Northrop Grumman's $29M DHS contract for IT support awarded without competition, raising value questions

Contract Overview

Contract Amount: $29,018,390 ($29.0M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Homeland Security

Start Date: 2006-09-11

End Date: 2005-07-04

Competition Type: NOT COMPETED

Pricing Type: NOT REPORTED

Sector: IT

Official Description: TEAMS BRIDGE III EXTENSION (TECHHNICAL ENTERPRISE AUTOMATION MANAGEMENT SUPPORT)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20536

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $29.0 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: TEAMS BRIDGE III EXTENSION (TECHHNICAL ENTERPRISE AUTOMATION MANAGEMENT SUPPORT) Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Lack of competition suggests potential for above-market pricing and reduced incentive for efficiency. 3. The contract's duration and value warrant scrutiny for cost-effectiveness and performance. 4. IT services are critical for DHS operations, making performance and value paramount. 5. Sole-source awards can indicate unique capabilities but also raise concerns about market fairness.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money provided by this contract. The $29 million award to Northrop Grumman for IT support by U.S. Immigration and Customs Enforcement (DHS) lacks a clear basis for comparison against market rates or similar contracts. The absence of competition means there's no external validation of pricing or service efficiency, making it challenging to assess if taxpayers received optimal value. Further analysis would require access to internal cost data or comparable sole-source awards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances prevent a competitive process. The lack of competition here means there were no other bidders to compare against, potentially leading to less favorable pricing and terms for the government compared to a fully competed contract. It also limits the government's ability to explore a wider range of solutions or innovations.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiating favorable terms and ensures that only one company's pricing is considered.

Public Impact

Immigration and Customs Enforcement (ICE) benefits from continued IT support, ensuring operational continuity. The contract delivers essential technical enterprise automation management support, crucial for agency functions. Services are primarily delivered within the District of Columbia, impacting federal IT infrastructure. The contract supports a workforce involved in national security and law enforcement operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Lack of transparency in pricing due to non-competitive nature.
Performance metrics and value for money are harder to ascertain without benchmarks.

Positive Signals

Northrop Grumman is a large, established contractor with significant experience in government IT.
Continued IT support ensures operational stability for critical DHS functions.
The contract addresses a specific need within the agency.

Sector Analysis

This contract falls within the Custom Computer Programming Services sector (NAICS 541511), a significant segment of the IT industry focused on developing and implementing software solutions. The market for IT services to federal agencies is substantial, with agencies like DHS relying heavily on contractors for specialized technical support. Benchmarks for similar IT support contracts can vary widely based on scope, duration, and complexity, but competitive procurements typically yield more transparent pricing.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, it is less likely to directly benefit the small business ecosystem unless Northrop Grumman voluntarily includes them in their subcontracting efforts. Further investigation into subcontracting plans would be needed to assess any indirect impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting officers and program managers. Inspector General (IG) reviews may occur, particularly concerning performance and financial accountability, though the sole-source nature might limit the scope of competitive process oversight. Transparency is reduced due to the lack of public competition, making it harder for external stakeholders to assess accountability.

Related Government Programs

DHS IT Modernization Programs
Federal Enterprise Architecture
Custom Computer Programming Services
IT Support Services Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for above-market pricing
Limited transparency in value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $29.0 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. TEAMS BRIDGE III EXTENSION (TECHHNICAL ENTERPRISE AUTOMATION MANAGEMENT SUPPORT)

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 Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2006-09-11. End: 2005-07-04.

What is Northrop Grumman's track record with similar IT support contracts for federal agencies, particularly DHS?

Northrop Grumman Information Technology Inc. has a substantial history of performing IT support and technology services for various federal agencies, including the Department of Homeland Security. Their portfolio often includes complex systems integration, cybersecurity, and enterprise resource planning support. For DHS, they have held numerous contracts, some of which have been large-scale and long-term. While specific performance data for this particular 'TEAMS BRIDGE III EXTENSION' contract is not publicly detailed, Northrop Grumman's general track record suggests they possess the technical capacity to deliver on such requirements. However, the absence of competition for this specific award means that performance comparisons against other potential providers are not available, and the value assessment relies heavily on the agency's internal metrics and Northrop Grumman's past performance within the agency.

How does the pricing of this $29 million contract compare to similar IT support contracts awarded competitively?

Direct price comparison is challenging due to the sole-source nature of this $29 million contract. Competitive bids typically allow agencies to benchmark pricing against multiple offers, revealing market rates and driving cost efficiencies. Without this competitive baseline, it's difficult to definitively state if Northrop Grumman's pricing is above or below market. However, sole-source awards inherently carry a higher risk of inflated costs because the government lacks the leverage of multiple competing proposals. To assess value, one would need to compare the specific services rendered against industry standards for custom computer programming and IT management support, considering factors like labor rates, overhead, and profit margins, which are not publicly disclosed for this contract.

What are the primary risks associated with awarding a significant IT support contract on a sole-source basis?

The primary risks associated with sole-source IT support contracts include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or improve efficiency, and limited access to a broader range of technological solutions or expertise. For a $29 million contract like this one for DHS, the government may not be achieving the best possible value for taxpayer dollars. There's also a risk that the agency's requirements might not be perfectly met if alternative solutions from other vendors were not explored. Furthermore, sole-source awards can sometimes raise concerns about fairness and market distortion if not justified by truly unique circumstances or urgent needs.

How effective has Northrop Grumman been in delivering technical enterprise automation management support in the past?

Assessing the specific effectiveness of Northrop Grumman on the 'TEAMS BRIDGE III EXTENSION' contract is difficult without detailed performance reports or public evaluations. However, as a major defense and IT contractor, Northrop Grumman generally has a robust framework for delivering complex technical services. Their past performance on large-scale government contracts, including those for DHS, indicates a capacity for managing significant IT projects. Effectiveness is typically measured by adherence to schedules, meeting technical specifications, and achieving desired outcomes. While the company has the experience, the sole-source nature of this award means that its effectiveness is judged internally by DHS rather than being validated through a competitive process that might highlight superior performance from alternative providers.

What is the historical spending trend for similar IT support services at DHS, and how does this contract fit?

The Department of Homeland Security (DHS) consistently spends billions of dollars annually on IT services, including custom computer programming, systems integration, and technical support. Spending in this category has generally increased over the years as agencies modernize systems and enhance cybersecurity. This $29 million contract, while substantial, represents a portion of DHS's overall IT expenditure. Its significance lies in its sole-source award mechanism, which deviates from the agency's goal of maximizing competition where feasible. Understanding historical spending patterns reveals DHS's reliance on external IT support, but this specific contract's value and efficiency are harder to gauge due to its non-competitive nature compared to other, potentially competed, IT service contracts within the department.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: NOT REPORTED (NO)

Evaluated Preference: NONE

Contractor Details

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

Address: 2411 DULLES CORNER PARK #, HERNDON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: HSCEOP05A00001

IDV Type: BPA

Timeline