Northrop Grumman's $18.5M IT contract for custom programming services awarded by GSA

Contract Overview

Contract Amount: $18,463,450 ($18.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: General Services Administration

Start Date: 2006-05-19

End Date: 2009-05-21

Contract Duration: 1,098 days

Daily Burn Rate: $16.8K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: ARMS CONTROL INFORMATION AND NOTIFICATION (ACIN)

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $18.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ARMS CONTROL INFORMATION AND NOTIFICATION (ACIN) Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost efficiencies. 2. The contract duration of nearly three years suggests a significant, ongoing need for these services. 3. Services fall under custom computer programming, a critical area for federal IT infrastructure. 4. The contract was awarded by the General Services Administration, a common vehicle for IT procurement. 5. The use of Time and Materials pricing may lead to cost overruns if not closely managed.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to its non-competitive nature and the specialized 'Custom Computer Programming Services' NAICS code. Without comparable bids, it's difficult to definitively assess if the pricing represents good value for money. The Time and Materials (T&M) pricing structure, while flexible, can sometimes lead to higher costs compared to fixed-price contracts if not meticulously monitored for scope creep and efficiency. Further analysis would require access to internal GSA cost estimates or data on similar T&M contracts for custom programming.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order. This means that only one vendor, Northrop Grumman Systems Corporation, was solicited and awarded the contract. The lack of competition limits the government's ability to explore alternative solutions or leverage market forces to achieve the best possible pricing. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally result in less price discovery and potentially higher costs for the government.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective solution available. Without bids from other qualified vendors, there's a risk that the price paid is higher than it would have been in a competitive environment.

Public Impact

Federal agencies requiring custom computer programming services benefit from the specialized solutions provided by this contract. The contract supports the development and maintenance of critical federal IT systems. The geographic impact is likely nationwide, as GSA serves various federal agencies. The contract supports a workforce skilled in custom software development and IT services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs for taxpayers.
Time and Materials pricing structure carries inherent risks of cost overruns if not managed stringently.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
Contract duration and value suggest a significant reliance on a single vendor for critical IT functions.

Positive Signals

Award to a large, established contractor like Northrop Grumman suggests a level of trust and perceived capability.
GSA's involvement indicates adherence to established federal procurement processes, even for sole-source awards.
The contract addresses a specific need for custom programming, implying a targeted and necessary service.

Sector Analysis

The Information Technology (IT) sector, particularly custom computer programming services, is a significant area of federal spending. This contract falls under NAICS code 541511, which encompasses establishments primarily engaged in writing, modifying, testing, and supporting software to meet the needs of a particular customer. Federal spending in this sector is driven by the continuous need to modernize legacy systems, develop new digital services, and enhance cybersecurity. Comparable spending benchmarks would typically involve analyzing the average cost of similar custom programming contracts, factoring in complexity, duration, and contractor experience, though direct comparisons are difficult for sole-source awards.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Northrop Grumman Systems Corporation, is a large business. This suggests that opportunities for small businesses would primarily arise through subcontracting, if Northrop Grumman chooses to engage them. The lack of a direct set-aside means that this large contract does not directly contribute to the government's small business contracting goals at the prime level. The impact on the small business ecosystem is therefore indirect and dependent on the subcontracting practices of the prime.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Federal Acquisition Service. GSA is responsible for ensuring that contract terms are met, performance is satisfactory, and payments are justified. As this is a delivery order under a larger contract vehicle, oversight mechanisms would include regular performance reviews, invoice auditing, and adherence to the Time and Materials pricing structure. Transparency is limited due to the non-competitive nature, but GSA's internal controls and potentially the agency's Inspector General would provide accountability.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Custom Computer Programming Services
Time and Materials Contracts
Federal Civilian IT Modernization Programs

Risk Flags

Non-competitive award
Time and Materials pricing
Potential for cost overruns
Limited price discovery

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $18.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ARMS CONTROL INFORMATION AND NOTIFICATION (ACIN)

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $18.5 million.

What is the period of performance?

Start: 2006-05-19. End: 2009-05-21.

What is Northrop Grumman's track record with the federal government, particularly on similar IT contracts?

Northrop Grumman Systems Corporation is a major defense contractor with a long history of performing complex IT and systems integration work for the federal government. They have a substantial portfolio of contracts across various agencies, including the Department of Defense and civilian agencies. Their track record typically involves large-scale projects, often in areas like aerospace, defense systems, and IT modernization. While specific performance data for individual contracts is not publicly detailed, their continued success in winning significant federal awards suggests a generally positive performance history. However, like any large contractor, they may have faced scrutiny or performance issues on specific contracts, which would be detailed in contract performance reports (e.g., CPARS) if publicly accessible.

How does the $18.5 million value of this contract compare to similar custom programming services procured by the GSA?

Direct comparison of this $18.5 million contract's value to similar custom programming services procured by GSA is difficult due to its sole-source nature and the specific 'Custom Computer Programming Services' (NAICS 541511) classification. GSA procures a vast range of IT services, and contract values can vary significantly based on scope, duration, and complexity. Sole-source awards, by definition, lack competitive bids, making it impossible to benchmark against market-driven pricing. To assess value, one would ideally compare it to competitively awarded contracts for similar custom programming work, considering factors like the number of labor hours, skill levels required, and project timelines. Without such comparative data, the $18.5 million figure serves primarily as an indicator of the scale of the requirement rather than a validated benchmark of value.

What are the primary risks associated with a non-competitive Time and Materials contract of this magnitude?

The primary risks associated with a non-competitive Time and Materials (T&M) contract of this magnitude are twofold. Firstly, the non-competitive nature means the government did not benefit from price competition, potentially leading to a higher overall cost than if multiple vendors had bid. There's less incentive for the contractor to be highly efficient when price is not a primary competitive factor. Secondly, the T&M pricing structure, while offering flexibility, inherently carries the risk of cost overruns. Without strict oversight, controls, and clear definition of work, the contractor could incur significant labor hours and material costs, driving the total price up beyond initial expectations. This necessitates robust contract management and surveillance by the procuring agency to ensure the hours billed are reasonable and allocable to the contract's objectives.

How effective are GSA's oversight mechanisms for non-competitive delivery orders, especially those using Time and Materials pricing?

GSA employs various oversight mechanisms for its contracts, including non-competitive delivery orders. These typically involve contract officers' representatives (CORs) who monitor contractor performance, ensure adherence to contract terms, and review invoices. For Time and Materials contracts, CORs are crucial in verifying that the hours billed are reasonable, necessary, and directly related to the contract's scope. GSA also has internal audit functions and relies on reporting requirements from contractors. However, the effectiveness of these mechanisms can vary depending on the COR's resources, expertise, and the complexity of the work. For large, sole-source T&M contracts, the potential for cost escalation remains a significant challenge, underscoring the need for diligent and proactive oversight to mitigate risks.

What is the historical spending pattern for custom computer programming services under GSA, and how does this contract fit?

Federal spending on custom computer programming services, particularly through GSA, has historically been substantial and generally increasing, driven by the ongoing need for digital transformation and IT modernization across government agencies. GSA's IT Schedule contracts are a primary vehicle for procuring such services, offering a streamlined process. This $18.5 million contract, awarded non-competitively, represents a specific instance within this broader spending trend. While GSA facilitates numerous competitively awarded contracts in this space, sole-source awards like this one, though less common for large sums, occur when specific justifications are met. This contract fits into the pattern of agencies seeking specialized IT development, but its non-competitive nature distinguishes it from the majority of GSA's IT procurements which aim for market-driven pricing.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: R3060376

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 12900 FEDERAL SYSTEMS PARK DR, FAIRFAX, VA, 22033

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,582,928

Exercised Options: $18,463,450

Current Obligation: $18,463,450

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS07T00BGD0066

IDV Type: GWAC

Timeline