DoD's $63.5M GHMD/BAMS-D O&M Contract Awarded to Northrop Grumman Raises Oversight Questions
Contract Overview
Contract Amount: $63,486,353 ($63.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2010-07-28
End Date: 2012-08-31
Contract Duration: 765 days
Daily Burn Rate: $83.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: GHMD/BAMS-D OPERATIONS AND MAINTENANCE SUPPORT
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $63.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GHMD/BAMS-D OPERATIONS AND MAINTENANCE SUPPORT Key points: 1. Significant contract value for specialized technical services. 2. Sole-source award limits competitive pricing and innovation. 3. Potential for cost overruns due to cost-plus contract type. 4. Long-term contract duration warrants close monitoring.
Value Assessment
Rating: questionable
The contract's cost-plus fixed fee structure, with a total award of $63.5 million, necessitates careful scrutiny to ensure value for money. Benchmarking against similar O&M support contracts is crucial, especially given the lack of competition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach bypasses the competitive bidding process, potentially leading to higher prices and reduced opportunities for other qualified vendors to offer their services.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these services, as market forces are not engaged to drive down costs.
Public Impact
Citizens may question the justification for a sole-source award on a contract of this magnitude. The long duration of the contract (over two years) means sustained taxpayer investment. Transparency in the performance metrics and cost controls will be vital for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Long contract duration
Positive Signals
- Established contractor
- Specific technical services required
Sector Analysis
This contract falls under 'All Other Professional, Scientific, and Technical Services,' a broad category. Benchmarking within this specific niche of defense operations and maintenance support is challenging without more granular data on comparable contracts.
Small Business Impact
The data indicates this contract was awarded to a large corporation, Northrop Grumman Systems Corporation. There is no information suggesting opportunities for small businesses were included or considered in this sole-source award.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Defense Contract Management Agency to ensure cost reasonableness, performance standards, and adherence to contract terms. Regular audits and performance reviews are critical.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency on justification
- Contractor incentive for higher costs
- Long-term commitment without market validation
Tags
all-other-professional-scientific-and-te, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GHMD/BAMS-D OPERATIONS AND MAINTENANCE SUPPORT
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $63.5 million.
What is the period of performance?
Start: 2010-07-28. End: 2012-08-31.
What was the justification for awarding this contract on a sole-source basis rather than through full and open competition?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or situations where only one source can fulfill the requirement. Without specific documentation, it's difficult to ascertain the precise rationale. However, the absence of competition raises concerns about potential missed savings and innovation that a competitive process might have yielded.
What are the primary risks associated with the cost-plus fixed fee contract type for this specific service?
Cost-plus fixed fee contracts carry inherent risks of cost overruns, as the contractor is reimbursed for allowable costs plus a predetermined fee. This can incentivize less efficient cost management. For GHMD/BAMS-D O&M, risks include potential scope creep, inadequate cost controls by the contractor, and the government bearing the brunt of unexpected expenses, potentially exceeding the initial budget.
How effectively is the Defense Contract Management Agency overseeing this contract to ensure value and prevent waste?
Effective oversight is paramount given the sole-source, cost-plus nature. The agency must rigorously audit costs, monitor performance against defined metrics, and ensure the contractor is meeting all contractual obligations efficiently. Transparency in reporting and proactive risk mitigation are key indicators of effective oversight in preventing waste and ensuring taxpayer value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
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
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $65,310,217
Exercised Options: $65,310,217
Current Obligation: $63,486,353
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $60,123,986
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-07-28
Current End Date: 2012-08-31
Potential End Date: 2012-08-31 00:00:00
Last Modified: 2020-06-23
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