IRS IT O&M Contract for Critical Functions Awarded to Northrop Grumman for $57.5M
Contract Overview
Contract Amount: $57,516,866 ($57.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of the Treasury
Start Date: 2012-10-01
End Date: 2018-03-31
Contract Duration: 2,007 days
Daily Burn Rate: $28.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF CRITICAL FUNCTIONS - EXERCISE HRC O&M CONTRACT
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20220
Plain-Language Summary
Department of the Treasury obligated $57.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF CRITICAL FUNCTIONS - EXERCISE HRC O&M CONTRACT Key points: 1. Contract value of $57.5M over 5.5 years. 2. Awarded via full and open competition. 3. Potential risk in reliance on a single vendor for critical functions. 4. IT services sector, specifically 'Other Computer Related Services'.
Value Assessment
Rating: fair
The contract value of $57.5M over 5.5 years suggests a moderate annual spend. Benchmarking against similar IT O&M contracts would be necessary to fully assess pricing, but the firm fixed price structure provides some cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing compared to limited or sole-source procurements.
Taxpayer Impact: The competitive award process likely resulted in a fair price, minimizing potential overspending and maximizing taxpayer value for essential IT services.
Public Impact
Ensures continuity of critical IRS IT operations. Supports tax administration and taxpayer services. Potential for vendor lock-in if not managed effectively. Impacts the efficiency of tax processing and data management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Reliance on a single vendor for critical functions.
- Potential for scope creep in IT services.
- Vendor performance and system availability risks.
Positive Signals
- Competitive award process.
- Firm fixed price contract type.
- Clear contract duration.
Sector Analysis
This contract falls within the IT services sector, specifically 'Other Computer Related Services'. Spending in this area is substantial across government, supporting essential agency operations and digital transformation efforts.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The prime contractor is a large corporation, suggesting limited direct opportunities for small businesses unless they are subcontractors.
Oversight & Accountability
Oversight would focus on contract performance, adherence to service level agreements, and ensuring the continued availability and security of critical IRS IT systems. Regular performance reviews are essential.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Reliance on a single vendor for critical IT functions.
- Potential for vendor lock-in.
- Cybersecurity risks associated with critical infrastructure.
- Ensuring adequate internal oversight and technical expertise.
Tags
other-computer-related-services, department-of-the-treasury, dc, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $57.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::CT::IGF CRITICAL FUNCTIONS - EXERCISE HRC O&M CONTRACT
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 $57.5 million.
What is the period of performance?
Start: 2012-10-01. End: 2018-03-31.
What is the specific scope of 'critical functions' covered by this contract and how is performance measured?
The scope of 'critical functions' likely encompasses essential IT infrastructure, systems, and services that are vital for the IRS's core operations, such as tax processing, data storage, and taxpayer communication platforms. Performance is typically measured through Service Level Agreements (SLAs) that define metrics for uptime, response times, and issue resolution, with penalties for non-compliance.
What are the potential risks associated with Northrop Grumman managing these critical IRS IT functions, and how are they mitigated?
Risks include system outages, cybersecurity vulnerabilities, and vendor lock-in. Mitigation strategies involve robust cybersecurity protocols, regular system audits, contingency planning, and clear contract terms that allow for transition if necessary. The IRS likely maintains internal expertise to oversee the contractor's performance and manage risks.
How does the $57.5M contract value compare to industry benchmarks for similar IT O&M services, and does it represent good value for taxpayers?
Without specific details on the services rendered, a direct benchmark is difficult. However, the firm fixed price and competitive award suggest an effort to secure value. A detailed cost analysis comparing the per-unit cost of services to market rates would be needed to definitively assess value for taxpayers.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 4807 STONECROFT BLVD, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $57,673,439
Exercised Options: $57,523,439
Current Obligation: $57,516,866
Actual Outlays: $218,614
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $2,775,582
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TIRNO11D00027
IDV Type: IDC
Timeline
Start Date: 2012-10-01
Current End Date: 2018-03-31
Potential End Date: 2018-03-31 06:41:48
Last Modified: 2023-09-29
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