Northrop Grumman's $172M Army contract for facilities support services shows fair value with 4 bidders

Contract Overview

Contract Amount: $172,408,677 ($172.4M)

Contractor: Northrop Grumman Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-03-06

End Date: 2018-06-22

Contract Duration: 2,299 days

Daily Burn Rate: $75.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MCTC SUPPORT SERVICES FOR DPTMS

Place of Performance

Location: FORT HOOD, BELL County, TEXAS, 76544

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $172.4 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: MCTC SUPPORT SERVICES FOR DPTMS Key points: 1. The contract's value appears reasonable given the scope of facilities support services. 2. Competition was robust, with four bidders vying for the contract, suggesting a healthy market. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance duration spans over six years, indicating a long-term need for these services. 5. This contract falls within the broader facilities support services sector for the Department of Defense. 6. The contract was awarded as a delivery order under a larger contract vehicle.

Value Assessment

Rating: good

The contract's total value of approximately $172 million over its duration suggests a significant investment in facilities support. Benchmarking against similar large-scale facilities management contracts within the Department of Defense indicates that the pricing is likely competitive, especially considering the firm-fixed-price nature which caps government liability. The presence of multiple bidders further supports the assessment that the government achieved a fair price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four distinct bidders participating in the process. This level of competition is generally considered healthy and suggests that multiple capable contractors were aware of and interested in the opportunity. The presence of four bidders likely contributed to price discovery and ensured that the Department of the Army received competitive proposals.

Taxpayer Impact: A competitive bidding process with multiple offers generally leads to better pricing for taxpayers, as contractors vie to win the award by offering the most attractive terms and prices.

Public Impact

The Department of the Army benefits from comprehensive facilities support services, ensuring operational readiness. Military personnel and civilian employees are provided with well-maintained and functional facilities. The contract supports jobs within the facilities management and support services industry. Services are primarily delivered in Texas, impacting the local economy and workforce there.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly due to the long duration.
Reliance on a single large contractor for critical infrastructure support.

Positive Signals

Firm-fixed-price contract limits financial risk for the government.
Full and open competition suggests a robust market and competitive pricing.
Long-term contract provides stability for essential services.

Sector Analysis

The facilities support services sector is a critical component of government operations, encompassing a wide range of activities from maintenance and repair to logistics and base operations. This contract, valued at over $172 million, represents a substantial portion of spending within this niche. Comparable contracts in this sector often involve multi-year durations and significant dollar values, reflecting the ongoing need for comprehensive facility management across federal agencies. The industry is characterized by a mix of large defense contractors and specialized service providers.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. The prime contractor, Northrop Grumman Technical Services, Inc., is a large entity. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts can sometimes trickle down opportunities.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under a larger contract, oversight may be managed through the parent contract's administration. The firm-fixed-price nature provides some cost control. Transparency is generally maintained through contract award databases. Specific Inspector General jurisdiction would depend on the nature of any potential issues arising from performance or financial reporting.

Related Government Programs

Base Operations Support Services
Logistics and Supply Chain Management
Facilities Maintenance and Repair
Department of Defense Contract Management

Risk Flags

Long-term contract duration may increase risk of performance degradation or obsolescence if not actively managed.
Reliance on a single large contractor for critical support functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $172.4 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. MCTC SUPPORT SERVICES FOR DPTMS

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN TECHNICAL SERVICES, 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 $172.4 million.

What is the period of performance?

Start: 2012-03-06. End: 2018-06-22.

What is the historical spending trend for facilities support services by the Department of the Army?

The Department of the Army consistently allocates significant funds towards facilities support services, reflecting the vast infrastructure it manages across numerous installations. Historical data indicates a steady demand for these services, often awarded through large, multi-year contracts. Spending in this category can fluctuate based on modernization efforts, base realignment and closure actions, and overall defense budgets. While specific year-over-year figures for this exact contract type are not provided, the overall trend shows a sustained requirement for comprehensive facilities management, often exceeding billions of dollars annually across the Army's portfolio. This particular contract, valued at over $172 million, represents a notable investment within this broader spending pattern.

How does the performance of Northrop Grumman Technical Services, Inc. on similar contracts compare?

Northrop Grumman Technical Services, Inc. is a large, established defense contractor with a broad portfolio of services, including logistics and base operations support. Assessing their performance on similar contracts requires a detailed review of past performance evaluations, contract modifications, and any disputes or claims filed. Generally, large contractors like Northrop Grumman have extensive experience managing complex federal contracts. However, performance can vary significantly based on the specific contract requirements, management team, and operational environment. Without access to specific past performance reports or contract histories for this entity related to facilities support, a definitive comparison is challenging. However, their long-standing presence in the defense sector suggests a capacity to meet contractual obligations, though individual contract successes and challenges are common.

What are the key performance indicators (KPIs) typically used for facilities support services contracts?

Key performance indicators (KPIs) for facilities support services contracts are designed to measure the effectiveness, efficiency, and responsiveness of the contractor's operations. Common KPIs include response times for service requests (e.g., maintenance, repairs), completion rates for scheduled maintenance, facility uptime percentages, energy efficiency metrics, safety incident rates, customer satisfaction scores (often from end-users within the facility), and compliance with environmental regulations. For a contract like this, KPIs would likely be tailored to the specific services provided, such as pest control effectiveness, grounds maintenance quality, janitorial service standards, and the operational readiness of building systems. Performance is typically evaluated through regular reporting and formal reviews.

What is the risk associated with a firm-fixed-price contract for services like facilities support?

Firm-fixed-price (FFP) contracts are generally favored by the government for their cost certainty. The primary risk for the government under an FFP contract is that the contractor may cut corners on quality or service to maximize profit if not adequately monitored. Conversely, the primary risk for the contractor is underestimating costs, leading to reduced profit margins or even losses, especially if unforeseen issues arise. For facilities support services, risks can include unexpected repair needs, fluctuating utility costs (though often managed separately or factored into pricing), or labor cost increases. However, the FFP structure incentivizes the contractor to manage these risks efficiently. Robust performance monitoring and clear contract terms are crucial to mitigate potential downsides for both parties.

How does the geographic location (Texas) influence the cost and execution of this contract?

The contract's performance in Texas has several implications for cost and execution. Labor costs in Texas can vary significantly depending on the specific metropolitan area versus rural locations, influencing the contractor's staffing expenses. The availability of a skilled local workforce for facilities maintenance, repair, and specialized services is also a factor. Furthermore, logistical considerations, such as the proximity of suppliers for materials and equipment, and transportation costs within the state, will impact operational efficiency and overall contract cost. Environmental factors unique to Texas, such as extreme heat or specific weather patterns, may also necessitate specialized maintenance schedules or equipment, potentially affecting service delivery and costs. The presence of a large military installation in Texas likely means established support infrastructure and vendor networks.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING 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

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $180,217,485

Exercised Options: $180,217,485

Current Obligation: $172,408,677

Subaward Activity

Number of Subawards: 1771

Total Subaward Amount: $1,129,175,143

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W911SE11D2010

IDV Type: IDC

Timeline