GSA's $14.6M Engineering Services Contract to Northrop Grumman Shows Moderate Value and Limited Competition
Contract Overview
Contract Amount: $14,571,970 ($14.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: General Services Administration
Start Date: 2005-07-01
End Date: 2006-07-31
Contract Duration: 395 days
Daily Burn Rate: $36.9K/day
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: AFCESA IT ENGINEERING SERVICES AND KNOWLEDGE MANAGEMENT
Place of Performance
Location: PANAMA CITY, BAY County, FLORIDA, 32403
State: Florida Government Spending
Plain-Language Summary
General Services Administration obligated $14.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AFCESA IT ENGINEERING SERVICES AND KNOWLEDGE MANAGEMENT Key points: 1. The contract's value of $14.6 million over its term suggests a moderate scale for engineering services. 2. Northrop Grumman's selection indicates a reliance on established large contractors for complex IT engineering needs. 3. The 'Time and Materials' contract type introduces potential cost escalation risks if not closely managed. 4. The relatively short duration of approximately one year limits long-term performance assessment. 5. The contract's focus on IT engineering services positions it within a critical and evolving sector. 6. The limited competition raises questions about achieving optimal pricing and innovation.
Value Assessment
Rating: fair
The total award amount of $14.6 million for engineering services appears moderate. Benchmarking against similar IT engineering contracts is challenging without more specific service details. However, the 'Time and Materials' pricing structure, while flexible, can lead to higher costs if not managed diligently, potentially impacting overall value for money. The contract's duration of just over a year also limits the ability to assess long-term cost-effectiveness or performance trends.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded to Northrop Grumman Systems Corporation with two bids received. This indicates a limited competitive environment, which may not have driven the most aggressive pricing or fostered the widest range of innovative solutions. While two bidders suggest some level of competition, it falls short of a full and open competition, potentially allowing the incumbent or larger players to maintain a stronger position.
Taxpayer Impact: Limited competition can result in taxpayers paying a premium compared to what might be achieved in a more robustly contested procurement. It also reduces the incentive for contractors to offer their most competitive pricing upfront.
Public Impact
The primary beneficiaries are likely the agencies requiring IT engineering and knowledge management support, ensuring operational continuity. Services delivered include engineering expertise and knowledge management crucial for maintaining complex IT systems. The contract's geographic impact is focused on Florida (st: FL), suggesting a regional concentration of services. Workforce implications include the employment of skilled engineers and IT professionals by Northrop Grumman.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to Time and Materials pricing structure.
- Limited competition may result in suboptimal pricing and reduced innovation.
- Short contract duration restricts comprehensive performance evaluation and long-term strategic alignment.
Positive Signals
- Award to a large, established contractor like Northrop Grumman suggests a degree of reliability and capability.
- Focus on IT engineering addresses critical government needs in a vital sector.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader IT and professional services market. The IT engineering sub-sector is characterized by rapid technological advancements and a constant demand for specialized expertise. Comparable spending in this area can vary widely based on project scope and duration, but contracts in the tens of millions are common for significant engineering support.
Small Business Impact
The contract details indicate that small business participation was not a primary focus, as the award was made to a large corporation and the 'ss' (small business set-aside) flag is false. There is no explicit information regarding subcontracting plans for small businesses. This suggests that opportunities for small businesses within this specific contract may be limited unless Northrop Grumman voluntarily includes them in their supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the General Services Administration (GSA), specifically the Federal Acquisition Service. Accountability measures would be embedded in the contract's performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- IT Professional Services
- Engineering and Technical Services
- Knowledge Management Support
- IT Infrastructure Support
- Systems Engineering
Risk Flags
- Potential for cost overruns due to T&M pricing.
- Limited competition may lead to higher prices.
- Short contract duration limits long-term performance assessment.
Tags
engineering-services, it-services, northrop-grumman, general-services-administration, gsa, federal-acquisition-service, time-and-materials, limited-competition, florida, it-engineering, knowledge-management
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $14.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AFCESA IT ENGINEERING SERVICES AND KNOWLEDGE MANAGEMENT
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 $14.6 million.
What is the period of performance?
Start: 2005-07-01. End: 2006-07-31.
What is Northrop Grumman's track record with similar IT engineering contracts awarded by GSA or other federal agencies?
Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various federal agencies, including significant IT and engineering services contracts. Analyzing their past performance on similar Time and Materials (T&M) IT engineering contracts would be crucial. Key metrics to examine include their history of cost performance against ceiling amounts, adherence to schedules, quality of deliverables, and any documented performance issues or commendations. Their overall federal contracting portfolio suggests a capacity for large-scale projects, but specific performance on T&M IT engineering contracts of this scale would require a deeper dive into contract databases and performance reports to assess their reliability and efficiency in this particular service area.
How does the awarded amount of approximately $14.6 million compare to the average cost of similar IT engineering services procured by the federal government?
The $14.6 million award for IT engineering and knowledge management services over a roughly one-year period represents a moderate investment. To benchmark this effectively, one would need to compare it against contracts with similar scope, complexity, and duration, particularly those procured through the General Services Administration (GSA) or other agencies with significant IT footprints. Factors like the specific technical requirements, the level of expertise needed, and the geographic location of service delivery influence pricing. Without detailed service descriptions, a precise comparison is difficult. However, federal spending on IT engineering services can range from millions to hundreds of millions of dollars, making this contract appear mid-tier. The 'Time and Materials' pricing model also complicates direct cost comparisons, as actual expenditures depend heavily on hours worked and resource utilization.
What are the primary risks associated with the 'Time and Materials' (T&M) contract type for this IT engineering service?
The primary risk with a Time and Materials (T&M) contract type, such as the one awarded to Northrop Grumman, is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This structure provides flexibility but offers less cost certainty for the government. If project scope creeps, if labor hours are not meticulously tracked and managed, or if resource efficiency is low, the total cost can exceed initial estimates or budgets. Effective oversight, robust reporting requirements, and clear definition of labor categories and rates are essential to mitigate these risks and ensure the government receives good value.
Given only two bids were received, what does this limited competition imply about the market for these specific IT engineering services?
Receiving only two bids suggests a potentially limited or concentrated market for the specific IT engineering and knowledge management services required under this contract. This could be due to several factors: the highly specialized nature of the required skills, the large contract value potentially excluding smaller firms, or the specific requirements of the solicitation favoring incumbent or large, established contractors like Northrop Grumman. Limited competition can reduce price pressure, potentially leading to higher costs for the government than if more bidders had participated. It may also limit the range of innovative solutions proposed, as contractors might be less incentivized to differentiate themselves significantly when the pool of competitors is small.
How does the contract's duration of approximately one year impact the assessment of its overall effectiveness and value?
The contract's duration of approximately one year (July 2005 - July 2006) presents a challenge for a comprehensive assessment of its effectiveness and long-term value. Short-term contracts are often suitable for specific, well-defined tasks or bridging requirements, but they limit the ability to evaluate sustained performance, the development of deep institutional knowledge, or the impact of long-term strategic initiatives. While performance can be measured over this period, it may not fully capture the contractor's ability to adapt to evolving needs or contribute to enduring improvements. Furthermore, the administrative overhead associated with repeatedly competing and awarding short-term contracts can be inefficient.
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
Contractor Details
Parent Company: Titan II Inc. (UEI: 016435559)
Address: 12011 SUNSET HILLS ROAD, RESTON, VA, 11
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $14,571,970
Exercised Options: $14,571,970
Current Obligation: $14,571,970
Parent Contract
Parent Award PIID: GS23F0058K
IDV Type: FSS
Timeline
Start Date: 2005-07-01
Current End Date: 2006-07-31
Potential End Date: 2006-07-31 00:00:00
Last Modified: 2010-04-09
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