DoD's $431.7M Northrop Grumman Contract for Other Computer Services Shows Concerns
Contract Overview
Contract Amount: $431,672,563 ($431.7M)
Contractor: Northrop Grumman Information Technology Inc
Awarding Agency: Department of Defense
Start Date: 2004-07-07
End Date: 2012-09-30
Contract Duration: 3,007 days
Daily Burn Rate: $143.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: 200510!500520!2100!W912SU!ACA, NRCC - MISSION DIVISION !W911S004C0006 !A!N! !Y! !P00006!20050707!20050930!064679264!064679264!016435559!N!NORTHROP GRUMMAN INFORMATION T!2411 DULLES CORNER PARK !HERNDON !VA!20171!23950!103!20!FORT LEAVENWORTH !LEAVENWORTH !KANSAS !+000019492204!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !* !541519!E! !3! ! !B! ! !20200930!B! ! !A! !A!U!R!2!002!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! !W55C6Q!0001! !
Place of Performance
Location: FORT LEAVENWORTH, LEAVENWORTH County, KANSAS, 66027, UNITED STATES OF AMERICA
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $431.7 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200510!500520!2100!W912SU!ACA, NRCC - MISSION DIVISION !W911S004C0006 !A!N! !Y! !P00006!20050707!20050930!064679264!064679264!016435559!N!NORTHROP GRUMMAN INFORMATION T!2411 DULLES CORNER PARK !HERNDON !VA!20171!23950!103!20!FORT LEAVENWORTH !LEAV… Key points: 1. The contract awarded to Northrop Grumman Information Technology Inc. for $431.7 million is for "Other Computer Related Services." 2. Awarded by the Department of the Army, the contract spans from July 2004 to September 2012, with a duration of 3007 days. 3. The contract type is 'COST PLUS AWARD FEE', which can sometimes lead to less price certainty. 4. The contract was awarded under 'FULL AND OPEN COMPETITION', indicating a competitive bidding process. 5. The small business set-aside status is 'false', meaning small businesses were not specifically targeted for this award.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee (CPAF) structure, while allowing flexibility, can lead to higher costs compared to fixed-price contracts if not managed tightly. The total award amount of $431.7 million is substantial, and the effectiveness of the award fee mechanism in controlling costs needs careful monitoring.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. However, the Cost Plus Award Fee structure means the final price is not fixed upfront and depends on performance, which could impact the ultimate cost to the government.
Taxpayer Impact: While competition was utilized, the CPAF structure necessitates diligent oversight to ensure taxpayer funds are used efficiently and effectively, preventing cost overruns.
Public Impact
Significant taxpayer investment in IT services for the Department of Defense. Potential impact on the broader IT services market due to a large contract award. Ensures the Department of the Army has necessary computer-related services for its operations. The long duration of the contract suggests a sustained need for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure can lead to cost uncertainty.
- Long contract duration (3007 days) requires sustained oversight.
- No small business participation noted.
Positive Signals
- Awarded under full and open competition.
- Contract supports critical Department of Defense needs.
Sector Analysis
This contract falls within the Information Technology sector, specifically 'Other Computer Related Services'. The federal government is a major consumer of IT services, with spending often in the billions annually across various agencies. Benchmarks for similar large-scale IT service contracts vary widely based on scope and duration.
Small Business Impact
The contract was not set aside for small businesses, and the prime contractor is a large corporation. This means opportunities for small businesses to participate as subcontractors would depend on Northrop Grumman's procurement practices.
Oversight & Accountability
The Cost Plus Award Fee structure requires robust oversight to ensure performance targets are met and costs are controlled. The duration of the contract necessitates ongoing monitoring by the Department of the Army to ensure accountability and value for money.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Cost Plus Award Fee structure.
- Long contract duration.
- Lack of small business set-aside.
- Potential for cost overruns if not managed properly.
Tags
other-computer-related-services, department-of-defense, ks, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $431.7 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200510!500520!2100!W912SU!ACA, NRCC - MISSION DIVISION !W911S004C0006 !A!N! !Y! !P00006!20050707!20050930!064679264!064679264!016435559!N!NORTHROP GRUMMAN INFORMATION T!2411 DULLES CORNER PARK !HERNDON !VA!20171!23950!103!20!FORT LEAVENWORTH !LEAVENWORTH !KANSAS !+000019492204!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !* !541519!E! !3! ! !B! ! !202
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $431.7 million.
What is the period of performance?
Start: 2004-07-07. End: 2012-09-30.
What specific computer-related services are included under this contract, and how do they align with current DoD technological needs?
The contract is categorized under 'Other Computer Related Services' (NAICS 541519). While the data doesn't detail the specific services, this category typically encompasses IT consulting, system integration, and IT support. Given the contract's award date and duration, it likely supported IT infrastructure, software development, or operational support systems relevant to the Department of the Army during that period.
How effectively did the award fee mechanism control costs and incentivize performance for Northrop Grumman over the contract's lifespan?
The effectiveness of the award fee mechanism is crucial for a Cost Plus Award Fee contract. Without detailed performance reports and fee payouts, it's difficult to definitively assess. However, the substantial total award suggests significant work was performed. Diligent oversight by the Army would have been necessary to ensure the fees paid were justified by achieved performance metrics.
What was the competitive landscape for these 'Other Computer Related Services' at the time of award, and did the full and open competition yield optimal pricing?
The 'full and open competition' designation indicates multiple bidders likely participated. This process is designed to foster competitive pricing. However, the Cost Plus Award Fee structure means the final price isn't fixed, making direct price comparisons challenging. The ultimate value derived from the competition depends on the government's ability to negotiate favorable terms and manage the award fee structure effectively.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer 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: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 2411 DULLES CORNER PARK, HERNDON, VA, 20171
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2004-07-07
Current End Date: 2012-09-30
Potential End Date: 2014-09-30 00:00:00
Last Modified: 2015-03-30
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