Northrop Grumman received over $25M for computer systems design services from NIH over 9 years

Contract Overview

Contract Amount: $25,081,622 ($25.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2012-08-23

End Date: 2021-09-29

Contract Duration: 3,324 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $25.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type, Cost Plus Fixed Fee, can sometimes lead to cost overruns if not managed tightly. 3. A long duration of 3324 days (over 9 years) indicates a significant, ongoing need for these services. 4. The contractor, Northrop Grumman, is a large, established entity in the aerospace and defense sector. 5. The services provided fall under computer systems design, a critical area for modern government operations. 6. The contract was not set aside for small businesses, indicating it was likely too large or specialized.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. However, the total award of over $25 million spread across more than 9 years suggests a substantial investment. The Cost Plus Fixed Fee (CPFF) contract type means the government pays the contractor's costs plus a fixed fee, which can be less predictable in terms of final cost compared to fixed-price contracts. Without detailed cost breakdowns and performance reviews, it's difficult to definitively assess value for money, but the long duration and significant funding indicate a sustained need.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 2 offers suggests a moderate level of competition for this requirement. While two bidders participated, the specific details of the bidding process, such as the number of proposals received and the evaluation criteria, are not provided. A higher number of bidders typically leads to more competitive pricing and better value.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible price and quality through a wide range of potential providers.

Public Impact

The National Institutes of Health (NIH) benefits from these computer systems design services, likely supporting its extensive research and administrative functions. The services delivered are crucial for maintaining and potentially developing the IT infrastructure that underpins NIH's mission. The geographic impact is primarily centered around NIH facilities, likely in Maryland, but could extend to remote research collaborations. Workforce implications may include IT professionals employed by Northrop Grumman and potentially NIH staff interacting with the designed systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize higher spending if not rigorously managed.
The long contract duration might indicate a lack of flexibility to adapt to rapidly changing technological needs.
Lack of small business participation suggests potential missed opportunities for smaller, innovative firms.

Positive Signals

Awarded through full and open competition, indicating a broad search for qualified contractors.
Northrop Grumman is a large, established company with a significant track record in complex IT projects.
The sustained funding over nearly a decade suggests the services provided are essential and valued by the agency.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The IT services market for the federal government is substantial, with agencies constantly seeking to modernize their infrastructure and enhance their digital capabilities. Comparable spending benchmarks for IT services vary widely based on complexity, duration, and specific services offered. This contract's value of over $25 million over nine years places it as a significant, long-term IT support engagement within the federal landscape.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb: false'. This suggests that the scope or nature of the computer systems design services required was likely beyond the typical capabilities or contract size limitations for small business set-asides. Consequently, there are no direct subcontracting implications for small businesses stemming from this specific award, nor is there an immediate positive impact on the small business ecosystem through this particular contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the National Institutes of Health (NIH). The Cost Plus Fixed Fee structure necessitates close monitoring of costs and performance to ensure value for money. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Systems Modernization
Computer Systems Design
Information Technology Services
Federal IT Procurement
Healthcare IT Support

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration may not align with rapidly evolving technological needs.
Lack of small business participation limits opportunities for smaller firms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $25.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF

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 (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $25.1 million.

What is the period of performance?

Start: 2012-08-23. End: 2021-09-29.

What specific computer systems design services did Northrop Grumman provide under this contract?

The provided data indicates the contract was for 'Computer Systems Design Services' (NAICS 541512) awarded to Northrop Grumman Systems Corporation by the National Institutes of Health. However, the specific nature of these services is not detailed in the abbreviated data. Typically, computer systems design services can encompass a wide range of activities, including analyzing user needs, designing system architecture, developing software, integrating hardware and software components, and providing technical consulting. Given the long duration and substantial value, these services likely involved complex, mission-critical systems supporting NIH's research and operational functions. Further details would require accessing the full contract documentation or agency reports.

How does the $25 million award compare to other similar IT services contracts at NIH or other federal agencies?

Comparing the $25 million award to similar contracts requires access to a broader dataset of federal procurements. However, for a contract spanning over nine years (3324 days), $25 million represents an average annual value of approximately $2.7 million. This figure is moderate for large-scale IT systems design and integration projects within major federal agencies like NIH, which manage extensive and complex IT infrastructures. Larger, more comprehensive IT modernization efforts or enterprise-wide system implementations can easily reach tens or hundreds of millions of dollars. Conversely, smaller, more focused IT support tasks would be significantly less.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risk with a CPFF contract is the potential for cost overruns. While the 'fixed fee' component provides some predictability, the government bears the risk of all allowable costs. If the contractor's costs escalate beyond initial estimates due to inefficiencies, scope creep, or unforeseen challenges, the total contract value can increase significantly. For a contract of this duration (over 9 years), there's also a risk that the technology or requirements may evolve, potentially making the designed systems outdated or requiring costly modifications. Effective oversight, clear performance metrics, and robust change management are crucial to mitigate these risks.

What was Northrop Grumman's track record with the federal government prior to or during this contract?

Northrop Grumman Systems Corporation is a major defense contractor and a significant player in the federal IT services market. While the abbreviated data doesn't provide specific performance history for this contract, the company generally has a long history of performing large, complex government contracts across various agencies, including the Department of Defense and civilian agencies. Their track record typically involves large-scale system integration, cybersecurity, and IT modernization efforts. However, like any large contractor, they may have faced scrutiny or performance issues on specific contracts, which would be detailed in contract performance reports (e.g., CPARS) and agency Inspector General reports, not included in this summary data.

How has federal spending on computer systems design services evolved over the period of this contract (2012-2021)?

Federal spending on IT services, including computer systems design, has generally seen a consistent increase over the period of this contract (2012-2021). Agencies have increasingly relied on technology to deliver services, manage data, and improve operational efficiency. There has been a growing emphasis on cloud computing, cybersecurity, data analytics, and digital transformation initiatives. While specific figures for 'computer systems design services' fluctuate, the overall trend for federal IT spending has been upward, driven by modernization needs and evolving technological landscapes. This contract's sustained funding aligns with this broader trend of significant federal investment in IT.

What does the 'definitive contract' designation imply for this award?

The 'definitive contract' designation (aw: DEFINITIVE CONTRACT) indicates that this was a standalone, fully negotiated contract with all terms and conditions specified. This contrasts with other contract types like 'basic ordering agreements' or 'indefinite-delivery indefinite-quantity (IDIQ) contracts,' which often serve as frameworks for future orders. A definitive contract, especially one with a long duration and substantial value like this one, implies that the scope, price, and terms were finalized at the time of award, providing a clear agreement between the government and Northrop Grumman for the specified period and services.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $50,824,148

Exercised Options: $25,081,622

Current Obligation: $25,081,622

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $7,394,033

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline