DoD's $81M Joint Deployment Analysis Support Services contract awarded to Northrop Grumman shows fair value

Contract Overview

Contract Amount: $81,130,002 ($81.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2026-03-31

Contract Duration: 2,007 days

Daily Burn Rate: $40.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT DEPLOYMENT ANALYSIS SUPPORT SERVICES

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $81.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JOINT DEPLOYMENT ANALYSIS SUPPORT SERVICES Key points: 1. Contract value of $81.1M over six years suggests a moderate annual spend. 2. Full and open competition was utilized, indicating a potentially competitive bidding process. 3. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, common for ongoing support services. 4. Engineering services (NAICS 541330) are the primary focus, aligning with defense logistics and analysis needs. 5. The contract's duration of nearly six years allows for sustained support but requires ongoing performance monitoring. 6. The fixed-price contract type shifts performance risk to the contractor, potentially benefiting the government if costs are managed effectively.

Value Assessment

Rating: fair

The total contract value of $81.1 million over approximately six years averages to about $13.5 million annually. Benchmarking this against similar large-scale engineering and analysis support contracts for defense logistics is challenging without more specific service details. However, the firm-fixed-price structure suggests that the government has negotiated a price upfront, and the contractor bears the risk of cost overruns. This can be a good value proposition if the contractor's proposed costs were competitive and realistic.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were likely invited to submit proposals. This method is generally preferred as it maximizes the pool of potential offerors and fosters a competitive environment, which can lead to better pricing and innovation. The number of bidders and the specific evaluation criteria would provide further insight into the strength of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a level playing field for contractors, which can drive down prices and improve the quality of services received.

Public Impact

This contract supports the Department of Defense's USTRANSCOM, directly benefiting military deployment and logistical analysis capabilities. The services provided are critical for understanding and optimizing the movement of personnel and equipment. The geographic impact is likely global, given the nature of military deployments. The contract supports specialized engineering and analysis roles, potentially impacting a skilled workforce within the defense contracting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed throughout the contract period.
Reliance on a single large contractor for critical deployment analysis could pose a risk if performance falters.
The long duration necessitates robust oversight to ensure continued relevance and effectiveness of services.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that could yield favorable pricing.
Firm-fixed-price contract type aligns incentives for contractor efficiency and cost control.
The contract supports a critical defense function (deployment analysis), indicating strategic importance.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a significant segment of the federal contracting market supporting defense and other government agencies. The market for defense logistics and analysis support is substantial, with numerous large and small firms competing for these specialized services. Spending in this area is driven by national security requirements and the need for efficient operational planning and execution. Comparable spending benchmarks would depend on the specific nature of the 'joint deployment analysis' and the scale of operations supported.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, Northrop Grumman, may engage small businesses as subcontractors to fulfill specific aspects of the contract, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense, specifically USTRANSCOM. As a delivery order under an IDIQ, the task orders issued would likely have specific performance metrics and reporting requirements. Transparency is typically managed through contract award databases and reporting mechanisms. The extent of Inspector General (IG) jurisdiction would depend on the specific findings of any audits or investigations related to the contract's performance or financial integrity.

Related Government Programs

Defense Logistics Agency Support Services
Military Transportation and Logistics Command Contracts
Joint Staff Support Services
Combatant Command Support Contracts

Risk Flags

Long contract duration may lead to misalignment with evolving requirements.
Reliance on a single large contractor for critical support.
Potential for reduced innovation over the contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JOINT DEPLOYMENT ANALYSIS SUPPORT SERVICES

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 (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $81.1 million.

What is the period of performance?

Start: 2020-10-01. End: 2026-03-31.

What is Northrop Grumman's track record with similar large-scale defense analysis and support contracts?

Northrop Grumman is a major defense contractor with extensive experience in providing a wide range of services to the Department of Defense and other government agencies. They have a history of managing complex programs involving systems engineering, logistics, intelligence analysis, and operational support. Their track record includes numerous large-value contracts, often involving advanced technologies and critical mission support. While specific performance details for past contracts are not provided here, their status as a prime contractor on significant defense initiatives suggests a capacity to handle substantial and complex requirements like the Joint Deployment Analysis Support Services contract. Evaluating their past performance on similar contracts would involve reviewing contract award data, performance evaluations (e.g., CPARS), and any documented issues or successes.

How does the annual value of this contract compare to other USTRANSCOM engineering support contracts?

The annual value of this contract, averaging approximately $13.5 million ($81.1M / ~6 years), needs to be contextualized within USTRANSCOM's overall budget and procurement activities. USTRANSCOM manages vast logistical operations, and the cost of specialized support services can vary significantly based on scope, duration, and complexity. Without access to a comprehensive database of all USTRANSCOM engineering support contracts, a direct comparison is difficult. However, this annual figure appears moderate for a large, established defense contractor supporting a major command. It suggests a focused scope of work rather than a broad, enterprise-wide support contract. Further analysis would require comparing it to contracts with similar NAICS codes (541330) and service descriptions awarded by USTRANSCOM or other defense logistics agencies.

What are the key performance indicators (KPIs) used to assess the success of this contract?

The specific Key Performance Indicators (KPIs) for the Joint Deployment Analysis Support Services contract are not detailed in the provided data. However, for contracts of this nature, typical KPIs would likely focus on the accuracy and timeliness of deployment analyses, the effectiveness of recommendations provided to USTRANSCOM, adherence to project schedules, and the quality of deliverables (reports, models, simulations). Performance would also be assessed based on the contractor's ability to meet technical requirements, manage costs within the firm-fixed-price structure, and maintain security protocols. The government's contract performance evaluation system (e.g., CPARS) would document adherence to these KPIs throughout the contract's life.

What is the potential risk associated with the long duration (nearly 6 years) of this contract?

The nearly six-year duration of this contract presents several potential risks. Firstly, the threat landscape and military operational requirements can evolve rapidly; a long-term contract might become misaligned with current needs if not actively managed and potentially modified. Secondly, maintaining consistent performance quality over an extended period can be challenging, requiring sustained oversight. Thirdly, there's a risk of contractor complacency or reduced innovation if competition is limited after the initial award. Finally, the government's ability to adapt to new technologies or approaches might be constrained if locked into a long-term service agreement. Mitigating these risks involves robust contract management, regular performance reviews, and potentially incorporating flexibility clauses for adjustments.

How does the firm-fixed-price (FFP) contract type impact cost control and contractor incentives?

The firm-fixed-price (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and risks are manageable. Under an FFP contract, the contractor agrees to a total price for a specified scope of work, and this price is not subject to adjustment based on the contractor's cost experience. This structure places the primary risk of cost overruns on the contractor, incentivizing them to manage their costs efficiently and effectively to maximize profit. For the government, it provides cost certainty. However, it can also incentivize contractors to cut corners on quality if not adequately monitored, and it may lead to higher initial bid prices to account for the contractor's risk. For this $81.1M contract, the FFP structure means Northrop Grumman is responsible for delivering the specified analysis support services within the agreed-upon total price.

What is the significance of this contract being a 'delivery order' under an IDIQ contract?

This contract being a 'delivery order' signifies that it is one of potentially many task orders issued under a larger, pre-negotiated Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract vehicle. IDIQs are commonly used by government agencies to procure a broad range of supplies or services over a period of time. They establish terms, conditions, and pricing for potential future orders, but do not guarantee a specific quantity. A delivery order then specifies the exact quantity, delivery schedule, and price for a particular requirement within the scope of the IDIQ. This approach offers flexibility for the agency, allowing them to order services as needed, and provides a streamlined process for acquisition. For the contractor, it offers potential for sustained work but requires careful management of resources across multiple orders.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $87,025,520

Exercised Options: $81,130,107

Current Obligation: $81,130,002

Actual Outlays: $7,194,332

Subaward Activity

Number of Subawards: 222

Total Subaward Amount: $881,345,174

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU125

IDV Type: IDC

Timeline