Northrop Grumman awarded $12.3M for Joint Knowledge Online Division support, with 729 days duration

Contract Overview

Contract Amount: $12,288,018 ($12.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-05-01

End Date: 2026-04-30

Contract Duration: 729 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: JOINT STAFF, J7, JOINT KNOWLEDGE ONLINE DIVISION (JKO) SUPPORT.

Place of Performance

Location: SUFFOLK, SUFFOLK CITY County, VIRGINIA, 23435

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JOINT STAFF, J7, JOINT KNOWLEDGE ONLINE DIVISION (JKO) SUPPORT. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The contract duration of 729 days (2 years) indicates a medium-term need for these services. 4. The awardee, Northrop Grumman Systems Corporation, is a large, established defense contractor. 5. This contract supports the Joint Staff, J7, Joint Knowledge Online Division, indicating a focus on knowledge management and training for joint military operations. 6. The contract value of approximately $12.3 million is moderate for a defense IT support contract.

Value Assessment

Rating: good

The contract value of $12.3 million for two years of support for a Joint Staff division appears reasonable, especially considering the specialized nature of knowledge management and online platform support. Benchmarking against similar contracts for IT support and knowledge management services within the Department of Defense suggests this pricing is within expected ranges. The Cost Plus Fixed Fee structure, while carrying some risk, is often used for complex services where costs are difficult to predict precisely. Further analysis would require detailed cost breakdowns and comparison to specific service deliverables.

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 and considered. The presence of 3 bidders (as indicated by 'no': 3) suggests a healthy level of competition for this requirement. This competitive process is expected to drive more favorable pricing and service offerings for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government by encouraging multiple companies to bid, potentially lowering costs and improving service quality.

Public Impact

The primary beneficiaries are the members of the Joint Staff, J7, who will receive enhanced support for the Joint Knowledge Online (JKO) platform. Services delivered include support for the JKO platform, which is crucial for disseminating knowledge, training materials, and operational information across joint military forces. The geographic impact is likely nationwide, as the JKO platform serves joint military personnel across various branches and locations. Workforce implications include the potential for Northrop Grumman to utilize its skilled personnel in IT, knowledge management, and platform development, contributing to employment in these sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize profit, requiring robust oversight.
The reliance on a single large contractor for critical knowledge management infrastructure could pose a risk if performance issues arise.
The specific details of the 'Engineering Services' (NA: 541330) are broad and require further clarification to fully assess the scope and potential risks.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
The contractor, Northrop Grumman, is a well-established entity with significant experience in defense contracting.
The contract supports a critical function (JKO) for joint military operations, suggesting alignment with strategic priorities.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting IT and knowledge management functions for a defense agency. The market for defense IT support and knowledge management platforms is substantial, driven by the need for secure, efficient, and accessible information sharing among military branches. Comparable spending benchmarks would include other contracts for enterprise IT solutions, learning management systems, and collaborative platforms within the federal government, particularly the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). As a large contract awarded to a major defense contractor, the primary impact on small businesses would likely be through potential subcontracting opportunities. However, without specific subcontracting plans detailed in the award, it is difficult to assess the extent to which small businesses will benefit from this particular contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy contracting officers and the relevant Joint Staff J7 program managers. The Cost Plus Fixed Fee structure necessitates diligent monitoring of costs incurred by Northrop Grumman to ensure they are reasonable and allocable to the contract. Transparency is typically maintained through contract reporting mechanisms and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Joint Staff Support Services
Department of Defense IT Services
Knowledge Management Systems
Defense Training Platforms
Engineering Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires careful cost monitoring.
Potential for technology obsolescence over the 2-year contract duration.
Scope of 'Engineering Services' is broad and requires detailed understanding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JOINT STAFF, J7, JOINT KNOWLEDGE ONLINE DIVISION (JKO) 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 $12.3 million.

What is the period of performance?

Start: 2024-05-01. End: 2026-04-30.

What is the specific nature of the 'Engineering Services' provided under this contract to the Joint Knowledge Online Division?

The contract description indicates support for the 'JOINT STAFF, J7, JOINT KNOWLEDGE ONLINE DIVISION (JKO) SUPPORT.' While the NAICS code 541330 denotes Engineering Services, the specific engineering tasks related to JKO are not detailed in the provided data. Typically, for a knowledge management platform like JKO, engineering services could encompass software development, system integration, platform maintenance, cybersecurity engineering, network engineering, and potentially the development of new features or functionalities. Understanding the precise engineering activities is crucial for assessing the contract's scope, risks, and value. Without further detail, it's assumed these services are aimed at maintaining, enhancing, and ensuring the operational effectiveness of the JKO platform for its users across the joint force.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for similar IT support services in the DoD?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined, or when there is a high degree of uncertainty in the costs associated with performance, such as in research and development or complex system integration projects. For routine IT support or well-defined service delivery, other contract types like Firm-Fixed-Price (FFP) or Cost Plus Incentive Fee (CPIF) might be more common as they offer better cost control or incentivize performance. The CPFF structure here suggests that the government is willing to reimburse Northrop Grumman for allowable costs plus a predetermined fixed fee, but it places a greater burden on the government to closely monitor costs to prevent overruns. Compared to FFP, CPFF offers more flexibility but less cost certainty for the government. Compared to CPIF, it lacks the direct incentive for the contractor to control costs beyond what is necessary to achieve the fixed fee.

What is Northrop Grumman's track record with similar knowledge management or IT support contracts for the Department of Defense?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various domains, including IT services, C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance), and enterprise solutions for the DoD. They have a history of managing large, complex programs. While specific details on their past performance with the Joint Knowledge Online (JKO) platform are not provided, their general portfolio includes work on large-scale information systems, network infrastructure, and software development for military branches. Their established presence and experience suggest a capacity to handle the technical and logistical demands of supporting a critical knowledge management system like JKO. However, a comprehensive assessment would require reviewing past performance evaluations and any documented issues on comparable contracts.

What are the potential risks associated with the 729-day duration of this contract?

A 729-day (approximately 2-year) duration for an IT support contract like this presents several potential risks. Firstly, technology evolves rapidly; by the end of the contract, the JKO platform and its supporting infrastructure might require significant updates or modernization that were not fully anticipated at the outset. Secondly, long-term reliance on a single contractor, even with competition at award, can lead to vendor lock-in or a decrease in the contractor's incentive to innovate if not managed proactively. Thirdly, changes in military requirements, doctrine, or operational needs could necessitate shifts in the JKO's functionality or scope, potentially creating a mismatch between the contract's deliverables and current needs if contract modifications are not managed effectively. Finally, personnel turnover within the contractor's team over a two-year period could impact institutional knowledge and service continuity.

How does the $12.3 million contract value compare to historical spending on JKO support or similar DoD knowledge management initiatives?

The $12.3 million contract value for two years of support for the Joint Knowledge Online Division represents an average annual spend of approximately $6.15 million. This figure needs to be contextualized within the broader landscape of DoD IT and knowledge management spending. The DoD operates a vast array of IT systems and knowledge-sharing platforms, with total IT spending often in the tens of billions of dollars annually. For a specific division's support, $6.15 million per year is a moderate amount. It suggests a focused effort on maintaining and potentially enhancing a critical but not enterprise-wide platform. To provide a precise comparison, one would need to analyze historical contract data for JKO specifically, or for similar knowledge management and training platforms across different DoD components, considering factors like user base size, complexity of services, and the specific technologies involved.

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: N0018924R3037

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: $48,868,763

Exercised Options: $18,885,912

Current Obligation: $12,288,018

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $3,492,953

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8194

IDV Type: IDC

Timeline