DoD's $25.7M Engineering Services Contract with Northrop Grumman Raises Questions on Value and Competition
Contract Overview
Contract Amount: $25,739,773 ($25.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2009-09-21
End Date: 2011-09-30
Contract Duration: 739 days
Daily Burn Rate: $34.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $25.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING SERVICES Key points: 1. Contract awarded for Engineering Services, totaling $25.7 million. 2. Northrop Grumman Systems Corporation is the sole awardee. 3. Awarded under 'Full and Open Competition After Exclusion of Sources', suggesting limited initial competition. 4. The sector is primarily IT/Defense support, with potential for broader application. 5. The contract duration was 739 days.
Value Assessment
Rating: questionable
The contract value of $25.7 million for engineering services over approximately two years appears moderate. However, without specific deliverables or performance metrics, assessing its value against industry benchmarks is difficult. The 'Cost Plus Fixed Fee' structure can sometimes lead to cost overruns if not tightly managed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This specific procurement method indicates that while competition was sought, it was restricted, potentially limiting the pool of eligible bidders and impacting price discovery. The rationale for excluding sources is not provided.
Taxpayer Impact: The impact on taxpayers is uncertain due to the limited competition and cost-plus contract type. Potential inefficiencies or higher-than-market prices could increase the cost to taxpayers.
Public Impact
Taxpayers may be paying a premium due to restricted competition. Lack of transparency in the exclusion of sources hinders public trust. The effectiveness of engineering services provided needs to be evaluated against the contract's objectives.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition due to exclusion of sources.
- Cost-plus contract type can incentivize higher costs.
- Lack of detailed performance metrics makes value assessment difficult.
Positive Signals
- Contract awarded to a known defense contractor.
- Specific NAICS code (541330) indicates a defined service area.
Sector Analysis
This contract falls within the Engineering Services sector, often supporting complex government programs, particularly in defense. Benchmarks for such services vary widely based on specialization, but a $25.7M contract over two years suggests a significant, though not massive, undertaking.
Small Business Impact
The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses within the provided data, which could represent a missed opportunity for economic inclusion.
Oversight & Accountability
Oversight is crucial for cost-plus contracts, especially those with limited competition. The Department of the Air Force is responsible for ensuring Northrop Grumman delivers effective engineering services within the agreed-upon fee structure and manages potential cost escalations.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Limited competition.
- Cost-plus contract type.
- Lack of justification for source exclusion.
- Unclear performance metrics.
- No small business participation noted.
Tags
engineering-services, department-of-defense, il, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING 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 Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $25.7 million.
What is the period of performance?
Start: 2009-09-21. End: 2011-09-30.
What was the specific justification for excluding sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price?
The provided data does not detail the justification for excluding sources. This lack of transparency is a concern, as it prevents a thorough assessment of whether the exclusion was warranted or if it artificially limited competition, potentially leading to a higher price for the government and taxpayers. Understanding the rationale is key to evaluating the fairness and efficiency of the procurement process.
How was the 'fixed fee' determined in this Cost Plus Fixed Fee (CPFF) contract, and what mechanisms were in place to control costs and ensure efficiency?
The data does not specify how the fixed fee was determined or the cost control mechanisms employed. For CPFF contracts, the fee is typically negotiated based on anticipated costs and complexity. Effective oversight would involve rigorous monitoring of incurred costs, performance against milestones, and justification for any deviations to ensure the contractor remains incentivized to manage expenses efficiently and deliver value.
What were the key performance indicators (KPIs) and deliverables for these engineering services, and how was the contractor's performance measured against them?
Specific performance indicators and deliverables are not detailed in the provided contract abstract. Assessing the effectiveness of the engineering services requires understanding the contract's objectives and the metrics used to evaluate Northrop Grumman's performance. Without this information, it's challenging to determine if the $25.7 million investment yielded the intended technical outcomes or strategic advantages for the Air Force.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,739,773
Exercised Options: $25,739,773
Current Obligation: $25,739,773
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2009-09-21
Current End Date: 2011-09-30
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2011-10-13
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