HHS Spends $124.6M on Computer Systems Design Services with Northrop Grumman
Contract Overview
Contract Amount: $124,638,211 ($124.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2011-05-01
End Date: 2015-12-31
Contract Duration: 1,705 days
Daily Burn Rate: $73.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: OTHER ADP&TELECOMMUNICATIONS SVCS
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $124.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: OTHER ADP&TELECOMMUNICATIONS SVCS Key points: 1. Significant contract value of $124.6 million awarded to a single large business. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of over 4 years indicates a long-term need for these services. 4. The use of Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not managed carefully.
Value Assessment
Rating: fair
The contract's total value of $124.6 million for computer systems design services over approximately 4 years is substantial. Benchmarking against similar contracts for complex IT services is difficult without more granular data on the specific services provided, but the CPFF structure warrants close monitoring.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is generally positive for price discovery. However, the specific details of the bidding process and the number of bids received are not provided, making it hard to fully assess the competitive intensity and its impact on the final price.
Taxpayer Impact: While competition was employed, the CPFF contract type introduces potential for costs to exceed initial estimates, impacting the overall value for taxpayers. Effective oversight is crucial to mitigate this risk.
Public Impact
Taxpayers are funding essential IT services for the Centers for Medicare and Medicaid Services. The contract supports critical healthcare administration functions through technology. Potential for cost escalation under the CPFF contract type requires vigilant oversight.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee pricing structure
- Long contract duration
- Lack of specific performance metrics
- No indication of small business participation
Positive Signals
- Full and open competition utilized
- Awarded to a well-established contractor
Sector Analysis
This contract falls within the IT and professional services sector, specifically computer systems design. Spending in this area is critical for government operations, but benchmarks vary widely based on the complexity and scope of services. The value here is significant for a single contract.
Small Business Impact
The data indicates that this contract was not awarded to small businesses (sb: false). There is no information provided on subcontracting opportunities for small businesses, which is a missed opportunity for broader economic impact.
Oversight & Accountability
The contract's duration and CPFF structure necessitate robust oversight from the Department of Health and Human Services to ensure cost control and performance. Regular audits and performance reviews are essential to hold the contractor accountable and protect taxpayer funds.
Related Government Programs
- Computer Systems Design Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Lack of transparency on specific deliverables and performance metrics
- No small business participation noted
- Long contract duration may indicate a lack of flexibility or innovation
Tags
computer-systems-design-services, department-of-health-and-human-services, va, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $124.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. OTHER ADP&TELECOMMUNICATIONS SVCS
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 Medicare and Medicaid Services).
What is the total obligated amount?
The obligated amount is $124.6 million.
What is the period of performance?
Start: 2011-05-01. End: 2015-12-31.
What specific computer systems design services were rendered under this contract, and how do they align with CMS's core mission objectives?
The contract for 'Computer Systems Design Services' (NAICS 541512) likely encompassed a range of activities such as system analysis, design, development, integration, and potentially maintenance of IT systems supporting CMS operations. These services are crucial for managing Medicare and Medicaid programs, processing claims, and maintaining beneficiary data. The alignment would depend on the specific projects undertaken, but generally, such services are fundamental to the agency's technological infrastructure and operational efficiency.
Given the Cost Plus Fixed Fee (CPFF) structure, what mechanisms were in place to control costs and prevent scope creep?
CPFF contracts require stringent oversight to manage costs. Mechanisms likely included detailed work breakdown structures, regular progress reviews, baseline cost tracking against performance, and defined ceilings for allowable costs. The government contracting officer and technical team would need to actively monitor expenditures, approve any changes to the scope of work through formal modification processes, and ensure that the fixed fee remained appropriate based on performance and effort.
How was the success and effectiveness of Northrop Grumman's performance measured throughout the contract's duration?
Effectiveness would typically be measured against pre-defined performance standards and metrics outlined in the contract's statement of work. This could include factors like system uptime, successful implementation of new features, adherence to project timelines, quality of deliverables, and user satisfaction. Formal performance evaluations, contractor performance assessment reporting (CPARs), and milestone reviews would have been used to document and assess the contractor's success.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 7
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 8110 GATEHOUSE RD, FALLS CHURCH, VA, 22042
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $126,926,656
Exercised Options: $124,638,211
Current Obligation: $124,638,211
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HHSM500200700014I
IDV Type: IDC
Timeline
Start Date: 2011-05-01
Current End Date: 2015-12-31
Potential End Date: 2015-12-31 00:00:00
Last Modified: 2015-09-18
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