HHS awarded $10.16M for custom computer programming, with Northrop Grumman Systems Corporation as the primary contractor

Contract Overview

Contract Amount: $10,159,012 ($10.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2004-09-30

End Date: 2007-06-30

Contract Duration: 1,003 days

Daily Burn Rate: $10.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MULTIPLE CONTRACT TYPES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $10.2 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 carefully managed. 2. Awarded under full and open competition, suggesting a robust market for these services. 3. The contract duration of approximately 3 years (1003 days) indicates a medium-term project. 4. The specific NAICS code (541511) points to a focus on custom software development. 5. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. The absence of small business set-aside flags suggests larger prime contractors were targeted or the scope did not lend itself to smaller entities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services rendered and the complexity of the custom programming. The CPFF structure, while allowing flexibility, carries inherent risks of cost escalation compared to fixed-price contracts. Comparing it to similar custom programming contracts within HHS or other agencies would require detailed scope analysis. However, the total award amount of over $10 million for a three-year period suggests a significant undertaking.

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 typically suggests a healthy competitive environment for the services sought. The number of bidders is not specified, but the open competition model generally promotes price discovery and potentially better value for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially driving down costs and improving service quality.

Public Impact

The Centers for Disease Control and Prevention (CDC) is the primary beneficiary, likely receiving custom software solutions to support its public health missions. Services delivered include custom computer programming, essential for developing specialized applications or systems. The contract's geographic impact is centered in Georgia (GA), where the contractor is located or where services are primarily performed. Workforce implications may include employment opportunities for software developers, programmers, and related IT professionals within Northrop Grumman Systems Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can incentivize contractors to increase costs to maximize their fee, requiring robust oversight.
Lack of specific details on deliverables makes it difficult to assess performance against expectations.
The contract's age (awarded in 2004) means current market rates and technologies may have significantly evolved.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Northrop Grumman Systems Corporation is a large, established defense and aerospace contractor with significant experience in complex IT projects.
The contract was awarded as a Delivery Order, suggesting it was part of a pre-competed IDIQ vehicle, potentially streamlining acquisition.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on custom computer programming services (NAICS 541511). This sub-sector involves the design, development, and implementation of tailored software solutions. The market for such services is substantial, driven by government and commercial entities requiring specialized applications to meet unique operational needs. Comparable spending benchmarks would involve analyzing other custom software development contracts awarded by federal agencies for similar complexity and duration.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Northrop Grumman Systems Corporation, it is unlikely to have significant direct subcontracting opportunities specifically designated for small businesses unless mandated by the prime or the specific IDIQ vehicle terms. The focus on a large prime contractor suggests the project's scope may have been beyond the capacity or specialization of typical small business IT firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be crucial to ensure costs are reasonable and allocable. Transparency would depend on the reporting requirements stipulated in the contract and the agency's policies regarding contract data disclosure. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Custom Computer Programming Services
IT Services for Public Health
Northrop Grumman Contracts
HHS IT Modernization Efforts
CDC Software Development Projects

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to prevent cost overruns.
Contract awarded in 2004; technology and cost benchmarks may be outdated.
Lack of specific details on deliverables hinders performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $10.2 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 $10.2 million.

What is the period of performance?

Start: 2004-09-30. End: 2007-06-30.

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

The provided data indicates the contract was for 'Custom Computer Programming Services' under NAICS code 541511. However, it does not specify the exact nature of these services. Typically, this could range from developing new software applications, modifying existing systems, database development, or creating specialized algorithms. Without further details from the contract's statement of work (SOW), it's impossible to determine the precise technical deliverables. These services are crucial for agencies like the CDC to build bespoke tools for data analysis, disease tracking, public health reporting, or internal operational management that off-the-shelf software cannot fulfill.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar IT services?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. This structure is often used when the scope of work is not well-defined or is expected to evolve, offering flexibility. However, it carries a higher risk of cost overruns compared to Firm-Fixed-Price (FFP) contracts, as the contractor is incentivized to incur costs to earn a larger fee (though the fee itself is fixed). For IT services where requirements are clear and stable, FFP is generally preferred for better cost certainty. CPFF requires robust government oversight to manage costs effectively. Other variants like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives.

What is the typical performance risk associated with a CPFF contract for custom software development?

The primary performance risk with a CPFF contract for custom software development lies in potential cost escalation and scope creep. Since the contractor is reimbursed for costs, there's less financial incentive to control expenses tightly compared to FFP. If the government's requirements change frequently or are not clearly defined upfront, the project's cost can increase significantly beyond initial estimates. Additionally, the 'fixed fee' component, while intended to provide profit certainty, can sometimes lead to less focus on efficiency if not coupled with strong performance metrics and oversight. Ensuring clear milestones, regular progress reviews, and strict change control processes are vital to mitigate these risks.

What does the 'Delivery Order' designation imply about this contract?

The 'Delivery Order' (aw) designation signifies that this contract is likely a task order issued under a larger, pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar multiple-award framework. IDIQs allow agencies to procure services or supplies over a period, with specific quantities and delivery dates defined by individual orders. This approach streamlines the acquisition process for recurring needs. Therefore, this $10.16 million award represents one specific order placed against a potentially larger contract vehicle, which itself would have undergone a competitive bidding process.

How does Northrop Grumman Systems Corporation's track record influence the assessment of this contract?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in complex IT systems, aerospace, and defense solutions. Their established presence suggests a high level of technical capability and project management expertise. For this specific contract, their track record implies they possess the resources and knowledge to undertake significant custom programming projects for agencies like the CDC. However, past performance doesn't guarantee future success; the specific team assigned, the project's unique challenges, and the government's oversight remain critical factors. Assessing their performance on similar HHS or CDC contracts would provide more granular insights.

What are the implications of this contract being awarded in 2004 for current IT standards and costs?

A contract awarded in 2004 for custom computer programming services is quite dated in the context of the rapidly evolving IT landscape. Technology standards, programming languages, cybersecurity best practices, and development methodologies have advanced considerably since then. The $10.16 million awarded might represent a different value proposition today due to inflation and technological shifts. Furthermore, the software developed under this contract may require significant modernization or replacement to align with current technological capabilities and security requirements. Assessing its long-term value requires considering its operational lifespan and the cost of maintaining or updating legacy systems.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 12011 SUNSET HILLS RD, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $65,890,597

Exercised Options: $65,890,597

Current Obligation: $10,159,012

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200403409I

IDV Type: IDC

Timeline