HHS awarded $14.7M for custom computer programming, with Northrop Grumman Systems Corporation as the primary contractor

Contract Overview

Contract Amount: $14,766,045 ($14.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2002-09-21

End Date: 2003-11-30

Contract Duration: 435 days

Daily Burn Rate: $33.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MULTIPLE CONTRACT TYPES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $14.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MULTIPLE CONTRACT TYPES Key points: 1. The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, which can lead to cost overruns if not managed carefully. 2. Awarded under full and open competition, suggesting a competitive bidding process that should theoretically yield fair pricing. 3. The contract duration of 435 days is relatively short, indicating a focused scope of work. 4. The North American Industry Classification System (NAICS) code 541511 points to a focus on custom software development. 5. The contract was awarded as a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework. 6. The base contract value is $33,945, with significant subsequent task orders contributing to the total award amount. 7. The contractor, Northrop Grumman Systems Corporation, is a large, established entity in the aerospace and defense sector, with significant IT capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed information on the scope of services and deliverables. The CPFF structure, while common for R&D or uncertain scope projects, carries inherent risks of cost escalation. Comparing it to similar custom programming contracts would require analyzing the complexity, duration, and specific technical requirements. The initial base award of $33,945 is very small, suggesting this was a foundational task order or a small initial component of a larger effort.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This generally promotes a competitive environment, which can lead to better pricing and innovation. The number of bidders is not specified, but the 'full and open' designation suggests a robust process was intended.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government sought the best value through an open process.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from custom computer programming services, likely to support its public health mission. The services delivered are expected to enhance data management, analysis, or operational capabilities within the CDC. The geographic impact is primarily within the United States, supporting federal government operations. Workforce implications may include the need for specialized IT professionals to develop and maintain the custom software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize profit, requiring diligent oversight.
Lack of specific details on deliverables makes it difficult to assess if the final product met all requirements and expectations.
The significant difference between the base award and the total award suggests substantial scope growth or follow-on work, which warrants scrutiny of the original bidding and subsequent modifications.

Positive Signals

Awarded under full and open competition, indicating a fair and transparent procurement process.
Northrop Grumman Systems Corporation is a reputable contractor with a track record in complex IT projects.
The contract was awarded to a single entity, suggesting a clear line of responsibility for the services provided.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The IT services market is vast and highly competitive, with significant government spending allocated to software development, system integration, and IT support. Comparable spending benchmarks would depend on the specific nature of the custom programming, such as the complexity of the software, the technologies used, and the level of expertise required. Government spending in this area is driven by the need for specialized solutions that off-the-shelf software cannot provide.

Small Business Impact

There is no indication that this contract involved a small business set-aside. As the award went to Northrop Grumman Systems Corporation, a large prime contractor, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation would depend on the prime contractor's subcontracting plan and adherence to federal small business goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Centers for Disease Control and Prevention (CDC). Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS-NG, which provide basic award information. The specific Inspector General jurisdiction would be that of the Department of Health and Human Services (HHS).

Related Government Programs

Custom Software Development Services
IT Services for Public Health Agencies
Northrop Grumman Contracts with HHS
Centers for Disease Control and Prevention IT Procurement

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type may lead to cost overruns.
Lack of detailed scope information hinders value assessment.
Potential for scope creep given the difference between base and total award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $14.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MULTIPLE CONTRACT TYPES

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $14.8 million.

What is the period of performance?

Start: 2002-09-21. End: 2003-11-30.

What specific custom computer programming services were delivered under this contract?

The provided data indicates the NAICS code 541511 for Custom Computer Programming Services, suggesting the development of tailored software solutions. However, the specific nature of these services, such as the type of software (e.g., data analysis tools, public health surveillance systems, internal operational software), the programming languages used, and the project's objectives, are not detailed in the summary data. To understand the exact services, one would need to review the contract's Statement of Work (SOW) or task order descriptions. These services likely involved designing, developing, testing, and potentially deploying software applications to meet unique CDC requirements that could not be fulfilled by commercial off-the-shelf products.

How does the total award amount of $14.7 million compare to similar custom programming contracts at the CDC or HHS?

Comparing the $14.7 million total award requires context regarding the contract's duration and scope. If this represents a single, multi-year project, it might be within the typical range for large-scale custom software development for a federal agency like the CDC. However, if it represents a series of smaller, short-term task orders, it could be considered substantial. Benchmarking would involve analyzing the average cost per programming hour, the complexity of the systems developed, and the specific functional areas supported. Without access to detailed project scopes and deliverables, a precise comparison is difficult. Generally, custom development for complex systems can range from hundreds of thousands to tens of millions of dollars, depending on the scale and criticality.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used here?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor has less incentive to control costs compared to fixed-price contracts. While the 'fixed fee' provides the contractor a guaranteed profit margin, the 'cost plus' aspect means the government reimburses the contractor for allowable costs incurred. If not managed diligently, this structure can lead to cost overruns as the contractor may not be as motivated to find the most economical solutions. The government bears the risk of cost increases. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives value for its expenditure.

What is Northrop Grumman Systems Corporation's track record with custom computer programming services for the federal government?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in information technology, including custom software development, systems integration, and cybersecurity. They have a long history of performing complex IT services for various federal agencies, including the Department of Defense, NASA, and civilian agencies like HHS. Their track record generally includes large, mission-critical programs. While specific performance details for this particular CDC contract are not provided, their status as a large, established prime contractor suggests they possess the resources and expertise to handle significant IT development efforts. However, like any large contractor, they may have faced past performance issues on specific contracts, which would typically be documented in past performance evaluations during procurement.

How has federal spending on custom computer programming services (NAICS 541511) trended over the past decade?

Federal spending on custom computer programming services (NAICS 541511) has generally shown a consistent upward trend over the past decade, reflecting the increasing reliance of government agencies on specialized IT solutions. Agencies continually seek to modernize legacy systems, enhance data analytics capabilities, improve cybersecurity, and develop new digital services for citizens and internal operations. This demand drives significant investment in custom software development. While specific figures fluctuate year-to-year based on agency budgets and priorities, the overall trajectory indicates sustained and often growing expenditure in this category as agencies adapt to evolving technological landscapes and mission requirements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $55,529,120

Exercised Options: $55,529,120

Current Obligation: $14,766,045

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200200555I

IDV Type: IDC

Timeline