Northrop Grumman awarded $20M+ for IT services by HHS, highlighting long-term contract needs

Contract Overview

Contract Amount: $20,037,680 ($20.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-01

End Date: 2021-03-28

Contract Duration: 1,669 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF MEDIA PRODUCTION

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $20.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF MEDIA PRODUCTION Key points: 1. Contract value exceeds $20 million over its duration, indicating significant IT support requirements. 2. Full and open competition suggests a robust market for these services, potentially driving competitive pricing. 3. The contract's duration of over 4 years points to a need for sustained IT system support. 4. Awarded under a Time and Materials pricing structure, which can pose cost control challenges. 5. The specific NAICS code (541512) indicates a focus on computer systems design services. 6. The contract was awarded as a Delivery Order, suggesting it's part of a larger indefinite-delivery contract.

Value Assessment

Rating: fair

The contract value of over $20 million for computer systems design services over approximately 4.5 years appears to be within a reasonable range for complex IT support. However, without specific benchmarks for the exact services rendered (e.g., system design, integration, maintenance), a precise value-for-money assessment is difficult. The Time and Materials pricing model, while flexible, can lead to higher costs if not closely managed, compared to fixed-price contracts. Benchmarking against similar large-scale IT system design contracts awarded by agencies like HHS would provide a clearer picture of its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This suggests a healthy competitive environment for the services sought by the Centers for Disease Control and Prevention. The presence of multiple bidders typically leads to better price discovery and potentially more innovative solutions. The fact that it was a delivery order under a larger contract implies that the initial competition was broad.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve the quality of services received.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from sustained IT support, crucial for its public health mission. Services likely include the design, development, and maintenance of critical computer systems supporting health data analysis and operations. The geographic impact is primarily national, supporting CDC operations across its facilities and potentially remote users. Workforce implications may involve specialized IT professionals employed by Northrop Grumman and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing can lead to cost overruns if not diligently managed and monitored.
The long duration of the contract may require ongoing scrutiny to ensure continued relevance and cost-effectiveness.
Lack of specific performance metrics in the provided data makes it difficult to assess the quality of services delivered.
The contract is a delivery order, suggesting it might be one of many under a larger IDIQ, making total spending harder to track.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should yield fair pricing.
The significant contract value suggests a critical need for these IT services, implying strategic importance to the agency.
Northrop Grumman is a large, established defense and aerospace contractor with extensive IT capabilities.
The contract supports a vital federal agency (CDC) in its public health mission.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The market for these services is vast and highly competitive, with numerous large and small businesses offering solutions. Federal spending in this area is substantial, driven by the need to modernize legacy systems, enhance cybersecurity, and support data analytics across all government agencies. Comparable spending benchmarks would typically involve analyzing IT service contracts of similar scope and duration awarded to major IT providers by other federal departments.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major corporation, it is unlikely to have significant direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor. The focus is on large-scale IT solutions rather than fostering the small business ecosystem through direct set-asides.

Oversight & Accountability

Oversight for this contract would typically be managed by the Contracting Officer's Representative (COR) within the Centers for Disease Control and Prevention, responsible for monitoring performance and ensuring compliance. The Department of Health and Human Services' Office of Inspector General (OIG) would have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal.

Related Government Programs

IT Services
Computer Systems Design
Health IT
Federal IT Modernization
HHS IT Contracts
CDC IT Support

Risk Flags

Time and Materials Pricing
Long Contract Duration
Lack of Specific Performance Metrics
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $20.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF MEDIA PRODUCTION

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 $20.0 million.

What is the period of performance?

Start: 2016-09-01. End: 2021-03-28.

What specific computer systems design services were provided under this contract?

The provided data identifies the contract under NAICS code 541512 (Computer Systems Design Services) and notes it was awarded to Northrop Grumman Systems Corporation. However, it does not detail the specific services rendered. Typically, this category includes designing and planning computer systems that integrate hardware, software, and communication technologies. This could encompass a wide range of activities such as requirements analysis, system architecture design, software integration, network design, and IT consulting. For a precise understanding, one would need to consult the contract's Statement of Work (SOW) or task orders issued under this award.

How does the $20 million award compare to similar IT service contracts at the CDC or HHS?

Comparing the $20 million award requires context regarding the specific IT services and duration. For large-scale IT system design and integration projects, $20 million over approximately 4.5 years is a substantial but not necessarily excessive amount, especially for a critical agency like the CDC. To benchmark effectively, one would need to identify similar contracts for computer systems design, IT modernization, or enterprise IT support awarded by HHS or other large federal health agencies during a comparable timeframe. Factors like contract type (T&M vs. Fixed Price), competition level, and specific deliverables heavily influence cost. Without direct comparable data points, it's challenging to definitively state if this represents excellent or questionable value.

What are the primary risks associated with a Time and Materials (T&M) contract of this nature?

The primary risk with Time and Materials (T&M) contracts, like this one, is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for the actual labor hours and material costs incurred. If project scope creeps, inefficiencies arise, or labor rates are higher than anticipated, the total cost can escalate beyond initial estimates. This necessitates robust oversight from the government to monitor hours, control scope, and ensure efficient resource utilization. The government bears more of the cost risk in T&M contracts compared to fixed-price arrangements.

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

Northrop Grumman Systems Corporation is a major aerospace and defense contractor with a significant presence in the federal IT services market. They have a long history of performing complex IT, systems integration, and cybersecurity services for various government agencies, including the Department of Defense, NASA, and civilian agencies like HHS. Their track record generally includes large, mission-critical programs. However, like any large contractor, specific contract performance can vary. Reviewing past performance evaluations and any documented issues on similar federal IT contracts would provide a more granular assessment of their specific capabilities and reliability for this type of work.

How does the 'full and open competition' impact the value proposition for taxpayers?

Full and open competition is generally beneficial for taxpayers. It allows any responsible source to submit a bid, maximizing the pool of potential contractors and fostering a competitive environment. This competition typically drives down prices as contractors vie for the award, potentially leading to better value. It also encourages innovation and efficiency as companies strive to offer the most attractive technical and cost proposals. For taxpayers, this means the government is more likely to secure necessary IT services at a fair market price, avoiding potential overpayment that could occur under less competitive procurement methods like sole-source awards.

What are the implications of this contract being a 'Delivery Order'?

The designation 'Delivery Order' indicates that this contract is likely a task order issued under a larger Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar multiple-award contract vehicle. This means the initial competition may have occurred when the parent IDIQ contract was awarded, and this specific delivery order represents a defined scope of work with a specific value and period of performance. While the initial competition for the IDIQ was likely full and open, the process for individual delivery orders can sometimes be less competitive depending on the structure of the IDIQ. It also implies that the total spending under the parent contract could be significantly higher than this single delivery order.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2016Q66041

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,409,698

Exercised Options: $20,037,680

Current Obligation: $20,037,680

Actual Outlays: $1,844,999

Subaward Activity

Number of Subawards: 97

Total Subaward Amount: $103,067,489

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: HHSD200201037217I

IDV Type: IDC

Timeline