DoD's $205M Northrop Grumman Contract for BAMS-D O&M Lacks Competition, Raises Value Concerns
Contract Overview
Contract Amount: $204,978,703 ($205.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-06-11
End Date: 2023-02-28
Contract Duration: 1,723 days
Daily Burn Rate: $119.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: BAMS-D OPERATION AND MAINTENANCE SUPPORT
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $205.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: BAMS-D OPERATION AND MAINTENANCE SUPPORT Key points: 1. Significant spending on a single contract with limited transparency. 2. Northrop Grumman is the sole provider, indicating a lack of market competition. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, making direct sector benchmarks difficult.
Value Assessment
Rating: questionable
The $205M award for operations and maintenance support lacks clear benchmarks due to its broad service category. The Cost Plus Fixed Fee structure, while common for complex services, offers less incentive for cost efficiency compared to fixed-price contracts, potentially impacting overall value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and negotiation leverage, as there was no competitive pressure to drive down costs or improve service offerings.
Taxpayer Impact: The lack of competition suggests taxpayers may be paying a premium for these services, as the government did not explore potentially more cost-effective alternatives.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long duration (over 4 years) and substantial value raise questions about long-term planning and cost control. Lack of competition limits opportunities for innovative solutions from other vendors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
- Broad service category limits benchmarking
Positive Signals
- Contract awarded to a known entity
- Services are essential for operations
Sector Analysis
This contract falls under 'All Other Professional, Scientific, and Technical Services,' a broad category making direct spending benchmarks challenging. Defense spending in this area often involves complex, specialized support services where competition can be limited.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation in this specific award, suggesting missed opportunities for small business engagement.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and effective service delivery. Regular performance reviews and justification for continued sole-source awards are crucial for accountability.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency on service details
- No clear small business participation
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 $205.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. BAMS-D OPERATION 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 $205.0 million.
What is the period of performance?
Start: 2018-06-11. End: 2023-02-28.
What specific services are included under 'BAMS-D Operation and Maintenance Support' to justify the $205M cost without competition?
The specific services are not detailed in the provided data, but 'BAMS-D Operation and Maintenance Support' likely encompasses a range of technical, logistical, and potentially software-related maintenance for a Department of the Navy system. Without further details, it's difficult to assess if the cost is justified or if alternative, more competitive solutions exist.
What is the risk of cost escalation with a Cost Plus Fixed Fee contract for this service, and how is it being mitigated?
Cost Plus Fixed Fee contracts carry a risk of cost escalation as the contractor is reimbursed for allowable costs plus a fixed fee. Mitigation strategies typically involve stringent cost accounting standards, detailed audits, and clear performance metrics. The government must actively monitor expenditures and ensure all costs are reasonable and allocable to the contract.
How effective has Northrop Grumman been in delivering BAMS-D O&M support, and what metrics are used to measure this effectiveness?
Effectiveness metrics are not provided in the data. However, the government's continued award of this contract, even if sole-source, suggests a level of satisfaction with the delivered support. Formal performance evaluations and quality assurance surveillance plans are typically employed to measure contractor effectiveness.
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: N0001917R0060
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
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: $210,026,373
Exercised Options: $209,776,373
Current Obligation: $204,978,703
Actual Outlays: $35,687,617
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $83,270
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-06-11
Current End Date: 2023-02-28
Potential End Date: 2023-02-28 00:00:00
Last Modified: 2024-07-30
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