HHS awarded $11.4M for IT management support to Northrop Grumman, a competitive delivery order

Contract Overview

Contract Amount: $11,401,767 ($11.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2005-01-12

End Date: 2008-05-09

Contract Duration: 1,213 days

Daily Burn Rate: $9.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: ORA IT MANAGEMENT SUPPORT

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20894

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $11.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ORA IT MANAGEMENT SUPPORT Key points: 1. The contract was awarded competitively, suggesting potential for good value. 2. Northrop Grumman's extensive experience in IT services positions them well for this contract. 3. The Time and Materials pricing model introduces some cost uncertainty. 4. Performance duration of over three years indicates a significant, ongoing need for these services. 5. The contract falls under custom computer programming services, a key area for federal IT. 6. The geographic location in Maryland is a common hub for federal IT contracts.

Value Assessment

Rating: good

The total award of $11.4 million over approximately three years for IT management support appears reasonable given the scope. Benchmarking against similar custom computer programming services contracts awarded by the FDA or HHS would provide a more precise value-for-money assessment. The Time and Materials (T&M) pricing structure, while flexible, can sometimes lead to cost overruns if not closely managed, which is a common risk for this contract type. However, the competitive nature of the award suggests that initial pricing was likely scrutinized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The specific number of bidders is not provided, but a full and open competition generally fosters a more robust price discovery process and encourages vendors to offer competitive terms. This approach is favored for ensuring that the government obtains services at the best possible value.

Taxpayer Impact: A competitive award means taxpayer dollars are more likely to be spent efficiently, as vendors are incentivized to offer lower prices and better terms to win the contract.

Public Impact

The Food and Drug Administration (FDA) benefits from enhanced IT management support, crucial for its mission. Services delivered likely include system maintenance, development, and strategic IT planning. The geographic impact is primarily within Maryland, where the contractor is located. The contract supports IT professionals and potentially other roles within Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing can lead to unpredictable costs if not managed diligently.
The duration of the contract (over three years) means sustained oversight is necessary to ensure continued value.
Reliance on a single large contractor for critical IT functions can pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Northrop Grumman is a large, established contractor with significant experience in federal IT.
The contract supports essential IT management functions for a critical agency (FDA).

Sector Analysis

This contract falls within the Custom Computer Programming Services sector (NAICS 541511), a significant segment of the federal IT market. This sector encompasses a wide range of services, from software development to IT infrastructure management. Federal spending in this area is substantial, driven by the need to modernize legacy systems, develop new applications, and maintain cybersecurity. Comparable contracts often involve significant dollar values and long durations, reflecting the complexity and criticality of IT services for government operations.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like Northrop Grumman suggests that opportunities for small businesses might be limited unless they are part of Northrop Grumman's subcontracting team. Further analysis would be needed to determine if small business participation was encouraged or mandated through subcontracting plans.

Oversight & Accountability

Oversight for this contract would typically be managed by the Food and Drug Administration's contracting officers and program managers. Accountability measures are inherent in the contract's performance requirements and delivery schedules. Transparency is generally facilitated through contract databases like FPDS-NG, where award details are publicly available. The Inspector General's office for the Department of Health and Human Services would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal IT Services
Custom Computer Programming
IT Management Support
Department of Health and Human Services Contracts
Food and Drug Administration IT Procurement

Risk Flags

Potential for cost overruns due to T&M pricing structure.
Need for sustained, diligent oversight throughout the contract duration.
Reliance on a single large contractor for critical functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $11.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ORA IT MANAGEMENT SUPPORT

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 (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $11.4 million.

What is the period of performance?

Start: 2005-01-12. End: 2008-05-09.

What is Northrop Grumman's track record with the FDA and HHS for similar IT services?

Northrop Grumman Systems Corporation has a substantial history of contracting with various federal agencies, including the Department of Health and Human Services (HHS) and its sub-agencies like the Food and Drug Administration (FDA). Their portfolio often includes complex IT services, systems integration, and support for mission-critical applications. Analyzing past performance reviews, contract modifications, and any past performance issues (e.g., CPARS reports) would provide a clearer picture of their reliability and effectiveness in delivering similar IT management support. Given their size and experience, they are generally considered a capable contractor, but specific project histories are crucial for a complete assessment.

How does the $11.4 million award compare to other IT management support contracts at the FDA?

The $11.4 million award for IT management support over approximately three years is a moderate-sized contract within the federal IT landscape. To benchmark its value, one would compare it against similar contracts awarded by the FDA or other HHS agencies for custom computer programming services (NAICS 541511) or IT management. Factors like contract duration, specific deliverables, and the level of expertise required influence pricing. If other comparable contracts for similar services range from $5 million to $20 million over similar periods, then this award would be considered within the expected range. A detailed analysis would involve comparing the labor categories, hours, and rates proposed against market data and historical agency spending.

What are the primary risks associated with a Time and Materials (T&M) contract for IT services?

The primary risk with a Time and Materials (T&M) contract, like this one, is the potential for cost escalation. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified rates and for actual material costs. This structure offers flexibility but lacks a ceiling on the total cost, making it difficult to predict the final expenditure. Effective risk mitigation requires robust government oversight, including detailed monitoring of labor hours, verification of materials, and strong project management to ensure efficient work and prevent scope creep. Without diligent management, T&M contracts can exceed initial budget estimates.

How effective is full and open competition in ensuring value for IT services like these?

Full and open competition is generally considered the most effective method for ensuring value in federal IT procurements. By allowing all responsible sources to submit bids, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This process drives down costs as contractors vie for the award. For IT services, where requirements can evolve, competitive bidding also encourages vendors to propose adaptable solutions. The FDA's decision to use this method for the $11.4 million IT management support contract suggests a commitment to achieving the best possible outcome for taxpayers.

What is the typical duration and spending pattern for FDA IT management support contracts?

The FDA, like many federal agencies, relies heavily on IT for its operations, including regulatory processes, data management, and research. Contracts for IT management support often span multiple years, typically ranging from one to five years, often with options for extension. Spending patterns can vary significantly based on the specific services required, whether it's system development, cybersecurity, infrastructure maintenance, or specialized software support. Annual spending can range from hundreds of thousands to tens of millions of dollars, depending on the contract's scope and complexity. The $11.4 million awarded here over roughly three years aligns with the agency's need for sustained, significant IT support.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DR, MC LEAN, VA, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,402,100

Exercised Options: $11,401,767

Current Obligation: $11,401,767

Parent Contract

Parent Award PIID: GS35F4506G

IDV Type: FSS

Timeline