DoD's $235M CMF Contract with Northrop Grumman: Software Publishers Sector Analysis
Contract Overview
Contract Amount: $23,569,220 ($23.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2014-08-08
End Date: 2018-01-26
Contract Duration: 1,267 days
Daily Burn Rate: $18.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 7
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: CMF
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $23.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: CMF Key points: 1. Significant contract value ($235.7M) awarded to a major defense contractor. 2. Full and open competition after exclusion of sources suggests a specific, potentially limited, procurement approach. 3. Contract duration of 1267 days indicates a long-term software development or sustainment effort. 4. The 'Software Publishers' NAICS code points to a focus on digital solutions within the defense sector.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Benchmarking CPFF contracts in the software sector is challenging due to varying scope and complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that while competition was sought, certain potential bidders were excluded. This method can impact price discovery by narrowing the competitive pool.
Taxpayer Impact: The CPFF pricing structure and potentially limited competition raise concerns about maximizing taxpayer value. Effective oversight is crucial to ensure costs remain reasonable.
Public Impact
Taxpayers may be exposed to higher costs due to the CPFF contract type. The exclusion of sources in the competition could limit access to innovative solutions from a wider range of companies. Long-term contracts can provide stability but also risk locking the government into potentially outdated technologies if not managed proactively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) pricing can incentivize contractor spending.
- Limited competition may result in higher prices.
- Long contract duration increases risk of scope creep or obsolescence.
- No small business participation noted.
Positive Signals
- Awarded to a known, experienced defense contractor.
- Definitive contract provides a clear framework for the engagement.
Sector Analysis
This contract falls within the IT sector, specifically software publishing, a critical area for modern defense operations. Spending benchmarks for similar large-scale software development contracts vary widely based on complexity and technology.
Small Business Impact
The data indicates no small business participation in this contract. This suggests the prime contractor, Northrop Grumman, is handling the entire scope, potentially missing opportunities for small business innovation and subcontracting.
Oversight & Accountability
The CPFF structure necessitates robust government oversight to monitor costs, performance, and adherence to the contract's scope. Regular audits and performance reviews are essential to ensure accountability and prevent cost overruns.
Related Government Programs
- Software Publishers
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Limited competition may have inflated the price.
- Lack of small business participation.
- Risk of software obsolescence over the contract's long duration.
- Insufficient detail on specific software capabilities procured.
Tags
software-publishers, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. CMF
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 Air Force).
What is the total obligated amount?
The obligated amount is $23.6 million.
What is the period of performance?
Start: 2014-08-08. End: 2018-01-26.
What specific software capabilities were procured under this contract, and how do they align with current Air Force modernization priorities?
The contract details do not specify the exact software capabilities. Understanding the specific deliverables is crucial for assessing their alignment with Air Force modernization goals. Without this information, it's difficult to determine if the $235.7 million investment is strategically positioned to enhance operational effectiveness or address emerging threats in the evolving defense landscape.
What were the primary reasons for excluding certain sources during the competition phase, and did this exclusion impact the final contract price?
The rationale behind excluding specific sources is not provided. Typically, exclusions might stem from security concerns, inability to meet technical requirements, or past performance issues. However, without transparency into these decisions, it's impossible to ascertain if this limitation on competition led to a less competitive pricing environment and potentially a higher cost to the government.
How effectively has the CPFF contract structure been managed to control costs and ensure the delivery of value for the $235.7 million expenditure?
Assessing the effectiveness of CPFF management requires detailed financial and performance data beyond this summary. While the contract is complete, a post-award review would be necessary to determine if cost targets were met, if the fixed fee was appropriate, and if the delivered software provided the intended value. The absence of this review makes a definitive judgment on value delivery challenging.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: COST PLUS FIXED FEE (U)
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,569,220
Exercised Options: $23,569,220
Current Obligation: $23,569,220
Subaward Activity
Number of Subawards: 347
Total Subaward Amount: $39,976,507
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-08-08
Current End Date: 2018-01-26
Potential End Date: 2018-01-26 00:00:00
Last Modified: 2018-01-30
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