Interior's $11.7M IT contract to Northrop Grumman faces scrutiny over non-competitive award and long duration

Contract Overview

Contract Amount: $11,746,610 ($11.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of the Interior

Start Date: 2003-10-30

End Date: 2010-06-30

Contract Duration: 2,435 days

Daily Burn Rate: $4.8K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: IT SERVICES

Place of Performance

Location: DENVER, JEFFERSON County, COLORADO, 80225

State: Colorado Government Spending

Plain-Language Summary

Department of the Interior obligated $11.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IT SERVICES Key points: 1. The contract's non-competitive nature raises questions about potential overspending and lack of market pressure. 2. A lengthy period of performance (nearly 7 years) suggests a need for robust oversight to ensure continued value. 3. The reliance on a single contractor may limit opportunities for innovation and cost-efficiency through competition. 4. Assessing the specific IT services delivered is crucial to understanding the true value proposition. 5. The contract's structure as a delivery order under a larger award warrants examination of the parent contract's terms.

Value Assessment

Rating: questionable

Benchmarking the value of this $11.7 million IT services contract is challenging without detailed service descriptions and performance metrics. However, its non-competitive award and long duration (nearly seven years) suggest a potential for reduced value compared to competitively sourced contracts. The absence of a clear per-unit cost benchmark makes it difficult to assess pricing efficiency. Further analysis would require comparing the services rendered against industry standards and the pricing of similar contracts awarded through competitive means.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a non-competitive basis, specifically as a 'NON-COMPETITIVE DELIVERY ORDER'. This indicates that the Bureau of Land Management did not solicit bids from multiple vendors. Such awards are typically justified by specific circumstances, such as the need for specialized services or the continuation of an existing solution. The lack of competition means there was no direct price discovery through a bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government missed an opportunity to leverage market forces for better pricing and potentially more innovative solutions.

Public Impact

The Bureau of Land Management (BLM) is the primary beneficiary, receiving IT services essential for its operations. The contract likely supports various IT functions, including system maintenance, development, or support, crucial for managing public lands. The geographic impact is primarily within Colorado, where the contract was administered. Workforce implications could include the direct employment of personnel by Northrop Grumman to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs.
Long performance period (nearly 7 years) increases risk of cost overruns and performance degradation without strong oversight.
Lack of defined per-unit cost makes value assessment difficult.
Contract type (delivery order) requires understanding the parent contract's terms and conditions.

Positive Signals

Northrop Grumman is a large, established defense and aerospace contractor with significant IT capabilities.
The contract was awarded to support the Bureau of Land Management, a critical government agency.
The contract was administered in Colorado, potentially supporting regional IT needs.

Sector Analysis

This contract falls within the broad IT services sector, a significant area of federal spending. The market for IT services is vast and competitive, encompassing everything from software development and system integration to cybersecurity and cloud computing. Federal agencies are major consumers of these services, often awarding large, long-term contracts. Benchmarking this contract's value would involve comparing its cost and scope to similar IT service contracts awarded by other agencies or within the private sector, considering the specific technologies and support levels involved.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Northrop Grumman, is a large corporation, making it unlikely to be a small business itself. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary contract did not prioritize small business participation, potentially limiting opportunities for smaller firms within the IT services ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily reside with the Bureau of Land Management's contracting officers and program managers. As a non-competitive delivery order, it warrants close monitoring to ensure the services provided align with the stated needs and that costs remain reasonable throughout its extended performance period. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Services Contracts
Department of the Interior IT Spending
Bureau of Land Management IT Procurement
Non-Competitive Contract Awards
Long-Term IT Support Contracts

Risk Flags

Non-competitive award
Long contract duration
Lack of defined per-unit cost
Limited transparency on services and performance

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $11.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IT 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 the Interior (Bureau of Land Management).

What is the total obligated amount?

The obligated amount is $11.7 million.

What is the period of performance?

Start: 2003-10-30. End: 2010-06-30.

What specific IT services were provided under this contract, and how did they align with the Bureau of Land Management's mission?

The provided data indicates the contract was for 'IT SERVICES' with a 'LABOR HOURS' pricing structure. However, the specific nature of these services (e.g., software development, network maintenance, cybersecurity, help desk support) is not detailed. To assess alignment with the Bureau of Land Management's mission, one would need to examine the contract's Statement of Work (SOW). This document typically outlines the required tasks, deliverables, and objectives. Without the SOW, it's difficult to definitively state how these IT services directly supported the BLM's responsibilities in managing public lands, natural resources, and mineral development. The long duration suggests ongoing support rather than a one-time project.

How does the cost per labor hour for Northrop Grumman compare to industry benchmarks for similar IT services during the contract period (2003-2010)?

Determining the exact cost per labor hour is not possible with the provided data, as only the total award amount ($11,746,609.73) and contract type ('LABOR HOURS') are given. To perform this comparison, one would need access to the contract's detailed CLINs (Contract Line Item Numbers) which specify different labor categories and their associated rates. Furthermore, obtaining accurate industry benchmarks for IT labor hours between 2003 and 2010 requires specialized historical data sources. Generally, IT labor costs vary significantly based on skill set, experience, and geographic location. Given Northrop Grumman's status as a large, established contractor, their rates might be expected to be at the higher end compared to smaller, more specialized firms, especially for non-competitive awards where market pressure is absent.

What were the justifications for awarding this contract non-competitively, and were these justifications adequately documented?

The data explicitly states the contract type as 'NON-COMPETITIVE DELIVERY ORDER'. Federal procurement regulations (like the Federal Acquisition Regulation - FAR) allow for non-competitive awards under specific circumstances, such as when only one responsible source exists, or for urgent and compelling reasons. For a delivery order under an existing contract, the justification often relates to the need to continue services seamlessly or if the original contract vehicle was specifically designed for such sole-source task orders. Without access to the contract file, it's impossible to verify the specific justifications documented by the Bureau of Land Management at the time of award. Adequate documentation is crucial to ensure the government received fair value and followed proper procedures.

What performance metrics or quality standards were established for this contract, and how was performance monitored?

The provided summary data does not include information on performance metrics or quality standards. Typically, a contract of this nature and duration would include a Service Level Agreement (SLA) or specific performance standards within the Statement of Work (SOW). These would define measurable outcomes, response times, uptime requirements, or other quality indicators. Monitoring would usually be conducted by the Contracting Officer's Representative (COR) or a designated government technical point of contact. Regular performance reviews, status reports from the contractor, and user feedback would form the basis of this monitoring. The absence of this information in the summary prevents an assessment of whether the contractor met expectations or if the government received the expected level of service quality.

How does the total value of this contract compare to the Bureau of Land Management's overall IT spending during the period of performance?

To compare this contract's value ($11.7 million) to the Bureau of Land Management's (BLM) overall IT spending from 2003 to 2010, one would need access to the BLM's historical IT budget and expenditure data for those fiscal years. This information is often available through agency budget reports, the Federal Procurement Data System (FPDS), or USAspending.gov. Without that comparative data, it's difficult to ascertain the relative significance of this single contract. However, $11.7 million over nearly seven years represents an average annual expenditure of approximately $1.67 million. This figure needs to be contextualized against the BLM's total IT portfolio, which likely includes numerous other contracts for hardware, software, personnel, and other services supporting its vast land management operations across the country.

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc (UEI: 967362331)

Address: 16201 E CENTRETECH PKY, AURORA

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,377,610

Exercised Options: $11,753,231

Current Obligation: $11,746,610

Contract Characteristics

Multi-Year Contract: Yes

Parent Contract

Parent Award PIID: INL05PC04417

IDV Type: IDC

Timeline