Northrop Grumman's $232.7M Army contract for Fort Irwin mission support shows fair value with moderate competition

Contract Overview

Contract Amount: $232,678,049 ($232.7M)

Contractor: Northrop Grumman Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-08-01

End Date: 2018-05-31

Contract Duration: 1,399 days

Daily Burn Rate: $166.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::CT::IGF FORT IRWIN NATIONAL TRAINING CENTER MISSION SUPPORT SERVICES (NTCMSS)

Place of Performance

Location: FORT IRWIN, SAN BERNARDINO County, CALIFORNIA, 92310

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $232.7 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: IGF::CT::IGF FORT IRWIN NATIONAL TRAINING CENTER MISSION SUPPORT SERVICES (NTCMSS) Key points: 1. The contract's value appears reasonable when benchmarked against similar facilities support services. 2. Competition was robust, with five bidders vying for the contract, suggesting a healthy market. 3. The cost-plus-fixed-fee structure introduces some cost-reimbursement risk, but oversight should mitigate this. 4. Performance context is critical; the duration and scope indicate a significant operational role. 5. This contract positions Northrop Grumman as a key provider of essential base support services. 6. The definitive contract award type suggests a well-defined scope of work.

Value Assessment

Rating: fair

The total award amount of $232.7 million over approximately four years for facilities support services at Fort Irwin appears to be within a reasonable range when compared to similar large-scale base operations contracts. While specific per-unit cost data is not readily available, the fixed-fee component suggests a degree of cost control by the government. Benchmarking against industry standards for facilities management and logistical support at military installations of this size indicates that the pricing is likely competitive, though a detailed cost breakdown would allow for a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. Five bidders participated in the competition, which suggests a reasonable level of market interest and a degree of price discovery. The presence of multiple bidders generally leads to more competitive pricing and a wider range of technical solutions, benefiting the government.

Taxpayer Impact: The full and open competition with multiple bidders likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

Military personnel and civilian staff at Fort Irwin National Training Center benefit from uninterrupted base operations and support services. Essential services include facilities maintenance, logistics, transportation, and potentially other mission-critical support functions. The geographic impact is concentrated at Fort Irwin, California, ensuring the operational readiness of this key training facility. Workforce implications include direct employment by Northrop Grumman and its subcontractors, as well as indirect support for the base's operational staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to incur costs, requiring diligent oversight to manage expenditures.
The long duration of the contract (nearly four years) necessitates ongoing performance monitoring to ensure sustained quality.
Reliance on a single large contractor for critical base support functions can create dependency and potential single points of failure if not managed proactively.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
The definitive contract award suggests a clear understanding of requirements and scope.
Northrop Grumman is a large, established defense contractor with significant experience in similar support services.

Sector Analysis

Facilities Support Services (NAICS 561210) is a significant sector within government contracting, encompassing a wide range of services necessary for the operation and maintenance of federal facilities. This contract, valued at over $232 million, represents a substantial portion of spending within this category for the Department of the Army at a major training installation. The market is characterized by large defense contractors and specialized service providers competing for multi-year, high-value contracts. Benchmarks for similar base operations and support services contracts often range from tens to hundreds of millions of dollars annually, depending on the size and complexity of the installation.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. While the prime contractor is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on Northrop Grumman's procurement practices and the specific requirements outlined in the contract. Analysis of subcontracting plans would be necessary to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee is earned appropriately. Transparency is facilitated through contract reporting mechanisms. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Base Operations Support (BOS)
Logistics and Supply Chain Management Services
Facilities Maintenance and Repair
Mission Support Services
Department of Defense Contracting

Risk Flags

Cost-plus-fixed-fee structure requires diligent cost oversight.
Long contract duration necessitates sustained performance monitoring.
Potential for contractor dependency on critical base support functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $232.7 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. IGF::CT::IGF FORT IRWIN NATIONAL TRAINING CENTER MISSION SUPPORT SERVICES (NTCMSS)

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN TECHNICAL SERVICES, 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 $232.7 million.

What is the period of performance?

Start: 2014-08-01. End: 2018-05-31.

What is Northrop Grumman's track record with similar base support contracts?

Northrop Grumman Technical Services, Inc. has a substantial track record in providing complex support services to government agencies, including the Department of Defense. They have historically managed large-scale logistics, base operations, and technical support contracts for various military installations. Their experience often includes managing facilities, transportation, maintenance, and mission-critical support functions. While specific performance metrics for this particular Fort Irwin contract (NTCMSS) are not detailed here, the company's overall profile suggests a capacity to handle such extensive requirements. Past performance evaluations on similar contracts would provide a more granular understanding of their reliability and effectiveness in delivering these services.

How does the pricing of this contract compare to industry benchmarks for similar services?

The total award of $232.7 million over approximately 46 months (from August 2014 to May 2018) equates to roughly $5 million per month. For a large training installation like Fort Irwin, which requires extensive facilities management, logistics, and operational support, this monthly expenditure appears to be within the expected range for comprehensive base support services. Benchmarking against other large military installation support contracts suggests that costs can vary significantly based on location, scope of services, and specific requirements. Without detailed cost breakdowns or direct comparisons to identical service scopes at comparable installations, it's challenging to definitively state if it's 'excellent' or 'concerning,' but 'fair' seems appropriate given the scale and nature of the services.

What are the primary risks associated with this cost-plus-fixed-fee contract structure?

The primary risk with a Cost-Plus-Fixed-Fee (CPFF) contract structure is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. This can incentivize the contractor to incur costs, as their profit is guaranteed regardless of the total cost incurred (as long as costs are allowable). The government bears the risk of cost increases above the estimated cost. Effective risk mitigation requires robust government oversight, detailed cost tracking, and clear performance standards to ensure that costs are reasonable and allocable to the contract. Audits and regular reviews are essential to manage this risk.

How effective are the oversight mechanisms for this type of contract?

Oversight for CPFF contracts like this one is typically managed through a combination of government contracting officers, program managers, and technical representatives. These roles are responsible for monitoring contractor performance, verifying costs, ensuring compliance with contract terms, and approving payments. For large, complex contracts such as the NTCMSS at Fort Irwin, dedicated government personnel are usually assigned to oversee daily operations and financial expenditures. The effectiveness of these mechanisms hinges on the resources allocated to oversight, the expertise of the government personnel, and the clarity of the contract's performance work statement. Regular audits and performance reviews are standard components of effective oversight.

What is the historical spending trend for mission support services at Fort Irwin?

Historical spending data for mission support services at Fort Irwin prior to or following this specific contract (2014-2018) would provide valuable context. Without access to that data, it's difficult to establish a trend. However, the $232.7 million awarded over roughly four years suggests a consistent annual spending level of approximately $58 million for these services. This level of expenditure is typical for major military installations requiring comprehensive support. Analyzing prior contracts for similar services at Fort Irwin, or comparing spending patterns at other large training centers, would help determine if this contract represents an increase, decrease, or stable level of investment in base support.

What are the implications of awarding a definitive contract for this service?

Awarding a definitive contract, as opposed to an indefinite-delivery/indefinite-quantity (IDIQ) contract or a letter contract, implies that the scope of work, requirements, and estimated costs were sufficiently defined at the time of award. This provides a higher degree of certainty for both the government and the contractor regarding the services to be performed and the expected financial commitment. For the government, it means a clearer budget allocation and less uncertainty about future spending. For the contractor, it offers a stable basis for resource planning and execution. This type of award is generally preferred when requirements are well-understood and stable.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911S813R0014

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $237,050,565

Exercised Options: $232,678,049

Current Obligation: $232,678,049

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline