DOJ's $30.7M IT Security Contract Awarded to Northrop Grumman for Computer Systems Design

Contract Overview

Contract Amount: $30,756,601 ($30.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Justice

Start Date: 2008-03-01

End Date: 2012-01-31

Contract Duration: 1,431 days

Daily Burn Rate: $21.5K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IT SECURITY SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20530

State: District of Columbia Government Spending

Plain-Language Summary

Department of Justice obligated $30.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IT SECURITY SUPPORT SERVICES Key points: 1. Contract awarded on a competitive basis, suggesting potential for price discovery. 2. Duration of over 3 years indicates a significant, ongoing need for services. 3. Time and Materials pricing structure may pose cost control challenges. 4. Services fall under IT security support, a critical area for federal agencies. 5. Contractor has a substantial presence in the federal IT services market. 6. Geographic focus on Washington D.C. aligns with agency headquarters.

Value Assessment

Rating: fair

The contract's total value of approximately $30.7 million over its 3-year duration represents a significant investment in IT security. Benchmarking this against similar IT security support contracts is challenging without more granular data on service scope and performance. The Time and Materials (T&M) pricing model, while offering flexibility, can lead to cost overruns if not managed diligently. The contract's value appears moderate for a large federal agency like the Department of Justice, but the T&M structure warrants close monitoring for value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle that allowed for full and open competition. The presence of two bidders suggests a degree of competition, but the exact number of proposals received and the evaluation process would provide a clearer picture of the competitive landscape. A limited number of bidders can sometimes indicate a specialized market or high barriers to entry.

Taxpayer Impact: The competitive nature of this award is generally positive for taxpayers, as it should have encouraged multiple vendors to offer their best pricing and technical solutions, potentially leading to a more cost-effective outcome compared to a sole-source award.

Public Impact

Federal agencies, specifically the Department of Justice, benefit from enhanced IT security infrastructure and support. Services delivered include computer systems design and IT security support, crucial for protecting sensitive government data. The primary geographic impact is within the District of Columbia, supporting DOJ's operational needs. The contract supports a workforce skilled in IT security and computer systems design, likely within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to unpredictable costs if not managed effectively.
Limited competition (2 bidders) might suggest a less robust price discovery process than ideal.
The contract duration of over 3 years requires sustained oversight to ensure continued value.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process.
Northrop Grumman is a large, established contractor with significant experience in federal IT services.
The contract addresses a critical need for IT security support within the Department of Justice.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and IT security. The federal IT services market is vast and highly competitive, with numerous large and small businesses vying for contracts. Spending in this area is consistently high due to the increasing reliance on technology and the growing threat landscape. This contract represents a portion of the government's overall investment in cybersecurity and IT infrastructure management, comparable to spending by other large federal agencies on similar support services.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major defense and technology contractor, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime contractor. The absence of small business set-aside status means the primary benefits are directed towards larger, established firms.

Oversight & Accountability

Oversight for this contract would typically be managed by contracting officers and program managers within the Department of Justice. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance metrics and internal oversight processes are not publicly disclosed. The Inspector General's office for the DOJ may conduct audits or investigations related to contract performance and spending.

Related Government Programs

IT Security Services
Computer Systems Design
Federal IT Contracts
Department of Justice IT Spending
Northrop Grumman Federal Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Limited number of bidders may reduce competitive pressure on pricing.
Need for strong government oversight to manage T&M contract effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $30.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IT SECURITY SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $30.8 million.

What is the period of performance?

Start: 2008-03-01. End: 2012-01-31.

What is the track record of Northrop Grumman Systems Corporation with federal IT security contracts?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various federal agencies, including significant work in IT services and cybersecurity. They have a long history of managing large, complex contracts for the Department of Defense, intelligence agencies, and civilian departments. Their portfolio often includes systems integration, network security, software development, and IT support services. While specific performance details for individual contracts are often proprietary or not publicly detailed, their consistent awards suggest a generally satisfactory performance record in meeting government requirements. However, like any large contractor, they may have faced scrutiny or performance issues on specific projects, which would typically be managed through contract modifications, performance improvement plans, or termination clauses if severe.

How does the $30.7 million value compare to similar IT security support contracts?

The $30.7 million value for this 3-year IT security support contract awarded to Northrop Grumman by the Department of Justice is within a moderate range for federal IT services. Large federal agencies often award contracts in the tens or hundreds of millions for comprehensive IT security solutions over similar or longer durations. For instance, contracts for enterprise-wide cybersecurity suites, managed security services, or large-scale system modernization can easily exceed this amount. Conversely, smaller, more specialized support tasks or contracts for less critical systems might be valued in the single-digit millions. Without specific details on the scope of services (e.g., number of users supported, specific security functions provided, level of system complexity), a precise comparison is difficult, but it appears to be a substantial, yet not exceptionally large, investment for the DOJ.

What are the primary risks associated with a Time and Materials (T&M) contract for IT security?

The primary risk with a Time and Materials (T&M) contract for IT security is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This structure provides flexibility, especially when the scope of work is not well-defined initially. However, it places a significant burden on the government to closely monitor labor hours, material usage, and task completion to prevent inefficiencies or inflated costs. For IT security, where requirements can evolve rapidly, T&M can be beneficial, but it necessitates robust government oversight, clear task definitions, and effective project management to ensure the government receives good value and avoids exceeding the estimated ceiling price.

How effective is full and open competition in ensuring value for money in IT security contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in federal IT security contracts. By allowing all responsible sources to submit bids, the government maximizes the pool of potential offerors, fostering a competitive environment. This competition typically drives down prices as contractors strive to offer the most attractive bid to win the contract. Furthermore, it encourages innovation and allows the government to select the solution that best balances cost, technical capability, and risk. While T&M contracts inherently carry cost risks, a competitive award process for such a contract increases the likelihood that the initial rates and estimated costs are reasonable and that the chosen contractor is capable of delivering the required security services efficiently.

What is the historical spending trend for IT security support services at the Department of Justice?

Historical spending trends for IT security support services at the Department of Justice (DOJ) generally show a consistent and increasing demand, mirroring broader government-wide priorities. The DOJ, managing vast amounts of sensitive data and critical infrastructure, requires robust cybersecurity measures. Over the past decade, federal spending on IT security has escalated due to evolving cyber threats. While specific figures for DOJ's IT security support services fluctuate based on agency initiatives, contract vehicles, and threat landscapes, the overall trajectory indicates sustained or growing investment. This $30.7 million contract awarded in 2008 for a 3-year period reflects a portion of that ongoing investment during that timeframe. Analyzing broader DOJ IT spending reports or GAO assessments on federal cybersecurity could provide more context on the scale and evolution of these expenditures.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 8110 GATEHOUSE RD, FALLS CHURCH, VA, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,756,601

Exercised Options: $30,756,601

Current Obligation: $30,756,601

Parent Contract

Parent Award PIID: DJJ05C1116

IDV Type: IDC

Timeline