Northrop Grumman awarded $18.7M contract for telecommunications services, highlighting a competitive procurement

Contract Overview

Contract Amount: $18,713,722 ($18.7M)

Contractor: Northrop Grumman Information Technology Inc

Awarding Agency: Department of Defense

Start Date: 2005-04-08

End Date: 2009-05-29

Contract Duration: 1,512 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200511!000325!5700!FA8773!38EIG/PK !FA877104D0004 !A!N! !Y!TF03 ! !20050408!20061229!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000018965928!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !517910!E! !5!B!M! !A! !20200930!B!A!Y!N!Z!A!N!J!2!005!B! !Z!N!Z! ! !Y!C!N! ! ! !D!D!A!A!000!A!B!Y! ! ! ! !5700! !0001! !

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22101

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC for work described as: 200511!000325!5700!FA8773!38EIG/PK !FA877104D0004 !A!N! !Y!TF03 ! !20050408!20061229!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!73800!017!40!TINKER AFB !CANA… Key points: 1. Contract value of $18.7M suggests a significant investment in telecommunications infrastructure. 2. Full and open competition indicates a healthy market with multiple potential bidders. 3. The contract duration of 1512 days points to a long-term need for these services. 4. Award to Northrop Grumman, a major defense contractor, suggests a focus on critical infrastructure. 5. The 'Other ADP & Telecommunication Services' category indicates a broad scope of potential services. 6. The contract's Virginia location may align with significant military or government installations.

Value Assessment

Rating: good

The contract value of $18.7 million for telecommunications services over approximately four years appears reasonable given the scope and the contractor's expertise. Benchmarking against similar large-scale telecommunications contracts for government agencies would provide a more precise value-for-money assessment. However, the fixed-price nature of the contract shifts some risk to the contractor, which can be favorable for the government if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bidders suggests a competitive environment, which typically drives better pricing and service offerings for the government. This level of competition is a positive sign for price discovery and ensures the government is likely receiving a fair market price.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which generally leads to lower costs and higher quality services compared to sole-source or limited competition contracts.

Public Impact

The primary beneficiaries are likely Department of Defense agencies requiring robust telecommunications infrastructure. Services delivered could include network management, data transmission, and communication equipment support. The geographic impact is centered around Tinker AFB in Oklahoma, suggesting operational support for that installation. Workforce implications may involve specialized technical roles for installation, maintenance, and support of telecommunications systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single large contractor could reduce future competitive opportunities if not managed proactively.
Scope creep could increase costs if not strictly managed within the defined service parameters.

Positive Signals

Full and open competition ensures a broad base of potential providers.
Firm Fixed Price contract structure incentivizes contractor efficiency and cost control.
Award to an established contractor like Northrop Grumman suggests a high likelihood of successful performance.
The contract's duration indicates a stable, long-term requirement, allowing for strategic planning.

Sector Analysis

This contract falls within the Information Technology and Telecommunications sector, specifically related to wired telecommunications carriers. The market for government telecommunications services is substantial, driven by the need for secure and reliable communication networks for defense and civilian agencies. Comparable spending benchmarks would involve analyzing other large-scale network infrastructure and service contracts awarded by the Department of Defense and other federal agencies.

Small Business Impact

While this contract was awarded to a large prime contractor, Northrop Grumman, there is no explicit indication of a small business set-aside. However, large prime contractors are often required to meet subcontracting goals for small businesses. The extent to which small businesses will participate in fulfilling this contract through subcontracting will be a key factor in assessing its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Air Force. Accountability measures are embedded in the firm-fixed-price structure, which incentivizes the contractor to meet performance standards within the agreed-upon budget. Transparency is generally maintained through contract databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Defense Information Systems Network (DISN)
General Services Administration (GSA) Federal Telecommunications Services
Air Force Network Integration Center (AFNIC) contracts
Other telecommunications support contracts for military bases

Risk Flags

Contract awarded to a single large prime contractor.
Potential for vendor lock-in.
Scope definition and management critical for fixed-price contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to NORTHROP GRUMMAN INFORMATION TECHNOLOGY INC. 200511!000325!5700!FA8773!38EIG/PK !FA877104D0004 !A!N! !Y!TF03 ! !20050408!20061229!064677243!016435559!016435559!N!NORTHROP GRUMMAN INFORMATION T!7575 COLSHIRE DRIVE !MCLEAN !VA!22102!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000018965928!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !517910!E! !5!B!M! !A! !202

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2005-04-08. End: 2009-05-29.

What is Northrop Grumman's track record with similar telecommunications contracts for the Department of Defense?

Northrop Grumman Information Technology, Inc. (now part of Northrop Grumman Corporation) has a long history of providing IT and telecommunications services to the Department of Defense and other federal agencies. They have been involved in numerous large-scale network modernization, sustainment, and operational support contracts. Their experience typically includes managing complex communication systems, ensuring cybersecurity, and providing end-to-end telecommunications solutions. Past performance data, often available through contract databases and agency reports, would detail their success rates, any past issues, and their ability to meet demanding performance requirements in similar environments. This specific contract's award suggests they met the DoD's criteria for technical capability and past performance in the telecommunications domain.

How does the $18.7 million value compare to other telecommunications contracts of similar scope and duration?

The $18.7 million contract value, awarded over a period of approximately four years (from April 2005 to May 2009, with potential for extensions), translates to an average annual value of roughly $4.67 million. This figure is within the range for significant, but not exceptionally large, telecommunications service contracts for a major military installation like Tinker AFB. Larger, more complex network infrastructure projects or enterprise-wide telecommunications solutions for entire branches of service can run into hundreds of millions or even billions of dollars. However, for dedicated support and services at a specific base, $4.67 million annually is a substantial commitment, indicating a comprehensive service package is being procured. Benchmarking against other 'Other ADP & Telecommunication Services' contracts (PSC code D399) awarded around the same period would provide a more precise comparison.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract include potential cost overruns if the firm-fixed-price structure is not adequately managed, scope creep where additional services are requested beyond the original agreement without proper modification, and performance deficiencies where the contractor fails to deliver services at the required quality or availability levels. There's also a risk of vendor lock-in, making it difficult or costly to switch providers in the future. Ensuring robust oversight, clear performance metrics, and effective contract administration are crucial to mitigating these risks. The reliance on a single contractor for critical telecommunications services also presents a risk if the contractor faces financial instability or significant operational disruptions.

How effective is the 'full and open competition' approach in ensuring value for taxpayer money in this case?

The 'full and open competition' approach is generally considered highly effective in ensuring value for taxpayer money, especially for services like telecommunications where multiple capable providers often exist. By allowing all responsible sources to bid, the government maximizes the potential for receiving competitive offers, which drives down prices and encourages innovation. The fact that five bidders participated in this procurement indicates a healthy level of market interest and competition. This process allows the government to compare technical approaches and pricing from various vendors, selecting the one that offers the best overall value. While diligent evaluation is still required, the competitive nature of the award significantly increases the likelihood that the $18.7 million represents a fair market price for the services rendered.

What are the historical spending patterns for 'Other ADP & Telecommunication Services' at Tinker AFB or within the Air Force?

Historical spending patterns for 'Other ADP & Telecommunication Services' (PSC code D399) at Tinker AFB and within the broader Air Force indicate a consistent and significant investment in maintaining robust communication infrastructure. Agencies like the Air Force rely heavily on advanced telecommunications for command and control, logistics, intelligence, and daily operations. Spending in this category typically fluctuates based on modernization efforts, upgrades to existing systems, and the sustainment of current networks. Contracts awarded in this space often involve network management, data services, voice communications, and related equipment. Analyzing past contracts for Tinker AFB specifically would reveal trends in service providers, contract values, and the types of telecommunications needs prioritized by the base over time, providing context for the $18.7 million award.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 7575 COLSHIRE DRIVE, MCLEAN, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: FA877104D0004

IDV Type: IDC

Timeline