DoD's $142M Engineering Services Contract with Northrop Grumman: A Decade of Sole-Source Award
Contract Overview
Contract Amount: $142,423,035 ($142.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2003-03-24
End Date: 2016-09-30
Contract Duration: 4,939 days
Daily Burn Rate: $28.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94086
Plain-Language Summary
Department of Defense obligated $142.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Significant expenditure of $142M over 13 years on engineering services. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Long contract duration (over 13 years) may indicate a need for ongoing, specialized services. 4. The 'Engineering Services' sector is critical for defense capabilities, but requires careful cost management.
Value Assessment
Rating: questionable
The total award value of $142M over nearly 14 years is substantial. Without competitive bids, it's difficult to assess if this represents fair market value for engineering services. Benchmarking against similar sole-source contracts or industry standards would be necessary.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis ('NOT COMPETED'), indicating no other vendors were considered. This significantly limits price discovery and may lead to higher costs compared to a competitive procurement process.
Taxpayer Impact: The lack of competition for a contract of this magnitude suggests taxpayers may not have received the best possible price, potentially leading to overspending.
Public Impact
Taxpayers funded a significant contract over an extended period without competitive bidding. The Department of Defense relied on a single contractor for critical engineering services. The long duration and sole-source nature of the contract warrant scrutiny for potential inefficiencies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- High total award value
Positive Signals
- Contract awarded to a major defense contractor
- Services likely critical to defense operations
Sector Analysis
Engineering services are vital for the Department of Defense, encompassing design, development, and testing of complex systems. Spending in this sector can be high, especially for specialized, long-term projects, but competitive bidding is crucial for cost control.
Small Business Impact
The data indicates this contract was awarded to a large corporation, Northrop Grumman Systems Corporation. There is no indication that small businesses were involved in this specific sole-source procurement.
Oversight & Accountability
The sole-source nature of this contract suggests a potential gap in competitive oversight. Further review would be needed to understand the justification for not competing the award and to ensure adequate performance monitoring.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may have led to higher costs.
- Extended contract duration without re-competition raises concerns about market responsiveness.
- Potential for cost overruns in a sole-source, cost-plus contract.
- Limited transparency into the procurement decision.
Tags
engineering-services, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $142.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.
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 $142.4 million.
What is the period of performance?
Start: 2003-03-24. End: 2016-09-30.
What was the specific justification for awarding this engineering services contract on a sole-source basis?
The justification for a sole-source award typically involves factors like unique capabilities, urgent needs, or the unavailability of other sources. For this contract, the specific rationale would need to be documented by the Department of Defense. Without this documentation, it's impossible to fully assess the necessity of bypassing the competitive process.
How did the cost of this sole-source contract compare to potential costs if it had been competitively bid?
It is inherently difficult to quantify the exact difference without a competitive benchmark. However, sole-source contracts generally carry a higher risk of inflated costs due to the absence of market pressure. Analysis of the contract's cost growth and profit margins over its lifespan could provide some insight, but a true comparison would require a hypothetical competitive scenario.
What performance metrics or deliverables were established for this extensive, sole-source engineering services contract?
Given the contract's duration and sole-source nature, robust performance metrics and clear deliverables would be essential for accountability. The specific metrics would depend on the engineering services provided. Regular reviews and audits by the Defense Contract Management Agency would be expected to ensure Northrop Grumman met its contractual obligations effectively.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 401 E HENDY AVE, SUNNYVALE, CA, 94088
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2003-03-24
Current End Date: 2016-09-30
Potential End Date: 2016-09-30 00:00:00
Last Modified: 2022-03-17
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