Treasury's IRS awards Northrop Grumman $38.6M for Custom Computer Programming Services

Contract Overview

Contract Amount: $38,645,387 ($38.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of the Treasury

Start Date: 2004-10-20

End Date: 2008-01-31

Contract Duration: 1,198 days

Daily Burn Rate: $32.3K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: IT

Official Description: OPERATIONS & MAINTENANCE

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $38.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: OPERATIONS & MAINTENANCE Key points: 1. Significant contract value of $38.6 million for IT services. 2. Northrop Grumman is a major defense contractor, indicating potential for large-scale IT solutions. 3. The contract was awarded non-competitively, raising questions about price discovery and value. 4. The sector is IT, specifically custom computer programming, a critical area for government operations.

Value Assessment

Rating: questionable

The contract value of $38.6 million for a 4-year period suggests a substantial investment. Without competitive bids, it's difficult to assess if this pricing is optimal compared to market rates for similar custom programming services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

This contract was awarded as a non-competitive delivery order. This method limits price discovery and may not ensure the government receives the best possible value, as there was no comparison against other potential providers.

Taxpayer Impact: The lack of competition could mean taxpayers are paying more than necessary for these custom computer programming services.

Public Impact

Taxpayers may be overpaying due to the non-competitive award. The IRS relies on these custom programming services, making continuity of service a key concern. The long duration of the contract (nearly 4 years) locks in the current pricing structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. Government spending in this area is substantial, and competitive bidding is typically encouraged to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.

Oversight & Accountability

The non-competitive nature of this award warrants scrutiny. Oversight should focus on ensuring the services provided are essential and that the pricing, while not competitively determined, is reasonable and justified.

Related Government Programs

Risk Flags

Tags

custom-computer-programming-services, department-of-the-treasury, va, do, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $38.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. OPERATIONS & MAINTENANCE

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $38.6 million.

What is the period of performance?

Start: 2004-10-20. End: 2008-01-31.

What was the justification for awarding this contract non-competitively?

The justification for a non-competitive award typically stems from specific circumstances such as urgent needs, unique capabilities of a single provider, or if only one source is reasonably available. Without further documentation, it's presumed the agency had a valid reason, but this limits transparency and potential cost savings.

How can the IRS ensure they are receiving fair value without competition?

Even without competition, the IRS can employ several strategies to ensure fair value. This includes conducting thorough market research to establish independent cost estimates, negotiating aggressively on price and terms, and closely monitoring performance and deliverables to ensure the services meet or exceed expectations.

What is the risk of vendor lock-in with this long-term, non-competitive contract?

There is a significant risk of vendor lock-in. The long duration and non-competitive nature mean the IRS is committed to Northrop Grumman for nearly four years. This can make it difficult and costly to switch providers later, potentially limiting future innovation and competitive pricing opportunities.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesComputer Systems Design and Related ServicesCustom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONSADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

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

Address: 15010 CONFERENCE CENTER DR, CHANTILLY, VA, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,645,387

Exercised Options: $38,645,387

Current Obligation: $38,645,387

Parent Contract

Parent Award PIID: GS35F4506G

IDV Type: FSS

Timeline

Start Date: 2004-10-20

Current End Date: 2008-01-31

Potential End Date: 2008-01-31 00:00:00

Last Modified: 2013-08-06

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