N!N!000000000000!D399!OTHER ADP&TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541519!E! !5!B!S! ! ! !20200930!B!F!Y!A! !A!N!J!2!002!C! !C!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $57.8 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200512!006396!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0126 ! !20050930!20060930!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !+000043496692… Key points: 1. Contract value represents a significant investment in IT services for the Department of Defense. 2. Full and open competition suggests a potentially competitive bidding process. 3. The contract duration of 1.5 years indicates a medium-term need for these services. 4. Northrop Grumman's established presence in defense contracting suggests a degree of reliability. 5. The specific service category, 'Computer Systems Design Services,' points to a focus on infrastructure and software development. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The contract value of $57.8 million over 1.5 years appears reasonable for complex IT systems design services within the defense sector. Benchmarking against similar large-scale IT contracts for the Department of Defense suggests that this pricing falls within expected ranges, especially considering the specialized nature of defense-related technology. The firm fixed-price contract type provides cost certainty for the government, mitigating the risk of cost overruns.

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 data suggests there were at least two bidders (no=2), which is a positive sign for competitive pricing. A competitive process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition for this IT services contract likely resulted in a more favorable price for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The primary beneficiary is the Department of Defense, which receives essential IT systems design services. Services delivered likely include the design, development, and integration of complex computer systems. The geographic impact is primarily within the defense infrastructure, potentially supporting operations globally. Workforce implications include employment opportunities for IT professionals, engineers, and support staff at Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the designed systems are highly proprietary.
Dependence on a single large contractor for critical IT infrastructure.
Risk of scope creep if requirements are not clearly defined and managed.
Cybersecurity vulnerabilities associated with the designed systems.

Positive Signals

Northrop Grumman's extensive experience in defense IT projects.
Firm fixed-price contract type offers budget predictability.
Full and open competition suggests a robust selection process.
Delivery Order structure may allow for flexibility in tasking.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design services. The defense IT market is a substantial segment of the broader IT industry, characterized by high security requirements, complex integration needs, and significant government investment. Comparable spending benchmarks in this area often involve multi-year, multi-million dollar contracts for system development, maintenance, and modernization.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss=false, sb=false). While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the prime contractor's internal policies and the specific requirements of the contract, which are not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The firm fixed-price nature of the contract provides a degree of financial oversight. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight details are often internal to the agency and contractor.

Related Government Programs

Defense Information Technology Contracts
Computer Systems Design Services
Northrop Grumman Contracts
Department of Defense IT Spending
IT Services for National Security

Risk Flags

Potential for cost overruns if scope is not managed.
Risk of schedule delays impacting critical operations.
Concerns regarding cybersecurity of designed systems.
Dependence on contractor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.8 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200512!006396!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!DCA20002D5010 !A!N! !Y!0126 ! !20050930!20060930!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !+000043496692!N!N!000000000000!D399!OTHER ADP&TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541519!E! !5!B!S! ! ! !20200930!B!F!Y!A! !A!N!J!2!002!C! !C!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !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 $57.8 million.

What is the period of performance?

Start: 2005-09-30. End: 2007-03-31.

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

Northrop Grumman has a long and extensive history of providing IT services and systems integration to the Department of Defense across various branches and agencies. They are a major defense contractor with significant expertise in areas such as cybersecurity, network infrastructure, software development, and command and control systems. Their track record includes numerous large-scale, complex projects, often involving classified or sensitive information. While specific performance details for individual contracts are not always public, their continued success in winning and executing large defense contracts suggests a generally positive track record in delivering on complex technological requirements for the DoD. However, like any large contractor, they have also faced scrutiny and challenges on specific projects over the years.

How does the $57.8 million value compare to other IT contracts of similar scope and duration within the DoD?

The $57.8 million contract value for 1.5 years of computer systems design services is substantial but falls within a common range for significant IT projects within the Department of Defense. Large-scale IT modernization, system development, and integration efforts for the DoD frequently run into tens or hundreds of millions of dollars, often spanning multiple years. Given that this is a delivery order, it implies it's part of a larger IDIQ vehicle, and the total value of that vehicle could be much higher. Compared to other contracts for similar complex system design and integration services, this value appears to be in the mid-to-high range, reflecting the specialized nature and critical importance of defense IT infrastructure.

What are the primary risks associated with this type of IT contract for the government?

The primary risks associated with this type of IT contract for the government include potential cost overruns if the scope is not well-defined or managed, schedule delays impacting critical defense operations, performance issues where the delivered systems do not meet requirements, and cybersecurity vulnerabilities introduced by new or modified systems. There's also a risk of vendor lock-in, where the government becomes overly dependent on a single contractor for maintenance and future development. Ensuring adequate technical expertise within the government to oversee the contractor's work and manage the contract effectively is crucial to mitigating these risks.

How effective is the 'full and open competition' strategy in ensuring value for money for this contract?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for money in government contracting. By allowing all responsible sources to compete, it fosters a competitive environment that drives down prices and encourages innovation. In this case, the fact that it was competed under full and open terms suggests that multiple companies had the opportunity to bid, likely leading to a more competitive price than if it had been sole-sourced. The presence of at least two bidders further supports the idea that competition was active, which is a strong indicator of potential value for taxpayers. However, true value for money also depends on the quality of the services delivered and the long-term effectiveness of the systems designed.

What are the historical spending patterns for 'Computer Systems Design Services' within the Department of Defense?

Historical spending patterns for 'Computer Systems Design Services' within the Department of Defense have shown a consistent and significant investment over the years. The DoD is one of the largest government consumers of IT services, including system design, development, integration, and maintenance. Spending in this category has generally increased with the growing reliance on digital infrastructure, cybersecurity needs, and the modernization of legacy systems. Contracts for these services often involve large, multi-year commitments to major defense contractors like Northrop Grumman, reflecting the long-term nature of developing and maintaining complex defense IT systems. Fluctuations in spending can be influenced by evolving threats, technological advancements, and budget appropriations.

What is the significance of the contract being awarded as a 'Delivery Order'?

The significance of this contract being awarded as a 'Delivery Order' is that it is likely a task order issued under a broader Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract. IDIQ contracts provide a flexible framework for acquiring services or supplies over a period of time, allowing the government to issue specific orders (like this delivery order) as needs arise. This approach offers agility and allows for pre-negotiated terms and pricing. For this specific contract, it means the $57.8 million is for a defined scope of work within a larger potential contract ceiling. It suggests that the Defense Information Systems Agency (DISA) may have a standing IDIQ contract with Northrop Grumman for various IT services, and this order represents a specific project requirement.

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

Financial Breakdown

Contract Ceiling: $3,353,913

Exercised Options: $3,353,913

Current Obligation: $57,808,375

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20002D5010

IDV Type: IDC

Timeline