DoD's $27.5M IT Support Contract with Northrop Grumman Raises Questions on Value and Competition
Contract Overview
Contract Amount: $27,501,328 ($27.5M)
Contractor: Northrop Grumman Information Technology Inc
Awarding Agency: Department of Defense
Start Date: 2007-03-16
End Date: 2012-01-31
Contract Duration: 1,782 days
Daily Burn Rate: $15.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: FINANCIAL MGMT DATA&SYSTEMS SUPPORT
Place of Performance
Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $27.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: FINANCIAL MGMT DATA&SYSTEMS SUPPORT Key points: 1. The contract awarded to Northrop Grumman for financial management data and systems support represents a significant investment in IT services. 2. Competition was full and open, suggesting a potentially competitive bidding process, but the final price and value require further scrutiny. 3. Potential risks include cost overruns given the Cost Plus Fixed Fee structure and the long duration of the contract. 4. The sector is IT services, specifically computer systems design, a critical area for defense operations.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee structure can lead to higher costs than fixed-price contracts. Benchmarking against similar IT support contracts is needed to assess if the $27.5 million award represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which theoretically allows for the best price discovery. However, the specific pricing mechanisms and negotiation outcomes are not detailed, making it difficult to fully assess price competitiveness.
Taxpayer Impact: While competition was intended to benefit taxpayers, the Cost Plus Fixed Fee structure and contract duration warrant scrutiny to ensure optimal use of public funds.
Public Impact
Taxpayers funded a significant IT support contract for the Department of Defense. The contract supported critical financial management systems, impacting defense operations. The long contract duration (over 4 years) suggests a sustained need for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure can incentivize higher spending.
- Long contract duration may not reflect evolving technological needs.
- Lack of detailed cost breakdown makes value assessment difficult.
Positive Signals
- Awarded under full and open competition.
- Supports critical defense financial management systems.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design. Spending in this area for defense is substantial, and benchmarks for similar support services are crucial for evaluating cost-effectiveness.
Small Business Impact
The contract was awarded to Northrop Grumman Information Technology Inc. and did not indicate any specific set-asides or participation for small businesses.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Further oversight would involve reviewing performance reports and audits to ensure compliance and value for money.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Long contract duration may not align with technological advancements.
- Limited transparency on specific cost breakdowns and value achieved.
- Lack of small business participation noted.
Tags
computer-systems-design-services, department-of-defense, va, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.5 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. FINANCIAL MGMT DATA&SYSTEMS SUPPORT
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $27.5 million.
What is the period of performance?
Start: 2007-03-16. End: 2012-01-31.
What was the final cost compared to the initial estimate, and how did the Cost Plus Fixed Fee structure impact the final price?
The provided data does not include the final cost or initial estimate, only the awarded amount. The Cost Plus Fixed Fee structure means the contractor is reimbursed for allowable costs plus a fixed fee. This can lead to costs exceeding initial projections if not carefully managed and audited, potentially increasing the final price beyond what a fixed-price contract might yield.
How effectively did the full and open competition translate into competitive pricing for these IT support services?
While 'full and open competition' suggests a broad bidding process, it doesn't guarantee the lowest price. The effectiveness depends on the number of bidders, the clarity of the solicitation, and the negotiation strategy. Without details on the bidding landscape and final negotiated price against benchmarks, it's hard to definitively say if competition yielded optimal pricing.
What specific performance metrics were used to evaluate the contractor's effectiveness throughout the contract's duration?
The provided data does not specify the performance metrics used for this contract. Effective oversight typically involves tracking key performance indicators related to system uptime, response times, issue resolution, and adherence to security protocols. The absence of this information makes it difficult to assess the contractor's actual effectiveness beyond contract completion.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0014006R0010
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 7575 COLSHIRE DRIVE, MC LEAN, VA, 22102
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,478,248
Exercised Options: $28,478,248
Current Obligation: $27,501,328
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-03-16
Current End Date: 2012-01-31
Potential End Date: 2012-01-31 00:00:00
Last Modified: 2016-03-01
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