DoD Spends $46.8M on Custom Computer Programming Services with Northrop Grumman, Awarded via Non-Competitive Contract
Contract Overview
Contract Amount: $46,804,787 ($46.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2003-01-03
End Date: 2005-09-30
Contract Duration: 1,001 days
Daily Burn Rate: $46.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $46.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Significant spending on custom computer programming services highlights reliance on specialized IT solutions. 2. The contract's non-competitive nature raises questions about potential price inflation and lack of market pressure. 3. A Cost Plus Fixed Fee contract type can lead to cost overruns if not closely monitored. 4. The long duration of the contract (over 3 years) suggests a complex, ongoing need for these services.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, especially without strong competition, can be prone to higher costs than fixed-price contracts. Without a competitive benchmark, assessing the value for money is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government as there is no market pressure to drive down prices.
Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these custom computer programming services.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract suggests a sustained demand for these specific services within the Department of Defense. Reliance on a single contractor for critical services can create vendor lock-in and reduce flexibility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Non-competitive award
- Cost-plus contract type
- Lack of price transparency
Positive Signals
- Addresses a specific need for custom programming
- Long-term engagement suggests critical function
Sector Analysis
This contract falls within the Information Technology sector, specifically custom computer programming. Spending benchmarks for this category vary widely based on complexity and duration, but non-competitive awards often exceed market rates.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large business. There is no indication that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The Cost Plus Fixed Fee structure necessitates robust oversight from the Defense Contract Management Agency (DCMA) to ensure costs are reasonable and allocable. The long duration and non-competitive nature amplify the need for diligent monitoring.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited price transparency
- Vendor lock-in risk
Tags
custom-computer-programming-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $46.8 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 $46.8 million.
What is the period of performance?
Start: 2003-01-03. End: 2005-09-30.
What specific custom computer programming services were procured, and why was a competitive process deemed unsuitable?
The data indicates 'Custom Computer Programming Services' (NAICS 541511) were procured. The reason for a non-competitive award is not provided but could stem from unique technical requirements, proprietary software, or urgent needs. Further investigation into the justification for sole-sourcing is warranted to ensure fair pricing and avoid potential waste.
How were costs controlled and justified under the Cost Plus Fixed Fee structure for this $46.8M contract?
With a Cost Plus Fixed Fee (CPFF) contract, the government pays the contractor's allowable costs plus a fixed fee representing profit. Effective oversight by DCMA is crucial to scrutinize costs, ensure they are reasonable and allocable to the contract, and prevent unnecessary expenditures. The fixed fee should incentivize efficiency, but the overall cost is still subject to the actual expenses incurred.
What is the long-term strategic implication of awarding such a large contract non-competitively for critical IT services?
Awarding a significant contract non-competitively can create a dependency on a single vendor, potentially stifling innovation and competition in the long run. It may also set a precedent for future procurements. The DoD should regularly reassess the need for these services and explore competitive alternatives to ensure optimal value and technological advancement.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2003-01-03
Current End Date: 2005-09-30
Potential End Date: 2005-09-30 00:00:00
Last Modified: 2022-07-12
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