DoD's $137M BAMS-D/GHMD Contract Awarded to Northrop Grumman Raises Oversight Questions
Contract Overview
Contract Amount: $136,936,963 ($136.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2012-09-01
End Date: 2020-03-31
Contract Duration: 2,768 days
Daily Burn Rate: $49.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: BAMS-D/GHMD OPERATIONS AND MAINTENANCE SUPPORT
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $136.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: BAMS-D/GHMD OPERATIONS AND MAINTENANCE SUPPORT Key points: 1. Significant contract value of $137M for operations and maintenance support. 2. Sole incumbent contractor, Northrop Grumman, raises concerns about competition. 3. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Services fall under 'All Other Professional, Scientific, and Technical Services' (NAICS 541990).
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while common for complex services, can lead to higher costs if not tightly managed. Benchmarking against similar O&M contracts for DoD systems is difficult without more specific service details.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for these essential operations and maintenance services.
Public Impact
Taxpayers may be overpaying due to lack of competitive bidding. Potential for cost inefficiencies given the contract type and sole-source nature. Lack of transparency in pricing due to non-competitive award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Long contract duration (2012-2020)
Positive Signals
- Incumbent contractor has established expertise
- Services are critical for DoD operations
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically IT and defense-related operations and maintenance. Spending in this area is substantial across the federal government, with a strong emphasis on ensuring competitive pricing for complex support services.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large corporation like Northrop Grumman suggests a focus on established, large-scale service providers.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure fair pricing and efficient service delivery. Robust justification for the lack of competition should be readily available and scrutinized.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for cost overruns (CPFF)
- Limited transparency in pricing
- Long contract duration without re-competition
- No small business participation evident
Tags
all-other-professional-scientific-and-te, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $136.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. BAMS-D/GHMD 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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $136.9 million.
What is the period of performance?
Start: 2012-09-01. End: 2020-03-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, critical urgency, or a lack of viable alternatives. Without specific documentation, it's difficult to assess if alternative competitive strategies were thoroughly explored. This lack of competition is a primary concern for ensuring value for taxpayer money.
How does the Cost Plus Fixed Fee structure impact cost control and contractor performance in this specific contract?
Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to achieve a higher fixed fee, especially if oversight is lax. For this contract, the long duration and lack of competition amplify this risk. Effective oversight mechanisms are crucial to monitor costs and ensure performance targets are met efficiently.
What is the long-term strategy for ensuring competitive pricing for these BAMS-D/GHMD operations and maintenance services?
The long-term strategy should involve transitioning towards a competitive procurement process for these services. This could include breaking down the requirement into smaller, more manageable components or exploring innovative contracting methods to encourage new entrants and drive down costs over time.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001912R1002
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: $144,577,258
Exercised Options: $144,577,258
Current Obligation: $136,936,963
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $34,984
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-09-01
Current End Date: 2020-03-31
Potential End Date: 2020-03-31 00:00:00
Last Modified: 2020-09-02
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