DoD's Navy awards $30.2M for Software Support Services, with Northrop Grumman as sole source
Contract Overview
Contract Amount: $30,222,127 ($30.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2022-03-28
End Date: 2024-06-28
Contract Duration: 823 days
Daily Burn Rate: $36.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SOFTWARE SUPPORT SERVICES - O&M
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $30.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SOFTWARE SUPPORT SERVICES - O&M Key points: 1. Significant contract value for essential software maintenance and operations. 2. Sole-source award to Northrop Grumman raises questions about competition. 3. Potential risk of inflated costs due to lack of competitive bidding. 4. IT sector spending on sustainment services is a critical area for government operations.
Value Assessment
Rating: questionable
The $30.2 million award for software support services appears high given it was not competed. Benchmarking against similar O&M contracts for software sustainment would be necessary to determine true value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no competition. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these critical software support services.
Public Impact
Ensures continued operation of vital search, detection, and navigation systems. Supports the Department of the Navy's operational readiness. Potential for cost overruns impacts overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Essential service for operational readiness
- Long-term support contract
Sector Analysis
This contract falls within the IT sector, specifically for the maintenance and operation of complex software systems. Government spending on IT sustainment is substantial, and ensuring competitive pricing is crucial.
Small Business Impact
The data indicates that small businesses were not involved in this specific contract award, as it was a sole-source award to a large corporation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is providing services at a fair and reasonable price, and that future competition is explored.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type may incentivize higher costs.
- Lack of transparency in pricing due to no competition.
- Potential for vendor lock-in.
Tags
search-detection-navigation-guidance-aer, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SOFTWARE SUPPORT SERVICES - O&M
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $30.2 million.
What is the period of performance?
Start: 2022-03-28. End: 2024-06-28.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, without a competitive process, it is imperative for the agency to conduct rigorous price analysis and cost audits to ensure the government is not overpaying. Regular reviews and market research should be performed to identify opportunities for future competition.
How does the cost-plus fixed fee structure impact the contractor's incentive to control costs?
Cost-plus fixed fee contracts can incentivize contractors to incur costs, as a portion of their profit is tied to the overhead and indirect costs. While the fixed fee provides some incentive for efficiency, it may not be as strong as in fixed-price contracts. This structure requires diligent oversight from the government to monitor and control allowable costs.
What is the long-term strategy for ensuring cost-effective software support and modernization?
The long-term strategy should involve a phased approach to competition, potentially breaking down the support into smaller, more manageable contracts or exploring alternative solutions. Investing in in-house expertise for software sustainment and developing clear roadmaps for modernization can reduce reliance on sole-source providers and drive down costs over time.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
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: $34,285,033
Exercised Options: $30,222,127
Current Obligation: $30,222,127
Actual Outlays: $25,283,030
Subaward Activity
Number of Subawards: 38
Total Subaward Amount: $15,115,270
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6785420G0032
IDV Type: BOA
Timeline
Start Date: 2022-03-28
Current End Date: 2024-06-28
Potential End Date: 2024-06-28 00:00:00
Last Modified: 2024-05-23
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