HHS awarded $30.7M for custom programming, with Northrop Grumman as the primary contractor

Contract Overview

Contract Amount: $30,670,891 ($30.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2007-09-01

End Date: 2011-06-30

Contract Duration: 1,398 days

Daily Burn Rate: $21.9K/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 $30.7 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 potentially competitive bidding process. 3. The contract duration of nearly four years indicates a significant, long-term need for these services. 4. The primary contractor, Northrop Grumman, is a large, established defense and aerospace company, suggesting significant capacity but potentially higher overhead. 5. The specific NAICS code (541511) points to custom computer programming services, a critical area for government IT infrastructure. 6. The contract was awarded as a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: fair

The contract's value of approximately $30.7 million over nearly four years for custom computer programming services appears within a reasonable range for a large federal agency like HHS. However, without specific details on the scope of work, deliverables, and the complexity of the programming required, a precise value-for-money assessment is challenging. The CPFF pricing structure introduces a degree of risk, as it allows for reimbursement of costs plus a fixed fee, which can sometimes incentivize higher spending if not tightly controlled. Benchmarking against similar custom programming contracts for federal agencies of comparable size and complexity would be necessary for a more definitive evaluation.

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 suggests a robust competitive environment at the outset. However, the data only specifies the award type as a 'delivery order,' which might imply it was placed against a pre-existing IDIQ contract. If the IDIQ itself was competed fully and openly, then the overall competition is strong. The number of bidders is not specified, which limits the ability to assess the intensity of the competition and its potential impact on price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not limited to a single provider, increasing the likelihood of securing services at a fair market price.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from enhanced custom computer programming services, likely supporting its mission-critical IT systems and data management. Services delivered include custom software development and programming, essential for modernizing and maintaining government IT infrastructure. The contract's geographic impact is centered in Georgia (stating 'GA' and 'GEORGIA'), likely where the contractor's personnel or the serviced facilities are located. Workforce implications may include the employment of skilled programmers and IT professionals by Northrop Grumman to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not meticulously managed and monitored.
Lack of specific details on the number of bidders limits the assessment of competitive intensity.
The contractor, Northrop Grumman, is a large entity; while capable, its size might imply higher indirect costs compared to smaller, specialized firms.

Positive Signals

Awarded under full and open competition, suggesting a potentially broad search for qualified vendors.
The contract duration of nearly four years indicates a stable, long-term requirement, allowing for focused development and integration.
Northrop Grumman's established track record in government contracting suggests a high likelihood of successful delivery.

Sector Analysis

The IT services sector, particularly custom computer programming, is a significant area of federal spending. Agencies rely heavily on these services to develop, maintain, and modernize their complex IT systems, manage vast amounts of data, and support critical operations. Spending in this sector is driven by the need for specialized software solutions tailored to unique government requirements, often involving sensitive data and stringent security protocols. Comparable spending benchmarks would typically look at the average cost of custom programming services for federal agencies of similar size and mission scope, considering factors like labor rates, project complexity, and required security clearances.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major corporation like Northrop Grumman, it is unlikely to have significant direct subcontracting opportunities specifically targeted at small businesses unless mandated by the prime contractor or agency policy. The absence of small business participation in this specific award means it does not directly contribute to the federal small business contracting goals through set-asides, though the prime contractor may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and specifically the Centers for Disease Control and Prevention (CDC). As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to ensure that costs incurred are reasonable and allocable to the contract. The contract's performance would be monitored through regular reporting, milestone reviews, and potentially quality assurance surveillance plans. Transparency would be facilitated through contract award databases like FPDS-NG, though detailed performance metrics and specific oversight reports are often internal or not publicly disseminated.

Related Government Programs

HHS IT Modernization Initiatives
CDC Data Management Systems
Custom Software Development Services
Federal IT Services Contracts
Northrop Grumman Federal Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing requires diligent oversight to manage costs.
Contract duration is substantial, necessitating ongoing performance monitoring.
Limited information on the number of bidders restricts competition assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.7 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 $30.7 million.

What is the period of performance?

Start: 2007-09-01. End: 2011-06-30.

What was the specific scope of work for these custom computer programming services?

The provided data identifies the NAICS code as 541511 (Custom Computer Programming Services) and the awarding agency as the Centers for Disease Control and Prevention (CDC) within HHS. However, the specific scope of work is not detailed. Typically, such contracts involve the design, development, implementation, and maintenance of specialized software applications tailored to the unique needs of the agency. This could range from developing new systems for data analysis and public health surveillance to modernizing legacy applications, integrating disparate IT systems, or creating custom tools for research and operational support. Without further documentation, the precise nature of the programming services remains unspecified.

How does the $30.7 million contract value compare to similar custom programming contracts awarded by the CDC or HHS?

A direct comparison of the $30.7 million contract value to similar custom programming contracts requires access to a broader dataset of federal procurement information, specifically filtering for contracts with the CDC or HHS under NAICS code 541511 over the period of 2007-2011. However, for a large federal agency like the CDC, a contract of this magnitude over nearly four years for custom programming is not unusual, especially if it involves significant system development or modernization. The value reflects the complexity, duration, and specialized labor required for such IT projects. Benchmarking would ideally involve comparing the average cost per year or per deliverable against other contracts of similar scope and complexity within the federal government.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) pricing structure used in this contract?

The Cost Plus Fixed Fee (CPFF) pricing structure carries inherent risks, primarily related to cost control. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred during performance, plus a predetermined fixed fee representing profit. The primary risk for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as they are assured their costs will be covered. If the government's oversight and auditing are not rigorous, this can lead to cost overruns. The fixed fee, however, does provide some incentive for the contractor to complete the work efficiently to maximize their return on the fixed profit amount, but the primary risk remains the potential for escalating costs if the scope is not well-defined or managed.

What is Northrop Grumman's track record with federal IT service contracts, particularly with HHS?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various federal agencies, including significant work within the Department of Health and Human Services (HHS). Their track record generally includes large-scale IT services, systems integration, cybersecurity, and complex program management. While specific performance details for this particular $30.7 million contract (2007-2011) are not publicly detailed here, Northrop Grumman has historically been awarded numerous large federal contracts. Assessing their overall track record would involve reviewing past performance evaluations, contract awards, and any reported issues or successes across their portfolio of government IT contracts.

How has federal spending on custom computer programming services (NAICS 541511) evolved since this contract was awarded?

Federal spending on custom computer programming services (NAICS 541511) has generally seen a significant upward trend since the period of this contract (2007-2011). This growth is driven by the increasing digitization of government operations, the need to modernize aging IT infrastructure, the expansion of data analytics capabilities, and the growing importance of cybersecurity. Agencies across the government continually invest in custom software to meet unique mission requirements that off-the-shelf solutions cannot address. Factors such as cloud computing adoption, artificial intelligence, and big data initiatives have further fueled demand for specialized programming expertise, leading to increased overall federal outlays in this category over the subsequent years.

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

Solicitation ID: 2000N00120

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: $1,107,168,426

Exercised Options: $1,107,168,426

Current Obligation: $30,670,891

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200403409I

IDV Type: IDC

Timeline