DoD's $22.6M Engineering Services Contract Awarded to Northrop Grumman for Naval Support

Contract Overview

Contract Amount: $22,613,346 ($22.6M)

Contractor: Northrop Grumman Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-04-04

End Date: 2014-12-31

Contract Duration: 1,001 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TSER COST SERVICES - BASE PERIOD

Place of Performance

Location: WHITE SANDS MISSILE RANGE, DONA ANA County, NEW MEXICO, 88002

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: TSER COST SERVICES - BASE PERIOD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The base period cost of $22.6 million for engineering services indicates a significant investment in specialized technical support. 4. The contract duration of 1001 days (approximately 2.7 years) suggests a medium-term need for these services. 5. The award was a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The contractor, Northrop Grumman Technical Services, Inc., is a major defense contractor with extensive experience. 7. The contract is for engineering services, a critical component for complex defense systems and operations.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The fixed fee component provides some cost certainty for the contractor's profit, but the cost-reimbursement aspect means the government bears the risk of actual costs incurred. Comparing this to similar engineering services contracts for naval support would require access to more granular data on scope and deliverables. However, the base period cost of over $22 million suggests a substantial service requirement.

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 multiple bidders in such a scenario typically fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the 'full and open' designation is a positive sign for the procurement process.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by driving down costs and ensuring the government receives the best value for its investment in engineering services.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its operations and systems. This contract likely supports the development, maintenance, or enhancement of naval technologies and infrastructure. The services provided contribute to the overall readiness and effectiveness of naval forces. The geographic impact is likely concentrated around naval facilities or operational areas, with potential implications for the New Mexico region where the contractor may have operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost overruns if not meticulously managed and monitored.
The lack of specific performance metrics in the provided data makes it difficult to assess the efficiency and effectiveness of the services rendered.
The reliance on a single large contractor for critical engineering services could pose a risk if the contractor faces financial or operational difficulties.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
Northrop Grumman Technical Services, Inc. is a well-established and experienced defense contractor, implying a lower risk of contractor failure.
The contract addresses a clear need for engineering services within the Department of Defense, indicating strategic alignment.

Sector Analysis

Engineering services are a critical component of the defense sector, encompassing a wide range of activities from research and development to system design, integration, and lifecycle support. The market for defense engineering services is substantial, driven by the continuous need for technological advancement and platform sustainment. This contract fits within the broader category of professional, scientific, and technical services, a significant segment of federal spending. Comparable spending benchmarks would typically be found within the Department of Defense's overall budget for engineering and technical support across various platforms and agencies.

Small Business Impact

The provided data indicates that small business participation (sb) was false and there was no small business set-aside (ss) for this contract. This suggests that the contract was not specifically targeted towards small businesses, and larger prime contractors were likely the primary bidders. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in this award information. The impact on the small business ecosystem would depend on the extent to which Northrop Grumman utilizes small business subcontractors for specialized support.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined within the contract's terms and conditions, including reporting requirements and performance standards. Transparency is generally facilitated through contract award databases like FPDS-NG, which provide public access to contract details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Cost Plus Fixed Fee Contracts
Defense Logistics Agency Support Contracts
Aerospace and Defense Engineering Services

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
Lack of specific performance metrics makes value assessment difficult.
Potential for contractor performance issues impacting critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. TSER COST SERVICES - BASE PERIOD

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN TECHNICAL SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2012-04-04. End: 2014-12-31.

What is the historical spending pattern for engineering services by the Department of the Navy with Northrop Grumman Technical Services, Inc.?

Analyzing historical spending patterns requires access to a comprehensive database of past contracts. Without specific historical data, it's difficult to provide a precise spending trend. However, Northrop Grumman is a major defense contractor, and it is common for such companies to have multiple, ongoing contracts with various branches of the Department of Defense, including the Navy, for engineering and technical services. The $22.6 million base period cost for this specific contract suggests a significant, but not necessarily unprecedented, level of investment. A deeper dive into historical contract awards would reveal the frequency, value, and duration of previous engagements between the Navy and Northrop Grumman for similar services, allowing for a more robust assessment of spending patterns and potential trends.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to other engineering service contracts within the Navy?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense procurement, particularly for services where the scope of work may evolve or is difficult to define precisely upfront. In a CPFF contract, the government reimburses the contractor for allowable costs and pays a predetermined fixed fee, which represents the contractor's profit. This structure aims to provide some cost control for the government compared to pure cost-reimbursement contracts, while still allowing flexibility. Compared to other engineering service contracts, CPFF is often used when the level of effort is uncertain or when innovation is required. Fixed-price contracts might be preferred for well-defined scopes, while other cost-reimbursement variations exist for different risk-sharing scenarios. The Navy utilizes a mix of contract types depending on the specific program requirements and risk tolerance.

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

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for engineering services contracts, KPIs would be established within the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These could include metrics related to technical performance (e.g., system reliability, design accuracy), schedule adherence (e.g., meeting project milestones), cost control (e.g., staying within budget projections for specific tasks), quality of deliverables (e.g., number of design revisions required, adherence to standards), and responsiveness to government requests. The effectiveness of the CPFF structure is often tied to how well these KPIs are defined, monitored, and enforced by the government's contracting officer's representative (COR).

What is the potential impact of this contract on the small business ecosystem in New Mexico?

The direct impact of this specific contract on the small business ecosystem in New Mexico is likely limited, as it was awarded to Northrop Grumman Technical Services, Inc., a large prime contractor, and did not involve a small business set-aside. However, the indirect impact could be positive if Northrop Grumman utilizes small businesses as subcontractors for specialized engineering, manufacturing, or support services within New Mexico. The extent of this subcontracting would depend on the company's subcontracting plan and the availability of qualified small businesses in the region. Without specific subcontracting data, it's difficult to quantify this impact, but large prime contractors often play a role in developing the capabilities of smaller firms through these arrangements.

How does the $22.6 million base period cost compare to the total potential value of the contract, considering options?

The provided data only specifies the 'TSER COST SERVICES - BASE PERIOD' at $22,613,346.31. It does not include information about potential option periods or the total contract value if all options were exercised. Contracts, especially those awarded as delivery orders under IDIQ vehicles, often have base periods followed by multiple option periods that can extend the contract's duration and increase its total value significantly. Without data on option periods, it's impossible to determine the total potential value and how the base period cost relates to it. The 'br' value of 22591 might represent a broader contract ceiling or obligation, but its exact meaning in relation to the base period cost is unclear from the provided snippet.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $22,613,346

Exercised Options: $22,613,346

Current Obligation: $22,613,346

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9124Q08D0801

IDV Type: IDC

Timeline