Northrop Grumman's $20M contract for IRS data analytics services awarded under full and open competition
Contract Overview
Contract Amount: $20,066,575 ($20.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of the Treasury
Start Date: 2012-03-09
End Date: 2017-06-19
Contract Duration: 1,928 days
Daily Burn Rate: $10.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF CRITICAL FUNCTIONS - DATA ANALYTICS PROJECTS-TO 4021-TIPSS 4
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20224
Plain-Language Summary
Department of the Treasury obligated $20.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF CRITICAL FUNCTIONS - DATA ANALYTICS PROJECTS-TO 4021-TIPSS 4 Key points: 1. Contract awarded for critical data analytics functions, indicating a need for advanced analytical capabilities. 2. The contract was competed fully and openly, suggesting a competitive environment for pricing and service. 3. A duration of 1928 days (over 5 years) points to a long-term need for these services. 4. The firm-fixed-price structure aims to control costs and provide predictability. 5. Services were delivered to the IRS, a large agency with significant data processing requirements. 6. The contract value of approximately $20 million over its term warrants scrutiny for value for money.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The firm-fixed-price structure suggests an attempt to manage costs, but the overall value depends on the effectiveness and efficiency of the data analytics delivered. Given the duration and scope, the price appears within a reasonable range for complex IT services, but a detailed cost-benefit analysis would be needed for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a moderate level of competition. While full and open competition is generally favorable for price discovery, the specific number of bidders can influence the intensity of that competition.
Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging competitive pricing and potentially leading to better service quality due to a wider pool of qualified vendors.
Public Impact
Taxpayers benefit from improved IRS data analysis capabilities, potentially leading to more efficient tax administration and revenue collection. The IRS receives support for critical data analytics projects, enhancing its ability to manage and interpret vast amounts of financial information. Services are primarily delivered within the District of Columbia, impacting the local IT services sector. The contract supports specialized IT roles within the data analytics field.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in given the long contract duration and specialized nature of data analytics.
- Ensuring the data analytics delivered directly translate into measurable improvements in IRS operations and taxpayer services.
- The effectiveness of the firm-fixed-price model in incentivizing innovation and efficiency over the contract's lifespan.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- Firm-fixed-price contract type helps manage cost certainty for the government.
- Long contract duration indicates a sustained need and potential for deep expertise development.
Sector Analysis
This contract falls within the broader Information Technology (IT) sector, specifically focusing on data analytics services. The IT services market, particularly for specialized analytics, is large and growing, driven by the increasing volume of data generated across government agencies. Comparable spending benchmarks for similar data analytics contracts within federal agencies can vary widely based on scope, complexity, and duration. This contract represents a significant investment in enhancing the IRS's analytical capabilities.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless the prime contractor voluntarily 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 IRS. The firm-fixed-price structure provides a degree of cost control. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- IRS IT Modernization Programs
- Federal Data Analytics Initiatives
- Government IT Services Contracts
- Contracting for Professional Services
Risk Flags
- Contract duration exceeds 5 years, requiring careful monitoring for continued relevance and value.
- Potential for vendor lock-in due to specialized nature of data analytics services.
- Need to ensure clear performance metrics are tied to taxpayer benefits and operational improvements.
Tags
it, data-analytics, irs, department-of-the-treasury, northrop-grumman-systems-corporation, firm-fixed-price, delivery-order, full-and-open-competition, professional-services, district-of-columbia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $20.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::CT::IGF CRITICAL FUNCTIONS - DATA ANALYTICS PROJECTS-TO 4021-TIPSS 4
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 $20.1 million.
What is the period of performance?
Start: 2012-03-09. End: 2017-06-19.
What specific data analytics capabilities were delivered under this contract?
The provided data does not detail the specific data analytics capabilities delivered. However, the contract's designation as 'IGF CRITICAL FUNCTIONS - DATA ANALYTICS PROJECTS' suggests services related to data processing, analysis, modeling, and reporting. This could encompass areas such as fraud detection, taxpayer behavior analysis, operational efficiency improvements, and risk assessment. The IRS handles vast amounts of sensitive financial data, so the analytics likely support core functions related to tax administration, compliance, and revenue collection.
How does the $20 million contract value compare to similar IRS data analytics contracts?
Without access to a comprehensive database of all IRS data analytics contracts, a direct comparison is difficult. However, $20 million over approximately five years (1928 days) averages around $4 million per year. This figure is moderate for large-scale IT services within a federal agency of the IRS's size. Contracts for enterprise-wide data warehousing, advanced AI/ML analytics platforms, or large-scale data migration projects could easily exceed this amount. Conversely, smaller, more focused analytical tool implementations might be less expensive. The value is reasonable for specialized data analytics support.
What were the primary risks associated with this contract, and how were they mitigated?
Potential risks for a contract of this nature include technical challenges in data integration and analysis, scope creep, contractor performance issues, and data security breaches. Mitigation strategies would typically involve robust contract management, clear performance metrics, regular progress reviews, strong cybersecurity protocols, and adherence to the firm-fixed-price structure to limit cost overruns. The IRS's established procurement and oversight processes are designed to address these risks, though specific mitigation plans are not detailed in the provided data.
What is Northrop Grumman's track record with the IRS and similar federal agencies for data analytics?
Northrop Grumman is a major defense contractor with extensive experience in IT services, systems integration, and data analytics across various federal agencies, including the Department of Defense, NASA, and intelligence agencies. While specific details of their past performance with the IRS on data analytics projects are not provided here, their general profile suggests they possess the technical expertise and capacity to handle complex government IT contracts. A deeper dive into past performance evaluations and other contracts would offer a more precise assessment.
How has IRS spending on data analytics evolved over time, and does this contract fit a trend?
The IRS has increasingly focused on leveraging data analytics to improve tax administration, enhance compliance, and detect fraud. Spending in this area has generally trended upwards as technology advances and the volume of data grows. This $20 million contract, awarded between 2012 and 2017, falls within a period of significant IT modernization efforts at the IRS. It likely represents a component of a broader strategy to enhance data analytics capabilities, fitting into a trend of increased investment in data-driven decision-making within the agency.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
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)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 4807 STONECROFT BLVD, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,163,398
Exercised Options: $22,025,272
Current Obligation: $20,066,575
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TIRNO11D00027
IDV Type: IDC
Timeline
Start Date: 2012-03-09
Current End Date: 2017-06-19
Potential End Date: 2017-06-19 14:42:57
Last Modified: 2025-04-08
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