DoD's $26.8M contract for Decision Support Services awarded to Northrop Grumman raises questions on competition and value
Contract Overview
Contract Amount: $26,865,422 ($26.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2022-01-12
End Date: 2027-01-11
Contract Duration: 1,825 days
Daily Burn Rate: $14.7K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: DECISION SUPPORT SERVICES (DSS) PURSUANT TO 10 USC 2371B(F)
Place of Performance
Location: OFFUTT AFB, SARPY County, NEBRASKA, 68113
State: Nebraska Government Spending
Plain-Language Summary
Department of Defense obligated $26.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DECISION SUPPORT SERVICES (DSS) PURSUANT TO 10 USC 2371B(F) Key points: 1. Contract awarded via other than full and open competition, limiting potential for competitive pricing. 2. Pricing structure is Time and Materials, which can lead to cost overruns if not managed closely. 3. Limited public information on performance metrics and specific deliverables makes assessing value difficult. 4. The contract duration of 5 years suggests a long-term need for these services. 5. Northrop Grumman is a large, established defense contractor, indicating significant experience but also potential for higher overhead costs. 6. The specific NAICS code (541511) points to custom computer programming, a critical but often complex service area.
Value Assessment
Rating: questionable
Benchmarking the value of this $26.8 million contract is challenging due to the lack of detailed performance data and the 'other than full and open' competition. Time and Materials contracts, while flexible, can be prone to cost escalation compared to fixed-price agreements. Without comparable contract data or clear performance metrics, it's difficult to definitively assess if the pricing represents good value for the Department of Defense. The absence of a competitive bidding process further complicates a direct value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using other than full and open competition, meaning it was not widely advertised or competed among multiple potential vendors. Specific justifications for this approach are not detailed in the provided data. This limits the number of bidders and potentially the range of pricing and innovation that could have emerged from a broader competition.
Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding. It also reduces transparency in the procurement process.
Public Impact
The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive custom computer programming and decision support services. These services are crucial for enhancing operational decision-making capabilities within the military. The contract's geographic impact is likely focused on military installations where these decision support systems are deployed. Workforce implications may include the need for specialized IT personnel within the DoD to manage and utilize these systems, as well as employment for Northrop Grumman's technical staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Awarded on a sole-source basis, potentially leading to higher costs and reduced innovation.
- Time and Materials pricing structure carries inherent risks of cost overruns.
- Lack of detailed performance metrics makes it difficult to assess effectiveness and value for money.
- Limited transparency regarding the justification for sole-source award.
Positive Signals
- Awarded to a large, experienced defense contractor (Northrop Grumman) with a proven track record.
- Contract duration of 5 years suggests a stable, long-term commitment to critical decision support capabilities.
- Services fall under a specific NAICS code (541511), indicating a focus on specialized IT expertise.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The market for defense IT services is substantial, driven by the need for advanced technological solutions to support military operations. Comparable spending benchmarks in this area are difficult to establish without more specific details on the services rendered, but large defense contracts for software development and system integration often run into tens or hundreds of millions of dollars.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false) and does not explicitly mention subcontracting plans for small businesses (sb: false). This suggests that the primary awardee, Northrop Grumman, will likely perform the majority of the work. Consequently, there may be limited direct opportunities for small businesses to participate in this specific contract, potentially impacting the small business ecosystem within this procurement.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, with potential involvement from the Air Force's Inspector General. Transparency is limited by the sole-source nature of the award and the lack of publicly available performance reports. Accountability measures would be defined within the contract's terms and conditions, focusing on deliverables and milestones, but their effectiveness is hard to gauge without performance data.
Related Government Programs
- Defense IT Modernization Programs
- Air Force Command and Control Systems
- Intelligence, Surveillance, and Reconnaissance (ISR) Systems
- Custom Software Development Contracts
- Decision Support Systems
Risk Flags
- Sole-source award may limit competition and increase costs.
- Time and Materials contract type poses a risk of cost overruns.
- Lack of detailed performance metrics hinders value assessment.
- Limited transparency regarding the justification for sole-source procurement.
Tags
it, defense, department-of-defense, air-force, custom-computer-programming, decision-support-services, northrop-grumman, sole-source, time-and-materials, definitive-contract, nebraska, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DECISION SUPPORT SERVICES (DSS) PURSUANT TO 10 USC 2371B(F)
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 $26.9 million.
What is the period of performance?
Start: 2022-01-12. End: 2027-01-11.
What is Northrop Grumman's track record with similar Department of Defense contracts, particularly those involving decision support systems and custom programming?
Northrop Grumman is a major defense contractor with extensive experience in developing complex systems for the Department of Defense. They have a history of delivering large-scale IT solutions, including command and control systems, intelligence platforms, and software development services. While specific details on past decision support system contracts are not provided here, their broad portfolio suggests a capacity to handle such requirements. However, assessing the success and value of their past performance would require a deeper dive into contract performance reports, past performance evaluations, and any documented issues or successes on similar projects within the DoD.
How does the $26.8 million value of this contract compare to similar custom computer programming services procured by the DoD or other federal agencies?
Direct comparison is difficult without knowing the specific scope, complexity, and duration of the services provided under this $26.8 million contract. However, custom computer programming services for the DoD can range significantly in cost. Contracts for developing advanced decision support systems, integrating complex databases, or creating specialized software for unique military applications can easily reach tens of millions of dollars, especially over a multi-year period. The Time and Materials pricing structure also means the final cost could exceed the initial estimate. Without more granular data on deliverables and performance, benchmarking against other contracts is speculative.
What are the primary risks associated with a Time and Materials contract for decision support services, and how are they mitigated in this case?
The primary risk with Time and Materials (T&M) contracts is the potential for cost overruns, as the contractor is reimbursed for actual labor hours and material costs incurred, plus a fixed fee or profit. This can lead to unpredictable final costs if project scope creeps or if inefficiencies arise. Mitigation strategies typically involve robust government oversight, detailed tracking of hours and expenses, clear definition of work requirements, and potentially establishing cost ceilings or not-to-exceed clauses within the contract. The effectiveness of these mitigations depends heavily on the diligence of the contracting officer and the program management team overseeing the contract.
What specific decision support capabilities are being developed or enhanced under this contract, and how will they impact Air Force operations?
The provided data identifies the contract as being for 'DECISION SUPPORT SERVICES (DSS) PURSUANT TO 10 USC 2371B(F)' and falls under NAICS code 541511 (Custom Computer Programming Services). This suggests the contract aims to develop or enhance software and systems that assist military personnel in making informed decisions. These capabilities could range from advanced data analysis and visualization tools to predictive modeling and simulation environments. The impact on Air Force operations could be significant, potentially improving situational awareness, optimizing resource allocation, enhancing mission planning, and ultimately leading to more effective and efficient execution of air power.
What is the historical spending trend for decision support services within the Department of the Air Force, and how does this contract fit into that pattern?
Historical spending on decision support services within the Department of the Air Force is likely substantial and has been increasing as the military seeks to leverage data analytics and AI for operational advantage. While specific historical figures for 'decision support services' as a distinct category are not provided, the Air Force consistently invests heavily in IT modernization, intelligence systems, and command and control capabilities, all of which rely on robust decision support. This $26.8 million contract, awarded over five years, represents a significant, albeit specific, investment within this broader trend of enhancing data-driven decision-making capabilities.
What are the potential implications of awarding this contract on a sole-source basis for future procurements of similar services?
Awarding this contract on a sole-source basis could set a precedent or signal a preference for non-competitive procurements for similar services within the Air Force or DoD, potentially discouraging other vendors from anticipating future competitions. It may also indicate that the government perceives a unique capability or necessity that only Northrop Grumman can fulfill, which could be a valid justification but warrants scrutiny. From a taxpayer perspective, it reinforces the risk of paying higher prices than might be achieved through open competition. Future procurements might need stronger justifications for competition or explore alternative contracting vehicles to ensure better value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 7575 COLSHIRE DR, MCLEAN, 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: $39,843,631
Exercised Options: $39,843,631
Current Obligation: $26,865,422
Subaward Activity
Number of Subawards: 64
Total Subaward Amount: $21,484,780
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2022-01-12
Current End Date: 2027-01-11
Potential End Date: 2027-01-11 00:00:00
Last Modified: 2026-01-23
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