DoD's $87.5M Northrop Grumman Contract for Engineering Services: Fair Value or Overpriced?
Contract Overview
Contract Amount: $87,520,144 ($87.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2007-08-28
End Date: 2010-02-28
Contract Duration: 915 days
Daily Burn Rate: $95.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 8
Pricing Type: FIXED PRICE AWARD FEE
Sector: Defense
Official Description: JITC MISSION CONTRACT
Place of Performance
Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85670
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $87.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JITC MISSION CONTRACT Key points: 1. Contract awarded to Northrop Grumman for $87.5M. 2. Full and open competition was utilized. 3. Contract duration was 915 days. 4. The contract type was Fixed Price Award Fee. 5. The award was made in Arizona.
Value Assessment
Rating: fair
The contract's total value of $87.5M over 915 days suggests a daily rate of approximately $95,650. Without specific deliverables or benchmarks for similar engineering services contracts, it's difficult to definitively assess value. However, the award amount is substantial.
Cost Per Unit: $95,650 (daily average)
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically promotes competitive pricing. The use of a Fixed Price Award Fee structure incentivizes performance while allowing for adjustments based on achieved outcomes.
Taxpayer Impact: Taxpayer funds were utilized for engineering services under a competitive process, aiming for value. The final cost is subject to award fee determination.
Public Impact
Defense Information Systems Agency (DISA) received engineering services. Northrop Grumman, a major defense contractor, secured the award. The contract supported the JITC mission. Services were rendered over a period of approximately 2.5 years.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed performance metrics for award fee.
- Potential for cost overruns if award fee is maximized without commensurate value.
- Limited transparency on specific engineering tasks performed.
Positive Signals
- Competitive bidding process likely ensured a reasonable baseline price.
- Award fee structure can incentivize contractor performance.
- Contract duration aligns with typical project lifecycles.
Sector Analysis
Engineering services (NAICS 541330) are crucial for defense projects, involving complex design, analysis, and testing. Spending in this sector can vary widely based on project scope and technological requirements. This contract falls within a significant but common expenditure range for specialized defense engineering.
Small Business Impact
This contract was awarded to a large corporation, Northrop Grumman Systems Corporation. There is no indication of small business participation or subcontracting in the provided data.
Oversight & Accountability
The contract was awarded by the Defense Information Systems Agency (DISA), a component of the Department of Defense. Oversight would typically involve program managers monitoring performance and award fee criteria.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Award fee structure lacks transparency.
- Potential for cost creep if award fee criteria are not rigorously managed.
- Limited information on specific deliverables and performance outcomes.
- No indication of small business utilization.
Tags
engineering-services, department-of-defense, az, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $87.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JITC MISSION CONTRACT
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 (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $87.5 million.
What is the period of performance?
Start: 2007-08-28. End: 2010-02-28.
What specific engineering services were provided under this contract, and how did they contribute to the JITC mission?
The provided data lacks specifics on the exact engineering services rendered. However, the JITC (Joint Interoperability Test Command) mission focuses on ensuring interoperability of systems and capabilities for the DoD. Therefore, these services likely involved technical analysis, testing, integration support, or development related to communication and information systems to meet interoperability standards.
How was the award fee determined, and what were the criteria for maximizing it?
The data indicates a 'Fixed Price Award Fee' contract type, but the specific criteria and methodology for determining the award fee are not detailed. Typically, award fees are based on contractor performance against predefined metrics related to technical achievement, schedule adherence, and cost control. Without these criteria, it's impossible to assess if the fee structure effectively incentivized optimal performance or potentially led to inflated costs.
What was the competitive landscape for this specific engineering service requirement, and did full and open competition yield the best possible pricing?
While the contract was awarded under 'full and open competition,' the data does not reveal the number of bids received or the pricing of competing proposals. This method generally promotes competitive pricing. However, the effectiveness in achieving the 'best possible' price depends on the specific market conditions, the uniqueness of the required services, and the evaluation criteria used beyond just price.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 8
Pricing Type: FIXED PRICE AWARD FEE (M)
Evaluated Preference: NONE
Contractor Details
Address: 12011 SUNSET HILLS ROAD, RESTON, VA, 20190
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $341,807,658
Exercised Options: $341,807,658
Current Obligation: $87,520,144
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-08-28
Current End Date: 2010-02-28
Potential End Date: 2010-02-28 00:00:00
Last Modified: 2021-06-24
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