Naval Sea Systems Command awarded a $30M+ engineering services contract in 1997, with significant contract modifications extending its life and value

Contract Overview

Contract Amount: $29,973,172 ($30.0M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 1997-02-14

End Date: 2008-09-30

Contract Duration: 4,246 days

Daily Burn Rate: $7.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199706!1700!2538!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002497C5214 !A!*!* !19970214!19980213!052272044!052272044!052272044!N!2X914!LOGICON INC !2411 DALLAS CORNR PARK !HERNDON !VA!20171!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !0001!+000000067000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!U!2!002!B!* !A!N!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $30.0 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 199706!1700!2538!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002497C5214 !A!*!* !19970214!19980213!052272044!052272044!052272044!N!2X914!LOGICON INC !2411 DALLAS CORNR PARK !HERNDON !VA!20171!03000!013!51!ARLINGTON !ARLING… Key points: 1. The initial contract value was substantial, indicating a significant need for specialized engineering services. 2. The contract saw numerous modifications, suggesting evolving requirements or scope creep over its extended period. 3. The contractor, Logicon Inc. (later Northrop Grumman), has a history of large defense contracts. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed tightly. 5. The duration of the contract, spanning over a decade with modifications, points to a long-term requirement. 6. The services provided fall under engineering and technical support, crucial for naval systems maintenance and development.

Value Assessment

Rating: fair

The initial award of over $30 million for engineering technical services in 1997 was a significant sum for the time. However, the contract's total value likely increased substantially due to numerous modifications over its extended period, which ended in 2008. Without knowing the final obligated amount after all modifications, a precise value-for-money assessment is difficult. Comparing it to similar long-term, multi-modification engineering support contracts for naval systems would be necessary for a robust benchmark.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. The specific number of bidders is not detailed in the provided data, but full and open competition generally fosters a more competitive pricing environment. This approach aims to ensure the government receives the best value by allowing a wide range of qualified contractors to participate.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and access to a broader range of innovative solutions. It reduces the risk of paying inflated prices due to a lack of market alternatives.

Public Impact

Naval Sea Systems Command (NAVSEA) benefits from specialized engineering and technical services to support naval platforms. The contract supports the maintenance, modernization, and sustainment of critical naval systems. The services likely impact the operational readiness and technological advancement of the U.S. Navy. The workforce implications include employment for engineers, technicians, and support staff at Logicon Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost growth due to Cost Plus Fixed Fee contract type and numerous modifications.
Lack of transparency on the final obligated amount after all modifications makes full value assessment challenging.
Long contract duration could indicate a lack of agile acquisition or evolving requirements that were not initially foreseen.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Contractor (Logicon Inc. / Northrop Grumman) is a major defense contractor with significant experience.
Services provided are critical for naval system sustainment and readiness.

Sector Analysis

This contract falls within the Defense sector, specifically supporting naval engineering and technical services. The market for such services is dominated by large defense contractors capable of handling complex, long-term requirements for military systems. Spending in this area is driven by the need for advanced technological support, maintenance, and modernization of naval assets, often involving specialized expertise in areas like electronics, communication, and systems integration.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large, complex engineering services contract likely awarded to a major defense contractor, the primary focus would be on overall capability and technical expertise rather than small business participation goals, though subcontracting opportunities for small businesses may have existed.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Naval Sea Systems Command (NAVSEA) and potentially the Defense Contract Management Agency (DCMA). As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to monitor costs and ensure compliance with the fixed fee. Transparency is limited by the data provided, but standard government contracting regulations and reporting requirements would apply.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Engineering and Technical Services Contracts
Defense Department IT and Professional Services
Cost Plus Fixed Fee Contracts
Long-Term Defense Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Extended contract duration with numerous modifications may indicate scope creep or planning issues.
Lack of final obligated amount makes comprehensive value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 199706!1700!2538!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002497C5214 !A!*!* !19970214!19980213!052272044!052272044!052272044!N!2X914!LOGICON INC !2411 DALLAS CORNR PARK !HERNDON !VA!20171!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !0001!+000000067000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!U!2!0

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $30.0 million.

What is the period of performance?

Start: 1997-02-14. End: 2008-09-30.

What was the total value of the contract after all modifications, and how did it compare to the initial award?

The initial award for contract N0002497C5214 was $30,000,000. However, the contract saw numerous modifications and had an estimated completion date extending to September 30, 2008, significantly beyond its initial February 1998 end date. The provided data indicates a duration of 4246 days, which is over 11 years. Without access to the contract modification history and final obligated amount, it's impossible to state the total final value. However, given the extensive modifications and extended period, the final value likely far exceeded the initial $30 million award, representing a substantial increase in government expenditure over time.

How did the Cost Plus Fixed Fee (CPFF) structure impact the final cost and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract structure meant that the contractor, Logicon Inc., was reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs to maximize their profit margin, as the fee is fixed regardless of the final cost. However, CPFF contracts can also lead to cost overruns if the government's oversight is insufficient or if the scope of work expands significantly, as suggested by the numerous modifications. For taxpayers, this structure carries a risk of higher final costs compared to fixed-price contracts if cost control is not rigorously managed by both the contractor and the contracting agency.

What specific engineering and technical services were provided under this contract?

The contract was for 'ENGINEERING TECHNICAL SERVICES' under the PSC code R425. While the specific details are not fully elaborated in the provided data, this typically encompasses a broad range of support activities crucial for naval systems. These services often include systems engineering, design, development, testing, integration, maintenance, logistics support, and technical documentation for naval platforms and associated equipment. Given the 'ELECTRONICS AND COMMUNICATION' category mentioned, the services likely focused on the complex electronic and communication systems integral to modern naval vessels.

What was the significance of the contract being awarded to Logicon Inc. (later part of Northrop Grumman)?

Logicon Inc. was a significant defense contractor, and its eventual integration into Northrop Grumman signifies the consolidation within the defense industry. Awarding a contract of this magnitude and duration to such a contractor suggests they possessed the necessary technical expertise, infrastructure, and security clearances required for complex naval engineering projects. It also reflects a common trend in defense procurement where large, established companies are often preferred for major programs due to their proven track record and capacity to handle extensive requirements and manage large workforces.

How did the contract's long duration and modifications affect its overall efficiency and value?

The contract's duration, spanning over a decade with numerous modifications, suggests a long-term, evolving need for the services. While a long duration can provide stability for the contractor and ensure continuity of essential services for the government, it also presents risks. Frequent modifications can indicate initial planning deficiencies, scope creep, or unforeseen technical challenges, potentially leading to increased costs and reduced efficiency if not managed effectively. Assessing the overall value requires examining whether the extended period and modifications were justified by evolving mission requirements or if they resulted in unnecessary expenditures compared to potentially re-competing the requirement.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 2411 DALLAS CORNR PARK, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline