DoD's $200M CRAM Software Contract Awarded to Northrop Grumman Raises Competition Concerns
Contract Overview
Contract Amount: $200,787,153 ($200.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2007-10-01
End Date: 2017-03-31
Contract Duration: 3,469 days
Daily Burn Rate: $57.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: CRAM SOFTWARE DEVELOPMENT
Place of Performance
Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278
Plain-Language Summary
Department of Defense obligated $200.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: CRAM SOFTWARE DEVELOPMENT Key points: 1. Significant spending of $200.8M on custom computer programming services. 2. Sole-source award to Northrop Grumman limits competitive pricing. 3. Long contract duration (3469 days) may indicate potential for cost overruns. 4. Lack of small business participation noted.
Value Assessment
Rating: questionable
The contract's total value is substantial. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to market rates for similar custom computer programming services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition on a $200M contract likely results in a higher price than could have been achieved through a competitive process.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The long duration of the contract could lead to scope creep and increased costs. Limited transparency into the justification for a sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- No small business participation
Positive Signals
- Contract awarded to a known entity (Northrop Grumman)
Sector Analysis
This contract falls under custom computer programming services, a sector often characterized by complex requirements and specialized expertise. Benchmarks for similar sole-source, long-duration contracts are difficult to establish without competitive data.
Small Business Impact
The contract data indicates no small business participation (ss: false, sb: false). This suggests that opportunities for small businesses in this significant IT procurement were missed.
Oversight & Accountability
The sole-source nature of this contract warrants scrutiny regarding the justification and procurement process. Oversight should focus on ensuring the contractor delivered value and managed costs effectively over the contract's long life.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award raises concerns about fair pricing and competition.
- Long contract duration increases risk of cost overruns and scope creep.
- Lack of small business participation.
- Limited transparency into justification for sole-source award.
- Potential for contractor lock-in due to specialized services.
Tags
custom-computer-programming-services, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $200.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. CRAM SOFTWARE DEVELOPMENT
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $200.8 million.
What is the period of performance?
Start: 2007-10-01. End: 2017-03-31.
What was the specific justification for awarding this $200M contract on a sole-source basis, and was a full and open competition truly not feasible?
The provided data does not detail the justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent need. Without this information, it's impossible to verify if a competitive process was genuinely infeasible or if alternative approaches could have been explored.
Given the contract's length and sole-source nature, what mechanisms were in place to control costs and ensure the government received fair value?
The contract type is 'COST PLUS INCENTIVE FEE' (pt: 'COST PLUS INCENTIVE FEE'), which aims to incentivize the contractor to control costs by sharing savings or cost overruns. However, the effectiveness of these mechanisms depends heavily on the specific incentive structure, the baseline cost estimates, and robust government oversight throughout the contract's 10-year duration.
How effectively did Northrop Grumman deliver the custom computer programming services, and were there any performance issues or significant deviations from the original scope?
The provided data does not contain information on contractor performance, specific deliverables, or any identified issues. Assessing the effectiveness of the service delivery would require access to performance reports, contract modifications, and potentially user feedback from the Department of Defense agencies that utilized the CRAM software.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q07R0158
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1800 GLENN CURTISS ST, CARSON, CA, 90746
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $200,787,153
Exercised Options: $200,787,153
Current Obligation: $200,787,153
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-10-01
Current End Date: 2017-03-31
Potential End Date: 2017-03-31 00:00:00
Last Modified: 2023-09-29
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