Northrop Grumman's $38M contract for data capture services awarded by OPM shows fair value with 13 bidders

Contract Overview

Contract Amount: $38,041,419 ($38.0M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Office of Personnel Management

Start Date: 2006-10-01

End Date: 2010-04-30

Contract Duration: 1,307 days

Daily Burn Rate: $29.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 13

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PAPER DATA CAPTURE AND CONVERSION/PAPER RECORDS CONVERSION SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20415

State: District of Columbia Government Spending

Plain-Language Summary

Office of Personnel Management obligated $38.0 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: PAPER DATA CAPTURE AND CONVERSION/PAPER RECORDS CONVERSION SERVICES Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears reasonable given the scope of paper data capture and conversion. 3. Performance period of over three years suggests a stable, long-term service requirement. 4. The contract falls within the IT services sector, specifically data processing and hosting. 5. No small business set-aside was utilized, suggesting the primary contractor is a large entity. 6. The contract's value is moderate within the context of large-scale government IT services.

Value Assessment

Rating: good

The contract's value of approximately $38 million over 1307 days (roughly 3.5 years) for paper data capture and conversion services appears to be within a reasonable range for the scope of work. While direct comparisons are difficult without specific service metrics, the presence of 13 bidders in a full and open competition suggests that the pricing was competitive. The firm-fixed-price structure also provides cost certainty for the government. Benchmarking against similar large-scale digitization projects would offer further insight, but initial assessment indicates fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 13 bids received. This level of competition is generally considered strong and suggests that multiple vendors were interested and capable of performing the required services. A higher number of bidders typically leads to more competitive pricing and a wider selection of qualified contractors, which is beneficial for the government in securing the best value.

Taxpayer Impact: The robust competition for this contract likely resulted in more favorable pricing for taxpayers. It ensured that the Office of Personnel Management received competitive offers, preventing potential overpricing and maximizing the return on investment for the services rendered.

Public Impact

Federal employees and citizens benefit from the efficient management and accessibility of personnel records. Services delivered include the digitization and conversion of paper records into electronic formats. The geographic impact is primarily within the District of Columbia, where the Office of Personnel Management is headquartered. Workforce implications include the potential for specialized roles in data entry, scanning, and quality assurance, likely performed by the contractor's staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if data conversion formats are proprietary.
Risk of data integrity issues during large-scale conversion processes.
Dependence on contractor's security protocols for sensitive personnel data.

Positive Signals

Successful completion of a large-scale data conversion project.
Contract awarded through a competitive bidding process.
Firm-fixed-price contract provides budget certainty.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on data processing, web hosting, and related services, with a NAICS code of 518210. The market for data capture and conversion services is significant, driven by government and commercial entities seeking to digitize legacy paper records for improved accessibility, storage efficiency, and disaster recovery. Comparable spending benchmarks in this area would involve analyzing other large-scale digitization efforts across federal agencies, which often involve millions of documents and require specialized equipment and expertise.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The primary contractor, Northrop Grumman Information Technology Inc., is a large entity. This suggests that the scale and complexity of the requirement were likely met by a large business, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Office of Personnel Management. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed budget. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Records Management
Digital Government Initiatives
IT Infrastructure Modernization
Document Management Systems

Risk Flags

Data Security Risk
Data Integrity Risk
Performance Risk
Schedule Risk

Frequently Asked Questions

What is this federal contract paying for?

Office of Personnel Management awarded $38.0 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. PAPER DATA CAPTURE AND CONVERSION/PAPER RECORDS CONVERSION SERVICES

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: Office of Personnel Management (Office of Personnel Management).

What is the total obligated amount?

The obligated amount is $38.0 million.

What is the period of performance?

Start: 2006-10-01. End: 2010-04-30.

What is the track record of Northrop Grumman Information Technology Inc. in performing similar data capture and conversion services for federal agencies?

Northrop Grumman Information Technology Inc. has a substantial track record in providing a wide range of IT services to the federal government, including data management, system integration, and modernization. While specific details on past paper data capture projects for OPM are not provided here, the company's extensive experience with large-scale government contracts suggests a capability to handle complex data conversion tasks. Their history includes work on sensitive government systems, implying adherence to security and data integrity standards. Further investigation into their past performance evaluations and specific contract awards related to digitization would provide a more precise assessment of their expertise in this niche.

How does the per-unit cost of this data conversion contract compare to industry benchmarks or similar government contracts?

Determining a precise per-unit cost benchmark for this contract is challenging without knowing the exact nature of the documents being converted (e.g., size, complexity, required indexing) and the volume. The total contract value of approximately $38 million over its duration suggests a significant undertaking. However, the presence of 13 bidders in a full and open competition implies that the pricing was likely competitive within the market for such services. Industry benchmarks for document scanning and conversion can vary widely, from a few cents to several dollars per page depending on the level of effort. A detailed analysis would require breaking down the contract value by estimated output and comparing it to publicly available data on similar digitization projects.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this paper data capture and conversion contract include potential data integrity issues during the digitization process, security breaches of sensitive personnel information, and delays in project completion. Data integrity risks can arise from scanning errors, OCR inaccuracies, or improper indexing, leading to corrupted or incomplete digital records. Security risks are paramount given the nature of OPM's data, requiring robust cybersecurity measures from the contractor. Mitigation strategies likely include stringent quality control processes, adherence to strict data handling and security protocols mandated by OPM, regular audits, and performance monitoring by the agency. The firm-fixed-price nature of the contract also incentivizes the contractor to manage risks effectively to maintain profitability.

How effective is the Office of Personnel Management likely to be in overseeing this contract, given its scope and duration?

The effectiveness of OPM's oversight for this contract depends on several factors, including the adequacy of their contract management staff, the clarity of performance metrics, and the robustness of their quality assurance processes. Given the contract's duration of over three years and its significant value, dedicated oversight resources are crucial. OPM likely employs contract specialists and technical experts to monitor progress, review deliverables, and ensure compliance with contract terms. Regular progress meetings, site visits (if applicable), and performance reviews are standard oversight mechanisms. The success of oversight will be reflected in the quality and completeness of the digitized records and the contractor's adherence to schedule and budget.

What is the historical spending pattern for paper records conversion services at OPM or similar agencies?

Historical spending patterns for paper records conversion services at OPM and similar agencies have generally increased over the years as agencies recognize the benefits of digitization for efficiency, accessibility, and disaster recovery. Agencies often undertake large-scale digitization projects to address backlogs of physical records accumulated over decades. Spending can fluctuate based on specific initiatives, budget allocations, and the prioritization of records management modernization. While this specific $38 million contract represents a significant investment, it is likely part of a broader, ongoing effort within the federal government to transition from paper-based to digital record-keeping systems. Analyzing past OPM contracts or those of agencies like the National Archives and Records Administration (NARA) would reveal trends in investment in such services.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 13

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 2411 DULLES CORNER PARK #800, HERNDON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,200,668

Exercised Options: $38,041,419

Current Obligation: $38,041,419

Contract Characteristics

Cost or Pricing Data: NO

Timeline