DoD Awards Northrop Grumman $18.3M for Program Management Services, Custom Computer Programming
Contract Overview
Contract Amount: $18,280,381 ($18.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-03-05
End Date: 2026-03-04
Contract Duration: 2,921 days
Daily Burn Rate: $6.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: IGF::OT::IGF THE SCOPE OF WORK FOR THIS AWARD WILL INCLUDE CONTRACTOR PROVIDED PROGRAM MANAGEMENT SERVICES TO ENABLE PLANNING, CONTROLLING, DIRECTING, MONITORING, REPORTING, AND MANAGING IN A MANNER CONSISTENT WITH SOW REQUIREMENTS.
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35805
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $18.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF THE SCOPE OF WORK FOR THIS AWARD WILL INCLUDE CONTRACTOR PROVIDED PROGRAM MANAGEMENT SERVICES TO ENABLE PLANNING, CONTROLLING, DIRECTING, MONITORING, REPORTING, AND MANAGING IN A MANNER CONSISTENT WITH SOW REQUIREMENTS. Key points: 1. Significant contract value of $18.3 million for essential program management and IT services. 2. Sole-source award to Northrop Grumman highlights potential lack of competition. 3. Risk of overpayment due to cost-plus contract type and limited competition. 4. IT sector spending on custom programming services is substantial and growing.
Value Assessment
Rating: questionable
The contract is a Cost Plus Award Fee (CPAF) type, which can lead to higher costs compared to fixed-price contracts. The total award value of $18.3 million needs to be benchmarked against similar program management and custom computer programming services contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and may result in a less favorable price for the government.
Taxpayer Impact: The sole-source nature of this award raises concerns about whether taxpayers received the best possible value, as competitive bidding was bypassed.
Public Impact
Taxpayers may be paying a premium due to the absence of a competitive bidding process. The long contract duration (until 2026) means sustained potential for cost inefficiencies. Essential program management services are being provided, which are critical for defense operations. The specific nature of custom computer programming could be highly specialized, potentially justifying limited competition in some cases.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Essential program management services
- Contract awarded to a known entity (Northrop Grumman)
Sector Analysis
This contract falls within the Information Technology sector, specifically custom computer programming services. Spending in this area is consistently high across government agencies, driven by the need for specialized software development and IT support.
Small Business Impact
The awardee is Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The contract type (CPAF) and sole-source nature warrant close oversight to ensure cost control and adherence to scope of work. Regular performance reviews and audits are crucial for accountability.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award bypasses competitive pricing.
- Cost-plus contract type shifts cost risk to the government.
- Long contract duration increases risk of obsolescence and cost creep.
- Lack of small business participation.
- Potential for performance incentives to inflate costs.
Tags
custom-computer-programming-services, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF THE SCOPE OF WORK FOR THIS AWARD WILL INCLUDE CONTRACTOR PROVIDED PROGRAM MANAGEMENT SERVICES TO ENABLE PLANNING, CONTROLLING, DIRECTING, MONITORING, REPORTING, AND MANAGING IN A MANNER CONSISTENT WITH SOW REQUIREMENTS.
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $18.3 million.
What is the period of performance?
Start: 2018-03-05. End: 2026-03-04.
What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The justification for a sole-source award typically involves factors such as the unique capabilities of the contractor, urgent needs, or the unavailability of other sources. Without specific documentation, it's difficult to ascertain the precise reasons. However, the Missile Defense Agency likely determined that Northrop Grumman possessed specialized expertise or proprietary technology essential for this program management and custom programming task, making competition impractical or detrimental to mission success.
How does the Cost Plus Award Fee (CPAF) structure impact the government's ability to control costs on this contract?
A CPAF contract allows the contractor to recover allowable costs plus a fixed fee, with a portion of that fee being an award amount determined by performance against objective criteria. While it incentivizes performance, it inherently shifts cost risk to the government. Effective oversight, clear performance metrics, and rigorous auditing are essential to ensure the contractor manages costs efficiently and that the award fee is earned appropriately, preventing potential overspending.
What are the potential risks associated with a long-duration contract (nearly 8 years) for custom computer programming services?
Long-duration contracts for custom programming can face risks such as technological obsolescence, evolving requirements, and potential cost overruns if not managed tightly. The government might lock into outdated technology or pay inflated prices if market rates decrease. Ensuring flexibility in the SOW, regular re-evaluation of needs, and strong contract management are vital to mitigate these risks and ensure the services remain relevant and cost-effective throughout the contract's life.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014718R0003
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 213 WYNN DR, HUNTSVILLE, AL, 35805
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,336,580
Exercised Options: $20,336,580
Current Obligation: $18,280,381
Actual Outlays: $674,519
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $1,606,672
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ014718D0005
IDV Type: IDC
Timeline
Start Date: 2018-03-05
Current End Date: 2026-03-04
Potential End Date: 2026-03-04 00:00:00
Last Modified: 2025-12-03
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