HHS awarded $15.6M to Northrop Grumman for custom computer programming services over 5 years
Contract Overview
Contract Amount: $15,584,375 ($15.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2006-09-01
End Date: 2011-06-30
Contract Duration: 1,763 days
Daily Burn Rate: $8.8K/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, 30329
State: Georgia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $15.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MULTIPLE CONTRACT TYPES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of 1763 days (approx. 4.8 years) indicates a significant, long-term project. 4. The award was a Delivery Order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The contract was awarded to a single vendor, Northrop Grumman Systems Corporation. 6. The North American Industry Classification System (NAICS) code 541511 points to custom computer programming services.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more specific details on the services rendered and comparable market rates for custom computer programming. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the government pays the contractor's actual costs plus a fixed fee. While the total award amount is $15.6 million, the actual costs incurred and the efficiency of the services provided are key determinants of value. Without data on the fixed fee percentage or the final incurred costs, a definitive value assessment is difficult.
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 robust bidding process where multiple vendors had the opportunity to compete for the contract. The number of bidders is not specified, but the open competition framework is generally favorable for price discovery and achieving competitive pricing.
Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government explores a wide range of potential solutions and providers.
Public Impact
The primary beneficiary is the Centers for Disease Control and Prevention (CDC), a key agency within HHS. The services delivered are custom computer programming, likely supporting critical public health IT infrastructure or data analysis. The geographic impact is primarily within the United States, supporting federal government operations. The contract supports a workforce skilled in software development and IT services, likely within Northrop Grumman's employee base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not closely monitored.
- Lack of specific performance metrics or outcomes makes it difficult to assess the true effectiveness and value.
- The duration of the contract (nearly 5 years) requires sustained oversight to ensure continued relevance and efficiency.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
- The contract is with a large, established defense and aerospace company (Northrop Grumman), implying experience and capability.
- The contract supports the Centers for Disease Control and Prevention, a critical public health agency.
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 heavily 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 on IT services is a substantial portion of the federal budget, supporting everything from defense systems to public health data management.
Small Business Impact
There is no indication that this contract involved small business set-asides, as the award was made to Northrop Grumman Systems Corporation, a large prime contractor. The contract's structure does not explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Northrop Grumman actively pursues small business subcontractors for specific components of the work.
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). The Cost Plus Fixed Fee structure necessitates diligent oversight to monitor incurred costs, ensure the fixed fee remains appropriate, and verify that the work performed aligns with the contract's objectives. Transparency would be enhanced through regular reporting requirements and potential reviews by the HHS Office of Inspector General (OIG) if specific concerns arise.
Related Government Programs
- HHS IT Modernization Initiatives
- CDC Data Management Systems
- Federal Custom Software Development Contracts
- Health Information Technology Services
Risk Flags
- Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
- Lack of detailed performance metrics makes value assessment difficult.
- Award to a single large contractor may limit opportunities for smaller, specialized firms.
Tags
it, hhs, cdc, custom-computer-programming-services, cost-plus-fixed-fee, full-and-open-competition, delivery-order, northrop-grumman-systems-corporation, georgia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $15.6 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 $15.6 million.
What is the period of performance?
Start: 2006-09-01. End: 2011-06-30.
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, the specific nature of these services is not detailed. Typically, this could encompass a wide range of activities, including designing, developing, and implementing custom software applications, databases, or IT systems tailored to the unique needs of the Centers for Disease Control and Prevention (CDC). This might involve creating new software from scratch, modifying existing software, or integrating different software systems. Without further documentation, the precise deliverables remain unspecified, making it difficult to assess their impact or efficiency.
How does the $15.6 million award compare to similar custom programming contracts at the CDC or HHS?
Comparing the $15.6 million award for custom computer programming services requires context regarding the contract's duration and scope. This contract spanned approximately 4.8 years (1763 days). To benchmark effectively, one would need to analyze the average cost per year or per service unit for similar custom programming projects within the CDC or HHS. Given the CPFF structure, the total cost is a key factor. Without access to a database of comparable contracts with detailed service descriptions and final costs, a precise comparison is challenging. However, $15.6 million over nearly five years for specialized IT development for a major federal agency like the CDC suggests a significant undertaking, potentially involving complex system development or maintenance.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this nature?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the fee is fixed, the government bears the risk of all allowable costs incurred by the contractor. If the contractor is inefficient or if unforeseen complexities arise, the total cost to the government can escalate significantly beyond initial estimates. This structure can reduce the contractor's incentive to control costs aggressively, as their profit margin (the fixed fee) is guaranteed regardless of cost efficiency. Effective oversight, detailed cost tracking, and clear performance standards are crucial to mitigate these risks and ensure the government receives good value for its investment.
What was Northrop Grumman Systems Corporation's track record with HHS or similar agencies prior to this award?
Northrop Grumman Systems Corporation is a major defense contractor with extensive experience serving various U.S. government agencies, including the Department of Health and Human Services (HHS). While specific performance details for this particular contract are not provided, Northrop Grumman generally has a substantial portfolio of IT, aerospace, and defense-related contracts. Their track record with HHS would likely involve numerous projects, varying in size and complexity. A comprehensive assessment would require reviewing past performance evaluations, contract modifications, and any documented issues or successes on prior HHS contracts to gauge their reliability and capability in delivering complex IT solutions.
How has federal spending on custom computer programming services (NAICS 541511) trended over the period of this contract and beyond?
Federal spending on custom computer programming services (NAICS 541511) has generally seen a consistent increase over the past two decades, reflecting the growing reliance of government agencies on specialized IT solutions. During the period of this contract (roughly 2006-2011), federal IT spending was substantial, driven by modernization efforts and the need for tailored software to support agency missions. Post-2011, this trend has largely continued, with significant investments in areas like cloud computing, data analytics, cybersecurity, and digital transformation. Agencies like HHS consistently require custom programming to manage vast datasets, develop public health platforms, and enhance operational efficiency, making this a stable and significant category of federal IT expenditure.
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: $366,740,760
Exercised Options: $326,525,370
Current Obligation: $15,584,375
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSD200200403409I
IDV Type: IDC
Timeline
Start Date: 2006-09-01
Current End Date: 2011-06-30
Potential End Date: 2011-06-30 00:00:00
Last Modified: 2023-01-10
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