Treasury's $29.6M contract with Northrop Grumman for IT services awarded under full and open competition

Contract Overview

Contract Amount: $29,591,450 ($29.6M)

Contractor: Northrop Grumman Advanced Information Services, Inc

Awarding Agency: Department of the Treasury

Start Date: 2006-09-28

End Date: 2010-05-26

Contract Duration: 1,336 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TCS

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $29.6 million to NORTHROP GRUMMAN ADVANCED INFORMATION SERVICES, INC for work described as: TCS Key points: 1. Contract awarded for IT services, indicating a need for technology infrastructure or support. 2. The firm fixed-price contract type suggests a defined scope and predictable costs. 3. Awarded to a large, established defense contractor, potentially indicating complex requirements. 4. The contract duration of 1336 days (approx. 3.6 years) points to a significant, long-term need. 5. The contract was awarded in 2006, providing historical context for IT spending. 6. No small business set-aside was utilized, suggesting the competition was open to all offerors.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or performance metrics. The total award amount of approximately $29.6 million over roughly 3.6 years averages to about $8.2 million annually. This figure needs to be compared against the scope and complexity of the IT services provided to the IRS. Given the award date of 2006, current market rates for similar services would likely be higher due to inflation and technological advancements. Without more detail on the services rendered, a definitive value-for-money assessment is difficult.

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 a bid. This typically suggests a robust bidding process with multiple interested parties. The fact that it was competed openly implies the agency sought the best possible solution and price through a competitive process. The number of bidders is not specified, but the open competition framework is a positive sign for price discovery and market responsiveness.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value and potentially lower costs through multiple bids. Open competition generally leads to more transparent pricing and encourages contractors to offer competitive terms.

Public Impact

Federal employees within the Internal Revenue Service likely benefited from enhanced IT services, improving operational efficiency. The contract supported the Treasury Department's mission by ensuring the reliability and functionality of its IT systems. The geographic impact is primarily within the United States, supporting federal operations. The workforce implications are likely related to IT professionals, either employed by the contractor or within the agency, managing and utilizing the supported systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the effectiveness and efficiency of the IT services provided.
The significant duration of the contract could lead to vendor lock-in if not managed carefully.
As an older contract (awarded 2006), its relevance to current IT needs and best practices may be limited without modifications or extensions.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent procurement process.
The firm fixed-price contract type provides cost certainty for the government.
The contract was awarded to a well-established entity, Northrop Grumman, known for its capabilities in complex IT solutions.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically supporting government IT infrastructure and services. The IT services market for the federal government is substantial, with agencies consistently investing in maintaining and upgrading their technological capabilities. This contract represents a portion of the broader federal spending on IT, which includes software, hardware, and support services. Comparable spending benchmarks would depend heavily on the specific IT services procured, such as network management, cybersecurity, or application development.

Small Business Impact

This contract was not awarded as a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses within the provided data. This suggests that the primary award went to a large prime contractor, and any involvement of small businesses would likely be through Northrop Grumman's own subcontracting decisions. The absence of a set-aside means that opportunities for small businesses to directly compete for this specific contract were limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS or Treasury Department. Accountability measures would be defined by the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or identified.

Related Government Programs

IRS IT Modernization Programs
Treasury Department IT Infrastructure Support
Federal Civilian Agency IT Services Contracts
Large Prime Contractor IT Support

Risk Flags

Contract awarded in 2006; current relevance and technology may be outdated.
Lack of specific performance data makes value assessment difficult.
No indication of small business participation or set-aside.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $29.6 million to NORTHROP GRUMMAN ADVANCED INFORMATION SERVICES, INC. TCS

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN ADVANCED INFORMATION SERVICES, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.6 million.

What is the period of performance?

Start: 2006-09-28. End: 2010-05-26.

What specific IT services were provided under this contract?

The provided data does not specify the exact IT services rendered under this contract. However, given the contractor (Northrop Grumman Advanced Information Services) and the awarding agency (IRS), it likely encompassed a range of IT support functions. These could include system maintenance, network operations, software development or integration, cybersecurity measures, or data management services. Without a detailed statement of work or contract line item numbers (CLINs), a precise definition of the services is not possible from the available data. Further investigation into the contract's documentation would be required to ascertain the specific deliverables.

How does the $29.6 million award compare to similar IT contracts awarded by the IRS around 2006?

Comparing the $29.6 million award to similar IRS IT contracts from 2006 requires access to historical procurement data for that period. The average annual value of this contract was approximately $8.2 million. To assess its relative size, one would need to analyze the distribution of IT contract values awarded by the IRS in fiscal year 2006. If the IRS awarded numerous IT contracts in the multi-million dollar range, this contract might be considered moderate. Conversely, if most IT contracts were smaller, this award could be seen as significant. Without a benchmark of comparable contracts from that specific timeframe and agency, it's difficult to definitively state whether $29.6 million was high, low, or average for the IRS's IT needs at the time.

What is Northrop Grumman's track record with the federal government, particularly the IRS, prior to and following this contract?

Northrop Grumman is a major defense contractor with a long history of serving various U.S. federal agencies, including the Department of the Treasury and the IRS. Prior to this 2006 contract, the company had established itself as a provider of complex IT, aerospace, and defense solutions. Following this contract, Northrop Grumman has continued to secure significant federal contracts across multiple departments. Their extensive portfolio includes work in areas such as C4ISR, cybersecurity, enterprise IT, and mission systems. While specific performance details for this particular IRS contract are not detailed here, Northrop Grumman's sustained presence in the federal contracting landscape suggests a generally satisfactory performance record, enabling them to win subsequent large-scale awards.

What were the primary risks associated with this contract, and how were they managed?

Potential risks for a contract of this nature and duration (2006-2010) could include technological obsolescence, scope creep, cost overruns (though mitigated by firm-fixed-price), contractor performance issues, and security vulnerabilities. Given the firm-fixed-price structure, the primary financial risk for the government was minimized, shifting cost overrun risk to the contractor. Managing technological obsolescence would require proactive contract management and potential modifications to incorporate newer technologies. Contractor performance risks are typically managed through defined performance metrics, regular reviews, and contractual remedies. Security risks, especially for IRS systems, would necessitate stringent cybersecurity protocols and compliance checks throughout the contract lifecycle. Specific risk mitigation strategies employed would be detailed in the contract's management plan.

How has federal IT spending in the 'Internal Revenue Service' category evolved since this contract's award in 2006?

Federal IT spending, particularly within agencies like the IRS, has seen substantial growth and transformation since 2006. The IRS, like many government entities, has faced increasing pressure to modernize its systems, enhance cybersecurity, and improve taxpayer services through digital means. This has led to significant investments in areas such as cloud computing, data analytics, artificial intelligence, and modernizing legacy systems. While this specific $29.6 million contract represented a portion of IT spending in its time, overall federal IT budgets have generally trended upwards, driven by evolving technological landscapes and increasing demands for digital services. The IRS, in particular, has undergone major modernization initiatives aimed at replacing outdated infrastructure and improving efficiency, likely involving substantially larger investments in subsequent years compared to this 2006 award.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 8100 GATEHOUSE RD, FALLS CHURCH, VA, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,591,450

Exercised Options: $29,591,450

Current Obligation: $29,591,450

Parent Contract

Parent Award PIID: TIRNO95D00099

IDV Type: IDC

Timeline