Northrop Grumman IT contract for IT services awarded by OPM for $27.5M over 5 years

Contract Overview

Contract Amount: $27,461,850 ($27.5M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Office of Personnel Management

Start Date: 2010-08-05

End Date: 2015-06-23

Contract Duration: 1,783 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DATA CONVERSION

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 $27.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: DATA CONVERSION Key points: 1. The contract represents a significant investment in IT infrastructure and services for the Office of Personnel Management. 2. Competition dynamics for this contract were characterized by full and open competition, suggesting a robust bidding process. 3. Performance risk appears moderate, given the established nature of IT services and the contractor's experience. 4. The contract's duration of five years allows for sustained service delivery and potential for long-term strategic alignment. 5. This contract falls within the broader IT services sector, a critical area for government operations and modernization. 6. The firm fixed-price contract type provides cost certainty for the government, shifting performance risk to the contractor.

Value Assessment

Rating: good

Benchmarking this contract's value requires access to comparable IT service contracts within the federal government. However, the $27.5 million award over five years, averaging $5.5 million annually, appears within a reasonable range for comprehensive IT support services for an agency like OPM. The firm fixed-price structure suggests that the contractor assumed the risk of cost overruns, which can be advantageous for the government if managed effectively. Further analysis would involve comparing the specific services rendered against industry standards and the pricing of similar task orders if this was a broader BPA.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of competition, which is beneficial for price discovery and ensuring the government receives optimal value.

Taxpayer Impact: A competitive bidding process like full and open competition helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation from contractors.

Public Impact

Federal employees and retirees benefit from the reliable operation of IT systems supporting personnel management and benefits. Essential IT services, including software, hardware, and network support, are delivered to the Office of Personnel Management. The contract's impact is primarily national, supporting a federal agency with a broad reach. The contract supports IT professionals and potentially other roles within Northrop Grumman and its subcontractors, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific technologies or proprietary solutions are heavily utilized.
Dependence on a single large contractor for critical IT infrastructure could pose risks if performance falters.
Ensuring continuous alignment with evolving technological advancements and agency needs over the contract's lifespan.

Positive Signals

Award to an experienced IT services provider with a track record in government contracting.
Firm fixed-price contract structure provides budget certainty for the agency.
Full and open competition suggests a competitive award process, likely resulting in favorable terms.
The contract's duration allows for stable service delivery and relationship building.

Sector Analysis

The Information Technology (IT) sector is a cornerstone of modern government operations, encompassing a vast array of services from software development and hardware procurement to cybersecurity and cloud computing. Federal spending in this sector is substantial, driven by the need to modernize legacy systems, enhance digital services, and protect sensitive data. Contracts like this one, for comprehensive IT support, are common across agencies. Benchmarks for IT services vary widely based on scope, complexity, and duration, but annual spending in the tens of millions is typical for large federal agencies requiring robust IT infrastructure.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses stemming from a set-aside provision. The primary contractor, Northrop Grumman, is a large business. While large prime contractors often engage small businesses as subcontractors, this contract's structure does not mandate it. The impact on the small business ecosystem would depend on Northrop Grumman's subcontracting practices, which are not detailed here.

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, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is generally facilitated through contract award databases and reporting requirements. Depending on the nature of the services and potential risks, an Inspector General's office may also have jurisdiction for audits and investigations.

Related Government Programs

IT Services
Information Technology Support
Cloud Computing Services
Software Development
Network Infrastructure Management

Risk Flags

Cybersecurity Risk
Performance Dependency
Technological Obsolescence
Vendor Lock-in Potential

Frequently Asked Questions

What is this federal contract paying for?

Office of Personnel Management awarded $27.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. DATA CONVERSION

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 $27.5 million.

What is the period of performance?

Start: 2010-08-05. End: 2015-06-23.

What is Northrop Grumman's track record with the Office of Personnel Management and similar federal agencies for IT services?

Northrop Grumman Information Technology Inc. has a significant history of performing IT services for various U.S. federal agencies, including the Office of Personnel Management (OPM). Their experience spans a wide range of IT domains, such as enterprise IT, cybersecurity, software development, and mission-critical systems support. For OPM specifically, Northrop Grumman has been involved in contracts related to personnel data systems, IT infrastructure modernization, and administrative support systems. Their broader federal portfolio includes work with the Department of Defense, NASA, and other civilian agencies, demonstrating a capacity to handle large-scale, complex IT requirements. This extensive background suggests a familiarity with government procurement processes, security protocols, and the unique operational needs of federal entities, which is a positive indicator for contract performance.

How does the $27.5 million contract value compare to OPM's overall IT spending or similar contracts awarded to other vendors?

The $27.5 million contract value for Northrop Grumman IT services over five years, averaging approximately $5.5 million annually, represents a moderate portion of OPM's overall IT budget. To provide a precise comparison, one would need OPM's total annual IT spending figures and data on other IT contracts awarded during the same period. However, for an agency managing sensitive personnel data for millions of federal employees and retirees, this level of investment in IT support is not unusual. Similar contracts for comprehensive IT support services to agencies of OPM's size typically range from several million to tens of millions of dollars annually. Without specific OPM budget data or a direct comparison of service scope, it's challenging to definitively benchmark this award, but it appears consistent with the scale of IT needs for a federal personnel agency.

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

Primary risks associated with this IT services contract include potential performance issues, cybersecurity vulnerabilities, cost overruns (though mitigated by firm fixed-price), and vendor lock-in. Performance risks are mitigated by the contractor's experience and the firm fixed-price structure, which incentivizes timely and quality delivery. Cybersecurity risks are managed through stringent government security requirements, compliance mandates (e.g., FISMA), and potentially specific security clauses within the contract. Vendor lock-in can be a concern if proprietary solutions are used; mitigation involves ensuring clear data ownership, interoperability standards, and phased transition plans. The contract's five-year duration also presents a risk of technological obsolescence if not managed proactively through change management and modernization efforts.

How effective has Northrop Grumman been in delivering IT services under similar federal contracts in the past?

Northrop Grumman has a long and generally successful history of delivering IT services across the federal government. Their performance on numerous large-scale contracts, including those involving complex systems integration, infrastructure management, and software development, indicates a strong capability. Publicly available contract performance data (e.g., from CPARS, though not directly accessible here) often reflects their ability to meet technical requirements and delivery schedules. While specific performance metrics for this exact OPM contract are not detailed, their consistent presence as a prime contractor on significant federal IT programs suggests a reliable performance record. Agencies typically conduct thorough reviews of past performance during the procurement process, and Northrop Grumman's continued success in winning competitive bids points to a generally positive track record.

What are the historical spending patterns for IT services at the Office of Personnel Management, and how does this contract fit in?

The Office of Personnel Management (OPM) historically spends significant amounts on IT services to manage its critical functions related to federal employee benefits, retirement, and personnel data. Annual IT spending for OPM typically falls in the range of tens to hundreds of millions of dollars, depending on modernization initiatives and operational needs. This $27.5 million contract, awarded over five years, represents a consistent and substantial investment in core IT support. It likely aligns with OPM's ongoing efforts to maintain, secure, and potentially upgrade its IT infrastructure and systems. Such contracts are essential for ensuring the continuity of operations and the secure handling of sensitive federal employee information, fitting into a pattern of sustained IT service procurement by the agency.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DR, MCLEAN, VA, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,267,179

Exercised Options: $27,461,850

Current Obligation: $27,461,850

Parent Contract

Parent Award PIID: OPM1710A0001

IDV Type: BPA

Timeline