Northrop Grumman's $62.8M IT contract for SSA services shows fair value but limited competition

Contract Overview

Contract Amount: $62,840,289 ($62.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Social Security Administration

Start Date: 2014-09-29

End Date: 2015-09-28

Contract Duration: 364 days

Daily Burn Rate: $172.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: THIS IS TASK ORDER #0017 (TIME AND MATERIALS ORDER) AGAINST EXISTING ITSSC CONTRACT SS00-10-60082 WITH NORTHUP GRUMMAN. IGF::CT::IGF

Place of Performance

Location: BALTIMORE, BALTIMORE (CITY) County, MARYLAND, 21235, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $62.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THIS IS TASK ORDER #0017 (TIME AND MATERIALS ORDER) AGAINST EXISTING ITSSC CONTRACT SS00-10-60082 WITH NORTHUP GRUMMAN. IGF::CT::IGF Key points: 1. The contract represents a Time and Materials (T&M) task order against an existing ITSSC contract, indicating a need for flexible IT support. 2. While the total award value is substantial, the per-unit cost analysis is crucial for determining true value for money. 3. The 'full and open competition' designation suggests a broad solicitation, but the number of actual bidders is key to understanding competitive dynamics. 4. The contract's duration and T&M nature introduce potential risks related to cost overruns if not managed effectively. 5. This contract falls under 'Other Computer Related Services,' a broad category within the IT sector. 6. The absence of small business set-aside flags suggests this was not specifically targeted to smaller enterprises.

Value Assessment

Rating: fair

The award of $62.8 million for a one-year IT services contract appears within a reasonable range for large-scale IT support, but a detailed benchmark against similar T&M contracts for 'Other Computer Related Services' is needed. Without specific per-unit cost data (e.g., hourly rates for different labor categories), a precise value-for-money assessment is challenging. The T&M pricing structure inherently carries a risk of higher costs if not closely monitored and managed against established labor categories and ceilings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that the solicitation was broadly advertised to all responsible sources. However, the number of bids received is not provided, which is critical for assessing the actual level of competition. A high number of bidders typically leads to better price discovery and potentially lower costs for the government. A low number of bidders, even under full and open competition, could indicate market limitations or a lack of interest from potential contractors.

Taxpayer Impact: While full and open competition is the preferred method, the true benefit to taxpayers depends on the number of responsive bids received. If only a few contractors bid, the government may not have achieved the most competitive pricing possible.

Public Impact

The Social Security Administration (SSA) benefits from continued IT support services, crucial for maintaining its operational infrastructure. These services likely encompass a range of IT functions, potentially including system maintenance, development, and support, ensuring the smooth operation of SSA's critical systems. The contract's impact is primarily national, supporting the IT backbone of a federal agency serving millions of Americans. The workforce implications are tied to the IT professionals employed by Northrop Grumman to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not strictly managed and monitored against labor categories and ceilings.
The broad 'Other Computer Related Services' category lacks specificity, making it harder to benchmark performance and cost against precise service offerings.
Lack of data on the number of bidders under 'full and open competition' limits the assessment of competitive pressure on pricing.
The contract duration of one year, while standard for task orders, requires continuous oversight to ensure ongoing value.

Positive Signals

Awarded under an existing ITSSC contract, suggesting a pre-vetted contractor and potentially streamlined acquisition process.
The 'full and open competition' designation indicates an effort to solicit from a wide range of potential providers.
The contract is for a specific task order, implying a defined scope of work and objective.
The award is to a large, established contractor (Northrop Grumman) with a significant presence in the federal IT sector.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically under 'Other Computer Related Services' (NAICS code 541519). This category encompasses a wide array of IT services not elsewhere classified, including IT consulting, system integration, and IT support. The federal IT market is substantial, with agencies like the Social Security Administration being major consumers of these services to maintain and modernize their complex systems. Benchmarking this contract's value would require comparison to other large-scale IT support contracts awarded to major system integrators for similar government functions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scope and nature of the required IT services were likely beyond the typical capabilities or contract vehicles available to small businesses, or that the competition was open to all responsible sources regardless of size. Consequently, there are no direct subcontracting implications for small businesses mandated by a set-aside provision within this specific award. The impact on the small business ecosystem is neutral in terms of direct set-aside benefits.

Oversight & Accountability

Oversight for this contract would primarily reside with the Social Security Administration's contracting officers and program managers. As a task order against an existing ITSSC contract, there may be overarching oversight mechanisms established at the prime contract level. Transparency is facilitated through federal procurement databases like FPDS-NG, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected or identified.

Related Government Programs

IT Professional Services
IT Support Services
Cloud Computing Services
Cybersecurity Services
System Integration Services
IT Modernization Contracts

Risk Flags

Potential for cost overruns due to T&M pricing structure.
Lack of specific performance metrics (KPIs/SLAs) in summary data.
Limited insight into the actual competitive landscape despite 'full and open' designation.
Broad 'Other Computer Related Services' category hinders precise benchmarking.

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $62.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THIS IS TASK ORDER #0017 (TIME AND MATERIALS ORDER) AGAINST EXISTING ITSSC CONTRACT SS00-10-60082 WITH NORTHUP GRUMMAN. IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Social Security Administration (Social Security Administration).

What is the total obligated amount?

The obligated amount is $62.8 million.

What is the period of performance?

Start: 2014-09-29. End: 2015-09-28.

What is the specific breakdown of labor categories and their associated hourly rates within this Time and Materials contract, and how do these compare to government-wide IT labor rate benchmarks?

The provided data does not include a detailed breakdown of labor categories or their specific hourly rates for this Time and Materials (T&M) task order. To assess value for money, it would be essential to obtain this information. Government-wide IT labor rate benchmarks, often established through mechanisms like the GSA Schedules or agency-specific rate agreements, serve as crucial comparison points. If Northrop Grumman's rates for comparable labor categories (e.g., senior systems analyst, network engineer, help desk technician) are significantly higher than these benchmarks, it would indicate potential overpricing or a need for stronger justification based on unique skill sets or service levels. Without this granular data, a definitive assessment of cost-effectiveness is limited.

How many bids were actually received for this 'full and open competition' task order, and what was the range of proposed prices?

The provided data states the contract was awarded under 'full and open competition' but does not specify the number of bids received or the range of proposed prices. This information is critical for evaluating the effectiveness of the competition. A high number of bids (e.g., 5 or more) typically suggests robust competition, which usually drives prices down and increases the likelihood of the government receiving the best value. Conversely, if only one or two bids were received, it might indicate market limitations, high barriers to entry, or that the competition, while technically 'full and open,' did not result in significant price discovery. Understanding the competitive landscape is key to assessing whether the government secured a fair price.

What specific IT services fall under the 'Other Computer Related Services' (NAICS 541519) category for this contract, and how does the scope align with typical ITSSC contract deliverables?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that can encompass a wide range of IT activities not specifically defined under other codes. For this contract with Northrop Grumman, these services likely include IT consulting, system integration, IT project management, network support, and potentially specialized technical assistance. The IT Services Small Business (ITSSC) contract vehicle, against which this task order was issued, is designed to provide comprehensive IT support. Therefore, the scope is expected to align with the general purpose of the ITSSC, which is to procure a broad spectrum of IT services. However, the precise nature of the services delivered under this specific task order (Task Order #0017) would require examining the Statement of Work (SOW) associated with the award.

What is the historical spending pattern for IT services by the Social Security Administration, and how does this $62.8 million award compare to previous years or similar contracts?

The provided data focuses on a single contract award and does not offer historical spending patterns for the Social Security Administration (SSA) or comparable contracts. To assess this $62.8 million award in context, one would need to analyze SSA's overall IT budget and spending trends over several fiscal years. Comparing this award to the value and duration of previous IT support contracts awarded by SSA, particularly those for similar services (e.g., system maintenance, network operations, application development), would provide valuable insights. Additionally, benchmarking against IT spending by other large federal agencies with similar missions could offer further perspective on whether this award represents typical or outlier spending.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how is Northrop Grumman's performance being measured?

The provided data does not contain information regarding the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. These metrics are crucial for objectively measuring the performance of Northrop Grumman and ensuring the Social Security Administration receives the contracted services effectively. Typically, T&M contracts, especially those against larger IDIQs like ITSSC, will have defined performance standards outlined in the Statement of Work (SOW). These might include metrics related to system uptime, response times for support requests, project completion timelines, and adherence to security protocols. Without access to the SOW or performance reports, assessing the contractor's performance and the overall effectiveness of the service delivery is not possible.

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: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DR, MC LEAN, VA, 22102

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: $62,840,289

Exercised Options: $62,840,289

Current Obligation: $62,840,289

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $55,200,760

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SS001060082

IDV Type: IDC

Timeline