Treasury's IRS awards Northrop Grumman $38.6M for Custom Computer Programming Services
Contract Overview
Contract Amount: $38,645,387 ($38.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of the Treasury
Start Date: 2004-10-20
End Date: 2008-01-31
Contract Duration: 1,198 days
Daily Burn Rate: $32.3K/day
Competition Type: NON-COMPETITIVE DELIVERY ORDER
Number of Offers Received: 1
Pricing Type: COMBINATION (TWO OR MORE)
Sector: IT
Official Description: OPERATIONS & MAINTENANCE
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $38.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: OPERATIONS & MAINTENANCE Key points: 1. Significant contract value of $38.6 million for IT services. 2. Northrop Grumman is a major defense contractor, indicating potential for large-scale IT solutions. 3. The contract was awarded non-competitively, raising questions about price discovery and value. 4. The sector is IT, specifically custom computer programming, a critical area for government operations.
Value Assessment
Rating: questionable
The contract value of $38.6 million for a 4-year period suggests a substantial investment. Without competitive bids, it's difficult to assess if this pricing is optimal compared to market rates for similar custom programming services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
This contract was awarded as a non-competitive delivery order. This method limits price discovery and may not ensure the government receives the best possible value, as there was no comparison against other potential providers.
Taxpayer Impact: The lack of competition could mean taxpayers are paying more than necessary for these custom computer programming services.
Public Impact
Taxpayers may be overpaying due to the non-competitive award. The IRS relies on these custom programming services, making continuity of service a key concern. The long duration of the contract (nearly 4 years) locks in the current pricing structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Non-competitive award
- Lack of price transparency
- Potential for overpayment
Positive Signals
- Established contractor
- Critical IT services
Sector Analysis
This contract falls within the Information Technology sector, specifically custom computer programming services. Government spending in this area is substantial, and competitive bidding is typically encouraged to ensure cost-effectiveness.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The non-competitive nature of this award warrants scrutiny. Oversight should focus on ensuring the services provided are essential and that the pricing, while not competitively determined, is reasonable and justified.
Related Government Programs
- Custom Computer Programming Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Non-competitive award
- Lack of price competition
- Potential for inflated costs
- Limited oversight on price justification
Tags
custom-computer-programming-services, department-of-the-treasury, va, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $38.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. OPERATIONS & MAINTENANCE
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $38.6 million.
What is the period of performance?
Start: 2004-10-20. End: 2008-01-31.
What was the justification for awarding this contract non-competitively?
The justification for a non-competitive award typically stems from specific circumstances such as urgent needs, unique capabilities of a single provider, or if only one source is reasonably available. Without further documentation, it's presumed the agency had a valid reason, but this limits transparency and potential cost savings.
How can the IRS ensure they are receiving fair value without competition?
Even without competition, the IRS can employ several strategies to ensure fair value. This includes conducting thorough market research to establish independent cost estimates, negotiating aggressively on price and terms, and closely monitoring performance and deliverables to ensure the services meet or exceed expectations.
What is the risk of vendor lock-in with this long-term, non-competitive contract?
There is a significant risk of vendor lock-in. The long duration and non-competitive nature mean the IRS is committed to Northrop Grumman for nearly four years. This can make it difficult and costly to switch providers later, potentially limiting future innovation and competitive pricing opportunities.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NON-COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COMBINATION (TWO OR MORE) (2)
Evaluated Preference: NONE
Contractor Details
Parent Company: Titan II Inc. (UEI: 016435559)
Address: 15010 CONFERENCE CENTER DR, CHANTILLY, VA, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $38,645,387
Exercised Options: $38,645,387
Current Obligation: $38,645,387
Parent Contract
Parent Award PIID: GS35F4506G
IDV Type: FSS
Timeline
Start Date: 2004-10-20
Current End Date: 2008-01-31
Potential End Date: 2008-01-31 00:00:00
Last Modified: 2013-08-06
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