DHS's $276M secure connectivity contract awarded to Northrop Grumman, spanning 7 years
Contract Overview
Contract Amount: $276,061,283 ($276.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: General Services Administration
Start Date: 2004-04-12
End Date: 2011-04-11
Contract Duration: 2,555 days
Daily Burn Rate: $108.0K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: DHS REQUIRES SECURE COMPUTER-TO-COMPUTER CONNECTIVITY BETWEEN ITS COMPONENTS AND FIELD ACTIVITIES FOR THE PURPOSE OF MOVING CLASSIFIED DATA THROUGHOUT THE DHS IN SUPPORT OF ITS OVERALL MISSION.
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
General Services Administration obligated $276.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DHS REQUIRES SECURE COMPUTER-TO-COMPUTER CONNECTIVITY BETWEEN ITS COMPONENTS AND FIELD ACTIVITIES FOR THE PURPOSE OF MOVING CLASSIFIED DATA THROUGHOUT THE DHS IN SUPPORT OF ITS OVERALL MISSION. Key points: 1. Value for money assessed through cost-plus award fee structure, incentivizing performance. 2. Competition dynamics indicate a competitive delivery order, suggesting potential for price discovery. 3. Risk indicators include the complexity of classified data transfer and long contract duration. 4. Performance context is tied to DHS's critical mission of secure inter-component communication. 5. Sector positioning within IT services, specifically computer systems design.
Value Assessment
Rating: good
The contract's cost-plus award fee (CPAF) structure allows for performance-based incentives, which can drive value. Benchmarking against similar large-scale IT infrastructure contracts is challenging without more granular data on specific services rendered. However, the total award value of approximately $276 million over seven years suggests a significant investment in secure connectivity, implying a need for robust solutions. The initial award value of $10.8 million indicates a phased approach to funding.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had an opportunity to bid. The presence of competition, even within a delivery order, suggests that the General Services Administration (GSA) sought to leverage market forces to achieve favorable terms. The number of bidders is not specified, but the competitive nature implies a degree of price discovery and potential for cost savings compared to a sole-source award.
Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering a more efficient marketplace, leading to potentially lower prices and better service quality. This approach helps ensure that government funds are used judiciously.
Public Impact
Department of Homeland Security (DHS) components and field activities benefit from enhanced secure communication capabilities. Services delivered include secure computer-to-computer connectivity for classified data transfer. Geographic impact is nationwide, supporting DHS operations across various locations. Workforce implications include the need for skilled IT professionals to manage and maintain the secure network infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (7 years) could lead to potential for cost overruns if not managed tightly.
- Reliance on a single contractor (Northrop Grumman) for critical infrastructure may pose a risk if performance degrades.
- Complexity of classified data transfer requires continuous vigilance against evolving cyber threats.
Positive Signals
- Awarded to a large, established defense and aerospace contractor with significant experience.
- Competitive award process suggests a focus on achieving value for taxpayer dollars.
- Cost-plus award fee structure incentivizes contractor performance and efficiency.
Sector Analysis
This contract falls within the IT services sector, specifically Computer Systems Design Services (NAICS 541512). The market for secure IT infrastructure and data management solutions is substantial, driven by increasing government and commercial demand for robust cybersecurity and connectivity. Northrop Grumman is a major player in this space, competing with other large defense contractors and specialized IT firms. Spending benchmarks for similar large-scale secure network infrastructure projects can vary widely based on scope and technology, but this contract represents a significant investment in critical national infrastructure.
Small Business Impact
Information regarding small business set-asides or subcontracting plans for this specific contract is not readily available in the provided data. However, given the nature of the contract and the prime contractor, it is common for large federal contracts to include provisions for small business participation, either through direct subcontracting or set-aside goals. Further investigation would be needed to determine the extent of small business involvement and its impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the purview of the General Services Administration (GSA) and the Department of Homeland Security (DHS). The contract's cost-plus award fee structure implies performance monitoring and evaluation. Transparency is facilitated through federal contract databases like FPDS. Inspector General jurisdiction would likely extend to any potential fraud, waste, or abuse related to the contract's execution.
Related Government Programs
- DHS Secure Communications Systems
- Federal Network Infrastructure Modernization
- Classified Data Handling Systems
- IT Services for National Security
Risk Flags
- Long contract duration may lead to technological obsolescence.
- Complexity of classified data transfer increases cybersecurity risk.
- Potential for contractor performance degradation over extended period.
Tags
it-services, computer-systems-design, dhs, gsa, northrop-grumman, competitive-delivery-order, cost-plus-award-fee, classified-data, secure-connectivity, federal-acquisition-service, virginia
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $276.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DHS REQUIRES SECURE COMPUTER-TO-COMPUTER CONNECTIVITY BETWEEN ITS COMPONENTS AND FIELD ACTIVITIES FOR THE PURPOSE OF MOVING CLASSIFIED DATA THROUGHOUT THE DHS IN SUPPORT OF ITS OVERALL MISSION.
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: General Services Administration (Federal Acquisition Service).
What is the total obligated amount?
The obligated amount is $276.1 million.
What is the period of performance?
Start: 2004-04-12. End: 2011-04-11.
What is Northrop Grumman's track record with similar large-scale secure IT infrastructure contracts for federal agencies?
Northrop Grumman has a long history of providing complex IT solutions and systems integration for government agencies, including defense and intelligence communities. They have experience in secure network design, implementation, and maintenance, often involving classified systems. Their track record includes numerous large federal contracts, demonstrating capability in managing significant budgets and technical challenges. However, specific performance metrics and past issues on comparable contracts would require deeper analysis of contract performance reports and agency evaluations.
How does the $276 million total award value compare to similar secure connectivity contracts for DHS or other agencies?
The $276 million total award value over seven years places this contract in the category of significant federal IT investments. Comparing it directly to similar contracts requires careful consideration of scope, technology, and duration. Large-scale secure network infrastructure projects for agencies like the Department of Defense or intelligence agencies can often exceed this value, especially when encompassing advanced cyber capabilities or global reach. However, for a specific focus on inter-component connectivity within a single agency like DHS, this figure represents a substantial commitment, suggesting a comprehensive and critical need.
What are the primary risks associated with a 7-year contract for classified data transfer systems?
The primary risks associated with a 7-year contract for classified data transfer systems include technological obsolescence, evolving threat landscapes, potential for cost overruns due to long-term maintenance and upgrades, and contractor performance degradation over time. Ensuring that the system remains secure and effective against emerging cyber threats for the entire duration is a significant challenge. Furthermore, the long timeframe increases the potential for unforeseen requirements or changes in agency needs that may not be adequately captured in the initial contract scope, leading to costly modifications or performance gaps.
How effective is the Cost Plus Award Fee (CPAF) structure in ensuring value for money for this DHS contract?
The Cost Plus Award Fee (CPAF) structure is designed to incentivize contractor performance by linking a portion of the fee to the achievement of specific performance objectives. For this DHS contract, it aims to ensure that Northrop Grumman not only delivers the required secure connectivity but does so efficiently and effectively. The 'award fee' component allows DHS to reward superior performance, thereby encouraging the contractor to go beyond minimum requirements. However, the effectiveness hinges on the clarity and measurability of the performance criteria and the rigor of the evaluation process by DHS.
What is the historical spending pattern for secure computer-to-computer connectivity within DHS or GSA?
Historical spending patterns for secure computer-to-computer connectivity within DHS or GSA would typically show a consistent and significant investment in IT infrastructure, particularly for classified data. Agencies like DHS, responsible for national security and critical infrastructure, prioritize robust and secure communication channels. Spending in this area often increases over time due to the need to upgrade aging systems, adopt new technologies, and counter evolving cyber threats. Analyzing past contracts for similar services would reveal trends in contract values, durations, and the types of technologies procured.
What are the implications of awarding a competitive delivery order for such a critical DHS function?
Awarding a competitive delivery order for a critical DHS function like secure computer-to-computer connectivity implies that GSA sought to leverage competition to obtain favorable terms, potentially including price and service quality. While a delivery order is typically placed against an existing indefinite-delivery, indefinite-quantity (IDIQ) contract, the 'competitive' aspect means multiple awardees on the IDIQ were likely invited to bid. This process helps ensure that the specific requirements of this order are met at a competitive price, fostering better value for taxpayers compared to a sole-source award. It also allows for flexibility in choosing the best solution for the immediate need.
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: COMPETITIVE DELIVERY ORDER
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $337,564,048
Exercised Options: $276,061,283
Current Obligation: $276,061,283
Parent Contract
Parent Award PIID: GS00T99ALD0207
IDV Type: GWAC
Timeline
Start Date: 2004-04-12
Current End Date: 2011-04-11
Potential End Date: 2011-04-11 00:00:00
Last Modified: 2015-07-11
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