Treasury's IRS awards $84.8M task order to Northrop Grumman for IT services
Contract Overview
Contract Amount: $84,809,916 ($84.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of the Treasury
Start Date: 2014-09-18
End Date: 2019-10-15
Contract Duration: 1,853 days
Daily Burn Rate: $45.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF THIS IS THE AWARD OF TASK ORDER 0014 AGAINST NORTHROP GRUMMAN'S TIPSS BASE CONTRACT. INITIAL FUNDING PROVIDED FOR CLINS 0002 AND 0004.
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $84.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF THIS IS THE AWARD OF TASK ORDER 0014 AGAINST NORTHROP GRUMMAN'S TIPSS BASE CONTRACT. INITIAL FUNDING PROVIDED FOR CLINS 0002 AND 0004. Key points: 1. The award is a task order against an existing base contract, indicating a continuation of services. 2. Northrop Grumman is a large, established defense and aerospace contractor, suggesting significant capabilities. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. The NAICS code 541519 covers 'Other Computer Related Services', a broad category. 5. The contract duration is over 5 years, suggesting a long-term need for these services.
Value Assessment
Rating: fair
The contract is a Cost Plus Fixed Fee type, which offers less price certainty than fixed-price contracts. Benchmarking against similar IT service contracts is difficult without more specific service details.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, as a task order against a base contract, the initial competition was for the base contract itself.
Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers, promoting competitive pricing. The specific value for money depends on the efficiency of service delivery.
Public Impact
Taxpayers may see improved IT infrastructure and services supporting IRS operations. The long-term nature of the contract suggests ongoing reliance on external IT support. Potential for cost efficiencies if services are delivered effectively under the CPFF structure. The award contributes to the revenue of a major defense contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize contractor to increase costs.
- Broad service category (541519) may obscure specific performance metrics.
- Long contract duration increases risk of scope creep or changing technological needs.
Positive Signals
- Awarded under full and open competition.
- Established contractor with proven capabilities.
- Task order against an existing base contract may streamline acquisition.
Sector Analysis
This contract falls within the Information Technology sector, specifically 'Other Computer Related Services'. Spending in this area is critical for government operations, but benchmarks vary widely based on the specific services procured.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses were likely not primary awardees, though they may participate as subcontractors.
Oversight & Accountability
Oversight would typically involve the contracting officer's representative (COR) monitoring performance and costs. The IRS, as part of the Treasury Department, is subject to various federal oversight mechanisms, including agency IG reviews.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- Broad NAICS code lacks specificity on services procured.
- Long contract duration (over 5 years) poses risks related to technological obsolescence and scope creep.
- Lack of small business set-aside may limit opportunities for smaller, innovative firms.
- Potential for vendor lock-in given the long-term nature and established relationship.
Tags
other-computer-related-services, department-of-the-treasury, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $84.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF THIS IS THE AWARD OF TASK ORDER 0014 AGAINST NORTHROP GRUMMAN'S TIPSS BASE CONTRACT. INITIAL FUNDING PROVIDED FOR CLINS 0002 AND 0004.
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 $84.8 million.
What is the period of performance?
Start: 2014-09-18. End: 2019-10-15.
What specific IT services are being procured under this task order, and how do they align with the IRS's strategic technology goals?
The NAICS code 541519, 'Other Computer Related Services,' is very broad. Understanding the specific deliverables, such as software development, system integration, IT support, or data management, is crucial. Aligning these services with the IRS's modernization efforts and cybersecurity needs will determine the true value and effectiveness of this significant expenditure.
How effectively is the Cost Plus Fixed Fee structure being managed to control costs and prevent potential overruns, given the contract's duration?
The Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to ensure costs remain reasonable and the fixed fee is justified. Regular audits, performance reviews, and clear communication channels between the IRS and Northrop Grumman are essential. Monitoring the 'allowable costs' and ensuring they align with the contract's scope is key to mitigating the inherent risk of cost escalation in CPFF agreements.
What metrics are in place to measure the performance and success of Northrop Grumman in delivering the 'Other Computer Related Services' over the 5-year period?
Effective performance measurement requires clearly defined Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) tied to the specific services rendered. These should cover aspects like system uptime, response times for support, project completion rates, and user satisfaction. Without specific metrics, assessing the value and effectiveness of the $84.8 million investment becomes challenging.
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: 4
Pricing Type: COST PLUS FIXED FEE (U)
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: $223,766,902
Exercised Options: $122,790,539
Current Obligation: $84,809,916
Actual Outlays: $4,313,045
Subaward Activity
Number of Subawards: 248
Total Subaward Amount: $682,300,159
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: 2014-09-18
Current End Date: 2019-10-15
Potential End Date: 2020-01-13 15:53:04
Last Modified: 2023-08-17
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