DoD's $10.1M contract for wired telecommunications services awarded to Northrop Grumman Information Technology Inc

Contract Overview

Contract Amount: $10,145,080 ($10.1M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2007-09-26

End Date: 2010-09-07

Contract Duration: 1,077 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: IT

Official Description: MIGRATED DATA VALUE UNKNOWN

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $10.1 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: MIGRATED DATA VALUE UNKNOWN Key points: 1. Contract value of $10.1 million over its period of performance. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The contract duration was approximately 3 years. 4. The North American Industry Classification System (NAICS) code is 517110, indicating services related to wired telecommunications carriers. 5. The contract was awarded by the Department of the Air Force. 6. Northrop Grumman Information Technology Inc. is the primary contractor. 7. The contract type was Cost No Fee. 8. The contract was awarded in late 2007 and completed in 2010.

Value Assessment

Rating: fair

The contract value of $10.1 million for approximately three years of wired telecommunications services appears to be within a reasonable range for a government contract of this nature. Without specific details on the scope of services (e.g., bandwidth, infrastructure, maintenance), a direct per-unit cost comparison is challenging. However, the Cost No Fee contract type suggests the government bore the cost of performance, with the contractor receiving no fee, which could indicate a focus on cost recovery or a specific program objective rather than profit maximization. Benchmarking against similar telecommunications contracts would provide a clearer picture of 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 that all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition for this specific requirement. While full and open competition is generally preferred for ensuring fair pricing and access for a wide range of vendors, the low number of bidders could indicate specific technical requirements or market limitations that restricted participation.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces. However, with only two bids received, the potential for significant cost savings may have been limited compared to scenarios with a larger number of competing offers.

Public Impact

The primary beneficiaries are likely military personnel and operations within the Department of the Air Force who rely on robust wired telecommunications infrastructure. The services delivered would include the provision and maintenance of wired telecommunications networks essential for command, control, and communication. The geographic impact is likely concentrated at Air Force installations where these telecommunications services are deployed. Workforce implications could include the need for skilled telecommunications technicians and engineers, both within the contractor's organization and potentially within the government for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost No Fee contract type might obscure true cost drivers if not properly monitored.
Limited number of bidders (2) could suggest potential for higher prices than with broader competition.
Lack of specific performance metrics makes it difficult to assess the quality and efficiency of services delivered.

Positive Signals

Awarded under full and open competition, adhering to best practices for government procurement.
Contract awarded to a well-established entity (Northrop Grumman) with significant experience in IT and defense.
Contract completion suggests the services were delivered as required over the specified period.

Sector Analysis

The wired telecommunications sector is a critical component of the broader information technology and defense industries. This contract falls under the NAICS code 517110, which encompasses establishments primarily engaged in operating and/or providing access to telecommunications infrastructure, such as wireline, fiber optic, and wireless (except satellite) networks. The market for government telecommunications services is substantial, with significant spending allocated to ensuring reliable and secure communication networks for various agencies. Comparable spending benchmarks would typically involve analyzing the cost per user, cost per bandwidth unit, or total contract value for similar telecommunications infrastructure projects across different government branches.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by the 'sb' field being false. There is no explicit information regarding subcontracting plans for small businesses. The absence of small business participation in this specific award suggests that the primary contract was likely awarded based on technical capabilities and overall capacity, potentially favoring larger, established prime contractors. This could limit opportunities for small businesses to engage in providing specialized telecommunications services under this particular contract.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Air Force contracting and program management offices. Accountability measures would be tied to the terms and conditions of the Cost No Fee contract, ensuring that the contractor delivered the agreed-upon telecommunications services. Transparency is generally facilitated through contract award databases, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Systems Network (DISN)
Air Force Network Integration Center (AFNIC)
Telecommunications Infrastructure Modernization Programs
Federal Information Technology Acquisition Reform Act (FITARA) related spending

Risk Flags

Limited competition may have impacted price optimization.
Cost-reimbursement type contracts require diligent oversight to control costs.
Specific performance metrics not detailed, making quality assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.1 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. MIGRATED DATA VALUE UNKNOWN

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2007-09-26. End: 2010-09-07.

What specific telecommunications services were provided under this contract?

The contract, identified by NAICS code 517110, pertains to Wired Telecommunications Carriers. This typically includes services such as providing access to the public switched telephone network, local and long-distance voice and data communication services over wired networks, and potentially the installation and maintenance of associated infrastructure. Given the awarding agency is the Department of the Air Force, these services were likely critical for supporting military operations, command and control systems, and administrative functions at various Air Force installations. The 'Cost No Fee' (CNF) contract type suggests the government reimbursed the contractor for allowable costs incurred in performing the service, but the contractor did not receive any profit or fee on top of those costs. This type of contract is often used when the scope of work is well-defined and the government wants to ensure services are provided at cost.

How does the contract value of $10.1 million compare to similar telecommunications contracts awarded by the DoD?

Comparing the $10.1 million contract value requires context regarding the duration and scope of services. This contract spanned approximately three years (1077 days). If we consider an average annual spend, it's roughly $3.37 million per year. This figure needs to be benchmarked against similar contracts for wired telecommunications infrastructure and services within the Department of Defense or other federal agencies. Factors like bandwidth requirements, geographic coverage, security protocols, and the specific technologies deployed significantly influence contract values. Without detailed service specifications, a precise comparison is difficult, but annual spending in the low millions for telecommunications infrastructure at a large organization like the Air Force is not uncommon. Further analysis would involve looking at contracts with similar NAICS codes and service descriptions.

What are the potential risks associated with a 'Cost No Fee' contract type for telecommunications services?

The primary risk with a 'Cost No Fee' (CNF) contract is that the government bears all allowable costs without the contractor having a direct financial incentive for efficiency or profit. While this can prevent excessive profit-taking, it places a significant burden on government oversight to ensure costs are reasonable, allocable, and allowable. If oversight is weak, the contractor might incur higher costs than necessary, as their primary motivation is not profit but rather covering expenses. For telecommunications services, this could manifest in choices of equipment, maintenance schedules, or staffing levels that are more costly than optimal. The lack of a fee also means the contractor might have less incentive to innovate or go above and beyond standard service requirements. Therefore, robust government monitoring of expenditures and performance is crucial to mitigate these risks.

What was the track record of Northrop Grumman Information Technology Inc. regarding similar government contracts at the time of award?

At the time of this contract's award in September 2007, Northrop Grumman Information Technology Inc. (NGIT) was a significant player in the government contracting space, particularly within the defense sector. The company had a substantial portfolio of IT and telecommunications contracts with various federal agencies, including the Department of Defense. NGIT was known for its capabilities in areas such as network engineering, systems integration, and cybersecurity. While specific performance metrics for past contracts are not detailed here, their continued success in winning large-scale government contracts suggests a generally positive track record in delivering complex IT and telecommunications solutions. However, like any large contractor, they would have had a history of both successes and potential challenges on various projects.

How did the competition level (2 bidders) impact the pricing and value for taxpayers?

A competition level with only two bidders suggests a moderately competitive environment. While better than a sole-source award, it is less competitive than scenarios involving numerous bids. For taxpayers, this means that while some price discovery occurred, the potential for achieving the lowest possible price might have been constrained. With more bidders, the pressure to offer competitive pricing increases significantly. In this case, the government received two proposals, and the contract was awarded based on the best value determination. The 'Cost No Fee' structure further complicates direct price comparisons, as the focus is on reimbursing costs rather than a fixed price. However, the existence of two offers implies that the government had at least some basis for comparison to ensure the costs incurred were reasonable for the services rendered.

What is the historical spending trend for wired telecommunications services by the Department of the Air Force?

Analyzing historical spending trends for wired telecommunications services by the Department of the Air Force requires access to detailed historical contract data over multiple fiscal years. This specific $10.1 million contract from 2007-2010 represents a snapshot. Generally, the Air Force, like other branches of the DoD, has consistently invested heavily in telecommunications infrastructure to support its global operations. Spending in this area fluctuates based on modernization needs, technological advancements (e.g., transition to fiber optics, cloud integration), and specific operational requirements. Over the years, there has been a trend towards consolidating networks, increasing bandwidth, and enhancing cybersecurity, which influences the type and cost of telecommunications services procured. Understanding the broader trend would involve examining annual spending reports, major contract awards in this category, and strategic telecommunications initiatives undertaken by the Air Force.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

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

Address: 7575 COLSHIRE DRIVE, MCLEAN, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $229,375,033

Exercised Options: $113,337,941

Current Obligation: $10,145,080

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877104D0004

IDV Type: IDC

Timeline