Northrop Grumman awarded $35M IT services contract by GSA for Virginia-based support

Contract Overview

Contract Amount: $35,058,896 ($35.1M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: General Services Administration

Start Date: 2008-11-24

End Date: 2011-11-30

Contract Duration: 1,101 days

Daily Burn Rate: $31.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $35.1 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: IT SERVICES Key points: 1. Contract value of $35M for IT services represents a significant investment in federal IT infrastructure. 2. The firm fixed-price contract type suggests a clear scope and predictable costs for the government. 3. Awarded by the General Services Administration (GSA), this contract likely supports a broad range of federal agencies. 4. The 1101-day duration indicates a long-term need for these IT services. 5. The absence of small business set-aside flags suggests this was not specifically targeted for smaller enterprises. 6. Northrop Grumman's involvement points to a focus on large-scale, complex IT solutions.

Value Assessment

Rating: good

The contract value of approximately $35 million over three years for IT services is within a typical range for large federal IT procurements. Benchmarking against similar GSA IT service contracts would provide a more precise value-for-money assessment. The firm fixed-price structure generally indicates good cost control, assuming the scope was well-defined. Without specific performance metrics or comparison data, it's difficult to definitively assess if this represents excellent value, but it appears reasonable for the scale and duration.

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 fact that it was competed suggests a healthy market for these IT services. While the number of bidders is not explicitly stated (only 'no': 2 is provided, which might refer to something else or be incomplete data), full and open competition generally leads to better price discovery and a wider selection of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and ensures the government receives competitive bids, maximizing the value of taxpayer dollars.

Public Impact

Federal agencies requiring IT services, potentially across various departments managed by GSA, will benefit from enhanced technological capabilities. The contract delivers essential IT support, likely encompassing areas such as system maintenance, network operations, and potentially software development or integration. The geographic impact is centered in Virginia, suggesting a concentration of federal IT operations or personnel in that region. The workforce implications include the potential for job creation within Northrop Grumman and its subcontractors, particularly in IT-related fields in the Virginia area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the scope is not managed tightly.
Reliance on a single large contractor could limit future flexibility in IT solutions.
Ensuring ongoing innovation and adaptation to new technologies within the fixed-price structure.

Positive Signals

Award to a large, established contractor like Northrop Grumman suggests a high likelihood of successful delivery.
Firm fixed-price contract provides cost certainty for the government.
Full and open competition indicates a robust market and competitive pricing.

Sector Analysis

This contract falls within the Information Technology (IT) sector, a critical and expansive area of federal spending. The IT services market is highly competitive, with numerous large and small businesses vying for government contracts. Federal IT spending often focuses on modernization, cybersecurity, cloud migration, and data management. This contract's value and duration place it as a significant procurement within the broader IT services landscape, likely supporting core federal IT infrastructure or specific agency needs.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). This suggests that the scope and requirements were likely geared towards larger prime contractors capable of handling complex IT solutions. While there's no direct indication of subcontracting plans for small businesses, large prime contractors often engage small businesses for specialized services, which could still provide opportunities within the broader ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Federal Acquisition Service. GSA has established procurement regulations and contract administration processes. Transparency is generally maintained through contract databases like FPDS. Accountability measures would be tied to the firm fixed-price contract terms and performance expectations, with potential for GSA's Inspector General to investigate any irregularities.

Related Government Programs

GSA IT Schedule Programs
IT Professional Services
Information Technology Support Services
Federal Civilian IT Modernization

Risk Flags

Potential for scope creep in firm fixed-price contracts.
Reliance on a single large contractor.
Ensuring adequate cybersecurity measures are maintained throughout the contract lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $35.1 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. IT SERVICES

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $35.1 million.

What is the period of performance?

Start: 2008-11-24. End: 2011-11-30.

What specific IT services are included under this contract?

While the provided data specifies 'IT SERVICES' as the primary category, the exact nature of services is not detailed. Typically, contracts of this magnitude awarded by GSA to large integrators like Northrop Grumman encompass a wide array of IT functions. This could include enterprise IT infrastructure management, network operations and maintenance, cybersecurity services, application development and sustainment, cloud services integration, IT help desk support, and potentially data center operations or migration. The firm fixed-price nature suggests a well-defined scope, but further details would be needed from the contract's statement of work to ascertain the precise service delivery.

How does the $35 million contract value compare to similar IT service contracts awarded by GSA?

The $35 million value over approximately three years (1101 days) is a substantial but not extraordinary figure for IT services procured through GSA. GSA manages numerous IT contracts, many of which are significantly larger, particularly those under its IT Schedule 70 (now IT Professional Services). However, this contract represents a considerable investment. For context, GSA awards billions annually in IT services. A direct comparison would require analyzing contracts with similar scope, duration, and service types awarded within the same timeframe. Without that granular data, it's fair to say this contract is a significant procurement, reflecting a substantial need for IT support.

What are the key risks associated with a firm fixed-price IT contract of this size?

The primary risk with a firm fixed-price (FFP) contract is scope creep. If the government's needs evolve beyond the initially defined scope, managing changes without significant cost overruns can be challenging. For the contractor, the risk lies in underestimating the effort required, leading to reduced profit margins or even losses if costs exceed the fixed price. For a large IT contract, risks also include technological obsolescence, cybersecurity vulnerabilities, integration challenges with existing systems, and potential performance issues if the contractor lacks adequate resources or expertise. Effective contract management and clear communication are crucial to mitigate these risks.

What is Northrop Grumman's track record with GSA and federal IT contracts?

Northrop Grumman is a major defense contractor and a significant player in the federal IT services market, with extensive experience across numerous government agencies, including those served by GSA. They have a long history of managing large, complex IT programs, encompassing areas like systems integration, cybersecurity, enterprise resource planning, and mission support. Their track record generally includes handling substantial contract values and durations. While specific performance on this particular contract isn't detailed here, their overall profile suggests a capacity to deliver on large-scale IT requirements. Past performance evaluations and contract award histories available through federal procurement data would offer more specific insights.

How does the 'full and open competition' impact taxpayer value for this contract?

Awarding this contract through full and open competition is a positive indicator for taxpayer value. This process ensures that a wide range of potential vendors can compete, fostering a competitive environment that typically drives down prices and encourages innovation. By allowing all responsible sources to bid, the government increases its chances of finding the most cost-effective solution and the best value provider. This contrasts with sole-source or limited competition scenarios, which may result in higher prices due to reduced market pressure. The competitive nature of this award suggests that the selected price is likely a result of market forces, maximizing the return on taxpayer investment.

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)

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: $216,560,269

Exercised Options: $103,320,665

Current Obligation: $35,058,896

Parent Contract

Parent Award PIID: GS09K99BHD0009

IDV Type: GWAC

Timeline