DoD's $54M Computer Systems Design Contract with Northrop Grumman: A 4-Year Time & Materials Award

Contract Overview

Contract Amount: $54,115,019 ($54.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2012-07-29

End Date: 2016-07-28

Contract Duration: 1,460 days

Daily Burn Rate: $37.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TRAVEL/OTHER DIRECT COSTS (ODC)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20310

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $54.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TRAVEL/OTHER DIRECT COSTS (ODC) Key points: 1. Significant spending on computer systems design services. 2. Awarded to a major defense contractor, Northrop Grumman. 3. Full and open competition was utilized. 4. Contract duration was 4 years, indicating a substantial project.

Value Assessment

Rating: fair

The contract's Time and Materials (T&M) pricing structure can lead to cost overruns if not closely managed. Benchmarking against similar T&M contracts for computer systems design is crucial to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition suggests a robust price discovery process. However, T&M contracts inherently carry higher risk for cost certainty compared to fixed-price awards.

Taxpayer Impact: Taxpayers may face increased costs due to the T&M nature of the contract, which lacks a ceiling on labor hours.

Public Impact

Defense spending on IT services represents a significant portion of the federal budget. The use of T&M contracts can be a concern for cost control and predictability. Long-term contracts like this require ongoing oversight to ensure performance and value. The specific services provided under 'Computer Systems Design Services' are broad and require detailed understanding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

The IT services sector is a major area of federal spending. Benchmarks for computer systems design services vary widely based on complexity and duration, but $54M over 4 years is a substantial investment.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). There is no indication of small business subcontracting goals or performance within this data.

Oversight & Accountability

The contract's duration and T&M structure necessitate strong oversight from the Department of the Army to manage costs and ensure deliverables meet requirements. Tracking performance metrics and conducting regular reviews are essential.

Related Government Programs

Risk Flags

Tags

computer-systems-design-services, department-of-defense, dc, definitive-contract, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TRAVEL/OTHER DIRECT COSTS (ODC)

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $54.1 million.

What is the period of performance?

Start: 2012-07-29. End: 2016-07-28.

What specific computer systems design services were procured under this contract, and how did their complexity justify the T&M pricing structure?

The provided data categorizes the service as 'Computer Systems Design Services' (NAICS 541512) but lacks specifics on the actual tasks performed. T&M pricing is typically used when the scope of work is not well-defined or is expected to evolve significantly. Without detailed task descriptions, it's difficult to definitively assess if T&M was the most appropriate pricing model for value.

Given the T&M structure and 4-year duration, what mechanisms were in place to control costs and mitigate the risk of contractor inefficiency?

Effective cost control in T&M contracts relies heavily on robust oversight, including detailed timesheet reviews, labor rate verification, and clear performance metrics. The contract's 'DEFINITIVE CONTRACT' type suggests a commitment, but the T&M nature requires proactive management to prevent scope creep and ensure efficient resource utilization by Northrop Grumman.

How does the $54M expenditure compare to industry benchmarks for similar computer systems design projects of comparable scope and duration?

Direct comparison is challenging without granular details on the specific services rendered. However, $54 million over four years averages $13.5 million annually. This figure needs to be benchmarked against IT service contracts of similar complexity, duration, and geographic location, considering the contractor's overhead and profit margins.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesComputer Systems Design and Related ServicesComputer Systems Design Services

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91WAW12R0009

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 2340 DULLES CORNER BOULEVARD, HERNDON, VA, 20171

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: $54,255,641

Exercised Options: $54,255,641

Current Obligation: $54,115,019

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline

Start Date: 2012-07-29

Current End Date: 2016-07-28

Potential End Date: 2016-07-28 00:00:00

Last Modified: 2025-12-31

More Contracts from Northrop Grumman Systems Corporation

View all Northrop Grumman Systems Corporation federal contracts →

Other Department of Defense Contracts

View all Department of Defense contracts →

Explore Related Government Spending