Northrop Grumman awarded $30.5M for network support, highlighting long-term IT infrastructure needs

Contract Overview

Contract Amount: $30,483,074 ($30.5M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: General Services Administration

Start Date: 2006-12-31

End Date: 2011-06-30

Contract Duration: 1,642 days

Daily Burn Rate: $18.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NETWORK SUPPORT CONTRACT

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $30.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: NETWORK SUPPORT CONTRACT Key points: 1. Contract value represents a significant investment in maintaining critical federal IT infrastructure. 2. The firm fixed-price structure suggests a defined scope and cost control by the government. 3. A single award indicates a competitive process that likely resulted in a best-value determination. 4. The contract duration of over four years points to the ongoing nature of network support requirements. 5. This award falls within the broader context of federal IT modernization and sustainment efforts. 6. The General Services Administration's involvement suggests a focus on shared IT services across agencies.

Value Assessment

Rating: good

The $30.5 million award over approximately four years for network support appears reasonable given the scope of maintaining federal IT infrastructure. Benchmarking against similar long-term IT support contracts managed by GSA would provide further insight into value for money. The firm fixed-price nature of the contract helps manage cost predictability for the government, assuming the scope was well-defined.

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 offers. The presence of multiple bidders (3 indicated) suggests a healthy competitive environment, which typically drives down prices and encourages innovation. The government likely selected the offer that represented the best overall value, considering factors beyond just price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring the government receives competitive pricing and a wider range of solutions, maximizing the return on investment for public funds.

Public Impact

Federal agencies relying on GSA's IT infrastructure services benefit from uninterrupted network operations. The contract supports the maintenance and potential upgrades of essential network components. Workforce within Northrop Grumman and potentially its subcontractors are engaged in delivering these services. The geographic impact is likely nationwide, supporting federal operations across various locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single contractor for critical network infrastructure could pose a risk if performance degrades.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable and reliable partnership for essential services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on network support and maintenance. The federal IT market is substantial, with agencies consistently investing in infrastructure to support their missions. This contract with Northrop Grumman is likely part of a larger strategy to ensure the reliability and security of federal networks, potentially involving hardware, software, and personnel services. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts awarded by agencies like GSA or DOD.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the specific terms negotiated within the contract and the company's subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the General Services Administration's Federal Acquisition Service. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services within the agreed-upon price. Transparency is facilitated through contract award databases and reporting requirements, though specific performance metrics are not detailed here.

Related Government Programs

Federal Information Technology, Infrastructure, Network Services, IT Support Contracts, GSA IT Schedules

Risk Flags

Long-term reliance on a single vendor for critical infrastructure.
Potential for cost overruns if scope is not precisely managed.
Risk of service degradation if contractor faces financial or performance issues.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $30.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. NETWORK SUPPORT CONTRACT

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 $30.5 million.

What is the period of performance?

Start: 2006-12-31. End: 2011-06-30.

What is the track record of Northrop Grumman Information Technology Inc. with the General Services Administration for similar network support contracts?

Northrop Grumman Information Technology Inc. has a significant history of contracting with the federal government, including the General Services Administration (GSA). For network support and related IT services, their track record often involves large-scale, complex projects. Analyzing past performance evaluations and contract modifications for similar GSA awards would reveal their consistency in meeting performance requirements, managing costs, and adhering to schedules. Their extensive experience suggests a capability to handle substantial network infrastructure needs, but a detailed review of specific past performance metrics would be necessary for a comprehensive assessment.

How does the $30.5 million contract value compare to other federal network support contracts awarded around the same period?

The $30.5 million contract value for network support, awarded by GSA to Northrop Grumman, needs to be contextualized against similar procurements. Federal network support contracts can vary widely in cost depending on scope, duration, and complexity. Contracts for enterprise-wide network infrastructure management, including hardware, software, and personnel, often run into tens or hundreds of millions of dollars over several years. To benchmark this specific award, one would compare it to other full and open competition contracts for network sustainment and operations awarded by agencies like GSA, DOD, or civilian departments during the 2006-2011 timeframe. Factors such as the number of users supported, geographic reach, and specific technologies involved are crucial for a meaningful comparison.

What are the primary risks associated with a long-term (over 4 years) firm fixed-price contract for network support?

A primary risk with long-term, firm fixed-price (FFP) contracts for network support is scope creep or unforeseen technical challenges that were not adequately anticipated during the initial pricing. If the contractor underestimates the effort required or if technology evolves rapidly, they may incur losses, potentially impacting their motivation or ability to perform. Conversely, if the government's needs change significantly, modifying an FFP contract can be complex and costly. Another risk is that the contractor might cut corners on service quality to maintain profitability if costs escalate unexpectedly. Robust contract management, clear performance metrics, and a well-defined scope are essential to mitigate these risks.

How effective is the 'full and open competition' approach in ensuring value for money for federal IT infrastructure contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in federal IT infrastructure contracts. By allowing all responsible sources to compete, the government maximizes the pool of potential offerors, increasing the likelihood of receiving competitive pricing and innovative solutions. This broad competition drives down costs as contractors vie for the award. Furthermore, it allows the government to select the offer that provides the best overall value, considering technical capabilities, past performance, and price, rather than simply selecting the lowest bidder. While it requires more upfront effort in solicitation and evaluation, the long-term benefits in terms of cost savings and quality are substantial.

What are the implications of this contract for the broader federal IT services market and competition dynamics?

This contract award to Northrop Grumman signifies the continued importance of large, established IT service providers in supporting critical federal infrastructure. The $30.5 million value suggests a significant scope, likely encompassing a substantial portion of network operations and maintenance. For the broader market, it reinforces the trend of major players securing large, long-term contracts. It also highlights the role of agencies like GSA in consolidating and managing IT services to achieve economies of scale. While full and open competition is employed, the size of such contracts often favors large businesses, potentially limiting opportunities for smaller, specialized firms unless they participate as subcontractors.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 9T7LSTIS001A

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DR, MCLEAN, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,483,074

Exercised Options: $30,483,074

Current Obligation: $30,483,074

Parent Contract

Parent Award PIID: GS09K99BHD0009

IDV Type: GWAC

Timeline