DoD's $112.5M ongoing theater support contract awarded to Northrop Grumman Systems Corporation

Contract Overview

Contract Amount: $112,500,029 ($112.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2010-11-05

End Date: 2012-06-30

Contract Duration: 603 days

Daily Burn Rate: $186.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ON GOING THEATER SUPPORT

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $112.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ON GOING THEATER SUPPORT Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost efficiencies. 2. Significant duration of 603 days suggests a long-term need for these engineering services. 3. Cost-plus-fixed-fee contract type may incentivize cost overruns, requiring close oversight. 4. Northrop Grumman's extensive experience in defense contracting likely influenced the sole-source award. 5. The 'ON GOING THEATER SUPPORT' designation points to critical, potentially time-sensitive operational requirements. 6. Engineering services are essential for maintaining and enhancing complex defense systems.

Value Assessment

Rating: questionable

Benchmarking the value of this $112.5 million contract is challenging due to its sole-source nature and specific 'ongoing theater support' designation. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value for engineering services. The cost-plus-fixed-fee structure necessitates rigorous oversight to ensure costs remain reasonable and that the fixed fee is justified by the scope of work. Comparisons to similar, competitively awarded theater support contracts would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities or when urgency precludes a full and open competition. The lack of competition limits price discovery and may result in higher costs for the government compared to a scenario with multiple bidders vying for the contract.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from potential cost savings that could arise from a bidding process. This could translate to a less efficient use of public funds.

Public Impact

The primary beneficiaries are likely military operations requiring ongoing theater support, ensuring readiness and effectiveness. Services delivered include critical engineering support, vital for the functioning of defense systems in operational theaters. Geographic impact is centered on the specific theater of operations where support is required. Workforce implications include the potential employment of engineers and technical staff by Northrop Grumman to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Cost-plus-fixed-fee structure can incentivize increased spending if not tightly managed.
Lack of transparency in the non-competitive bidding process hinders public scrutiny.
Contract duration of over 600 days suggests a significant, ongoing commitment of funds.

Positive Signals

Award to an established contractor like Northrop Grumman suggests reliance on proven expertise.
Engineering services are critical for maintaining complex defense infrastructure.
The contract addresses 'ongoing theater support,' indicating a direct link to national security operations.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The defense engineering services market is characterized by high barriers to entry, specialized knowledge, and significant government spending. Contracts like this are essential for maintaining and advancing the technological capabilities of military forces. Comparable spending benchmarks would typically involve other large-scale engineering support contracts awarded by the Department of Defense to major defense contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Northrop Grumman Systems Corporation, is a large defense contractor. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a direct set-aside means small businesses did not have a primary opportunity to bid on this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense, likely managed by the Defense Contract Management Agency (DCMA). The cost-plus-fixed-fee nature of the contract necessitates robust financial oversight to scrutinize incurred costs and ensure the fixed fee is appropriate. Transparency is limited due to the sole-source award, but reporting requirements for cost and performance would still apply. Inspector General jurisdiction would be applicable for investigations into fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services
Defense Contract Management Agency Contracts
Northrop Grumman Defense Contracts
Ongoing Theater Support Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ON GOING THEATER SUPPORT

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 $112.5 million.

What is the period of performance?

Start: 2010-11-05. End: 2012-06-30.

What is the historical spending pattern for 'ON GOING THEATER SUPPORT' contracts awarded by the Department of Defense?

Analyzing historical spending patterns for 'ON GOING THEATER SUPPORT' contracts requires access to comprehensive federal procurement data. Generally, the Department of Defense (DoD) allocates substantial resources to sustain operations in various theaters. These contracts often involve complex logistical, technical, and engineering services. Spending can fluctuate based on geopolitical conditions, the duration of military engagements, and the specific requirements of different operational theaters. Without specific data points for this exact contract category over time, it's difficult to provide precise figures. However, it is understood that such support is a continuous and significant expenditure within the DoD's budget, often awarded through both competitive and sole-source mechanisms depending on the urgency and specificity of the need.

How does the cost-plus-fixed-fee (CPFF) contract type typically impact project costs compared to other contract types?

The Cost-Plus-Fixed-Fee (CPFF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty. While it allows flexibility and can facilitate the start of work quickly, it carries a risk of cost overruns, as the contractor is incentivized to incur costs to perform the work, and the fee remains constant regardless of the final cost. Compared to fixed-price contracts, CPFF generally offers less cost certainty for the government. However, it can be more cost-effective than other cost-reimbursement types like Cost-Plus-Incentive-Fee (CPIF) if the fixed fee is set appropriately and robust oversight is maintained to control allowable costs.

What are the typical performance metrics or key performance indicators (KPIs) for 'ongoing theater support' contracts?

Performance metrics for 'ongoing theater support' contracts are highly dependent on the specific services being provided but generally focus on operational readiness, reliability, and responsiveness. Key Performance Indicators (KPIs) often include metrics such as system uptime and availability, response times for critical support requests, successful completion of maintenance and repair tasks within specified timelines, and adherence to safety and security protocols. For engineering services, KPIs might also involve the timely delivery of technical documentation, successful implementation of system upgrades, and the effectiveness of troubleshooting efforts. The government typically defines these KPIs in the contract's Performance Work Statement (PWS), and contractor performance is evaluated against them, often influencing future award decisions and contractor ratings.

What is Northrop Grumman Systems Corporation's track record with similar Department of Defense contracts?

Northrop Grumman Systems Corporation is a major defense contractor with an extensive history of performing complex services and providing advanced technologies for the Department of Defense (DoD). They have a well-established track record in areas such as aerospace, defense electronics, information systems, and shipbuilding. Their experience spans numerous large-scale programs and support contracts, often involving sophisticated engineering, logistics, and operational support. While specific performance details for every contract are not publicly available, their continued success in securing significant DoD contracts suggests a generally positive track record in delivering on complex requirements, though like any large contractor, they may have faced performance challenges on specific projects that are subject to contract-specific reviews and government evaluations.

What are the potential risks associated with a sole-source award for engineering services in a defense context?

Sole-source awards for engineering services in a defense context present several potential risks. The primary risk is the lack of price competition, which can lead to the government paying a higher price than if the contract had been competed. This can result in a less efficient use of taxpayer funds. Another risk is reduced incentive for the contractor to innovate or improve efficiency, as there is no competitive pressure from other firms. Furthermore, sole-source awards can sometimes indicate a lack of available qualified sources or a failure in the government's acquisition planning process. This can also limit opportunities for smaller, innovative companies to enter the market and provide services. Finally, without a competitive benchmark, assessing the true value and reasonableness of the contract price becomes more challenging for oversight bodies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q10R0169

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171

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: $112,646,136

Exercised Options: $112,646,136

Current Obligation: $112,500,029

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline