DoD's $38.3M JKO O&M contract awarded to Northrop Grumman for engineering services

Contract Overview

Contract Amount: $38,268,995 ($38.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-07-26

End Date: 2024-04-30

Contract Duration: 1,740 days

Daily Burn Rate: $22.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JKO O&M BASE PERIOD

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JKO O&M BASE PERIOD Key points: 1. Contract awarded for essential operational and maintenance services, indicating a need for ongoing support. 2. The contract's duration of 1740 days suggests a long-term requirement for these engineering services. 3. Awarded to a single, large contractor, raising questions about potential competition limitations. 4. The cost-plus-fixed-fee pricing structure requires careful monitoring to ensure cost control. 5. Services are categorized under Engineering Services, a broad field with potential for cost variability. 6. The contract is a delivery order under a larger agreement, suggesting a phased approach to funding and execution.

Value Assessment

Rating: fair

Benchmarking the value of this specific $38.3 million contract is challenging without direct comparisons for the 'JKO O&M BASE PERIOD' services. The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed diligently, as the contractor is reimbursed for all allowable costs plus a fixed fee. While the fixed fee provides some predictability, the overall cost is variable. Further analysis would require understanding the scope of work and comparing the fixed fee percentage and total costs to similar engineering service contracts within the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the data shows it was awarded as a delivery order, and the number of bids received for this specific order is not provided. The fact that Northrop Grumman Systems Corporation was the awardee suggests they were the most competitive offeror at the time of award. The level of competition for the parent contract is key to understanding price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. However, the specific number of bids for this delivery order would provide a clearer picture of the competitive pressure exerted.

Public Impact

The Department of Defense benefits from the continued operation and maintenance of its systems, ensuring readiness. Engineering services are delivered to support critical defense operations, likely impacting military personnel and readiness. The geographic impact is primarily within the Department of Defense's operational footprint, potentially worldwide. Workforce implications include the employment of engineers and technical staff by Northrop Grumman to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize higher spending if not rigorously overseen.
Lack of specific bid count for this delivery order limits assessment of competitive pressure.
The broad nature of 'Engineering Services' could mask scope creep and associated cost increases.

Positive Signals

Awarded under full and open competition, suggesting a robust initial bidding process.
The contract is a delivery order, implying it's part of a larger, potentially well-established framework.
Northrop Grumman is a major defense contractor with a track record in complex systems.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the defense industrial base. The market for defense engineering services is substantial, with significant government spending allocated annually. This contract likely supports the operational and maintenance needs of a specific defense program or system, contributing to the overall efficiency and effectiveness of military operations. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the DoD.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting plans for small businesses. As a large contract awarded to a major defense contractor, there is a potential for small business participation through subcontracting, but this is not guaranteed by the provided information. Further investigation into Northrop Grumman's subcontracting practices would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are inherent in the CPFF contract type, requiring detailed cost reporting and justification. Transparency is generally facilitated through contract databases like FPDS, although specific performance metrics and detailed cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) contracts
Logistics and Maintenance Support Services
Department of Defense IT Services
Engineering and Technical Services

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
Potential for cost escalation due to the nature of CPFF contracts.
Limited insight into the specific number of bidders for this delivery order.
Broad 'Engineering Services' category may obscure specific performance details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JKO O&M BASE PERIOD

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 $38.3 million.

What is the period of performance?

Start: 2019-07-26. End: 2024-04-30.

What is the specific scope of 'JKO O&M BASE PERIOD' services provided under this contract?

The provided data does not detail the specific 'JKO O&M BASE PERIOD' services. 'JKO' likely refers to the Joint Knowledge Online platform, a Department of Defense training and education system. 'O&M' stands for Operations and Maintenance, suggesting the contract covers the upkeep, support, and running of the JKO platform. This could include software maintenance, system administration, user support, infrastructure management, and potentially content updates or integration services. The 'BASE PERIOD' indicates this is the initial term of the contract, excluding any option periods. A more precise understanding would require reviewing the contract's Statement of Work (SOW).

How does the total contract value of $38.3 million compare to similar engineering service contracts for defense platforms?

Comparing the $38.3 million value requires context on the specific services rendered and the platform supported. Engineering services for defense platforms can range widely in cost depending on complexity, duration, and criticality. For large-scale platform sustainment or development, $38.3 million over approximately 4.7 years (1740 days) might be considered moderate. However, if 'JKO O&M BASE PERIOD' refers to a less complex system or primarily software maintenance, this value could be on the higher side. Benchmarking against contracts for similar IT infrastructure O&M or specialized engineering support within DoD would provide a more accurate comparison.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this acquisition?

The primary risk with a CPFF contract is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. While the fixed fee provides the contractor with a profit incentive, the total cost to the government is not fixed and can escalate if costs are higher than anticipated. This structure can potentially incentivize the contractor to incur more costs, as their fee remains constant. Effective risk mitigation requires robust government oversight, detailed cost monitoring, stringent auditing of incurred costs, and a well-defined scope of work to prevent scope creep. The government bears the risk of cost overruns beyond the initial estimates.

What is Northrop Grumman Systems Corporation's track record with similar DoD engineering and O&M contracts?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in providing a wide array of engineering, technology, and operational support services to the Department of Defense. They have a long history of managing complex programs involving aircraft, space systems, C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance), and IT infrastructure. Their track record includes numerous large-scale contracts for system development, integration, sustainment, and maintenance. While specific performance data for this particular 'JKO O&M BASE PERIOD' contract isn't detailed here, their general profile suggests they possess the capability and experience to handle such requirements, though oversight remains crucial.

How has spending on Engineering Services within the Department of Defense trended over the past five years?

Spending on Engineering Services within the Department of Defense has generally been substantial and relatively consistent, reflecting the ongoing need for technical expertise across various platforms and systems. While precise figures fluctuate annually based on budget allocations, modernization priorities, and operational tempo, the overall trend indicates a sustained high level of investment. Factors influencing this trend include the lifecycle management of existing weapon systems, the development of new technologies, cybersecurity requirements, and the need for specialized support for complex IT infrastructure. Analyzing specific DoD budget documents and contract spending reports would reveal detailed year-over-year trends and shifts in allocation towards different types of engineering services.

What is the significance of this contract being a 'Delivery Order' rather than a standalone contract?

This contract being a 'Delivery Order' signifies that it is a task or order placed against a previously awarded indefinite-delivery, indefinite-quantity (IDIQ) or other type of basic contract. This structure allows the government to procure services incrementally as needed, rather than awarding a single, large contract upfront. For taxpayers, this can offer flexibility and potentially better pricing if the basic contract was competitively awarded. It implies that the 'JKO O&M BASE PERIOD' services are part of a larger framework agreement, potentially covering a broader range of services or a longer period, with this order representing a specific tranche of work and funding.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0018918RZ008

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

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

Financial Breakdown

Contract Ceiling: $51,672,819

Exercised Options: $51,351,112

Current Obligation: $38,268,995

Actual Outlays: $9,788,701

Subaward Activity

Number of Subawards: 342

Total Subaward Amount: $419,324,367

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018919DZ006

IDV Type: IDC

Timeline