Treasury's IRS Spends $30.6M on Northrop Grumman Maintenance Contract Awarded Under Full and Open Competition

Contract Overview

Contract Amount: $30,591,904 ($30.6M)

Contractor: Northrop Grumman Advanced Information Services, Inc

Awarding Agency: Department of the Treasury

Start Date: 2008-10-01

End Date: 2011-01-19

Contract Duration: 840 days

Daily Burn Rate: $36.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MAINTENANCE

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $30.6 million to NORTHROP GRUMMAN ADVANCED INFORMATION SERVICES, INC for work described as: MAINTENANCE Key points: 1. Contract Value: $30.6 million over approximately 2.5 years. 2. Contractor: Northrop Grumman Advanced Information Services, Inc. 3. Competition: Awarded under full and open competition. 4. Sector: Information Technology (IT) services, likely related to IRS systems.

Value Assessment

Rating: fair

The contract value of $30.6 million for approximately 2.5 years of maintenance suggests a moderate annual spend. Without specific details on the services provided, benchmarking against similar IT maintenance contracts is challenging. However, the duration and value indicate a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which generally promotes competitive pricing and ensures the government receives the best value. This method allows any qualified vendor to bid, fostering a robust price discovery process.

Taxpayer Impact: The use of full and open competition is intended to maximize taxpayer value by ensuring competitive pricing. The $30.6 million expenditure is subject to the efficiencies gained through this competitive process.

Public Impact

Taxpayers benefit from competitive bidding processes that aim to reduce costs for essential government services. The contract supports the operational integrity of IRS systems, crucial for tax administration and revenue collection. Transparency in contracting, especially for large sums, allows for public scrutiny and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific service details hinders precise value assessment.
Contract duration is relatively short, potentially leading to frequent re-competition and associated transition costs.

Positive Signals

Awarded via full and open competition.
Contractor is a large, established firm with significant experience.

Sector Analysis

This contract falls within the IT sector, specifically for maintenance services. Government spending on IT maintenance is substantial, supporting the vast infrastructure required for agency operations. Benchmarks vary widely based on the complexity and criticality of the systems maintained.

Small Business Impact

The contract was awarded to Northrop Grumman, a large business. There is no indication that small businesses were involved as subcontractors or prime contractors in this specific award, which is common for large, complex IT maintenance contracts.

Oversight & Accountability

Awarded under full and open competition suggests a structured procurement process. However, ongoing oversight of the maintenance services performed and adherence to contract terms are crucial for ensuring value and accountability throughout the contract period.

Related Government Programs

Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Lack of detailed service description.
Potential for vendor lock-in with specialized maintenance.
Limited visibility into small business participation.
Contract duration may necessitate frequent re-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $30.6 million to NORTHROP GRUMMAN ADVANCED INFORMATION SERVICES, INC. MAINTENANCE

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 $30.6 million.

What is the period of performance?

Start: 2008-10-01. End: 2011-01-19.

What specific maintenance services are covered under this $30.6 million contract, and how do they align with the IRS's critical IT infrastructure needs?

The provided data lacks specifics on the maintenance services. Understanding if these services cover hardware, software, network infrastructure, or specialized systems is key. Alignment with IRS needs would involve assessing if the contract supports the agency's mission-critical functions, such as tax processing, data security, and taxpayer services, ensuring operational continuity and modernization efforts.

Given the contract's duration and value, what are the potential risks associated with vendor lock-in or the need for future system upgrades?

While awarded competitively, a $30.6 million contract over roughly 2.5 years could pose risks if the maintenance is highly specialized, leading to vendor lock-in. This could limit future flexibility and potentially increase costs for upgrades or transitions. The IRS must ensure contract terms allow for competitive re-solicitation and incorporate provisions for technology refresh to mitigate these risks.

How effectively did the full and open competition process ensure cost-effectiveness and optimal performance for these IRS maintenance services?

Full and open competition is designed to foster cost-effectiveness by encouraging multiple bids. Its effectiveness hinges on the clarity of the solicitation, the competitiveness of the bidding pool, and the evaluation criteria used. For this contract, the IRS likely achieved competitive pricing, but ongoing performance monitoring is essential to confirm that the chosen solution delivers optimal value and meets service level agreements.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc (UEI: 967362331)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,591,904

Exercised Options: $30,591,904

Current Obligation: $30,591,904

Parent Contract

Parent Award PIID: TIRNO95D00099

IDV Type: IDC

Timeline