DoD awards $50.5M to Northrop Grumman for FSR Support Services, a sole-source contract
Contract Overview
Contract Amount: $50,479,601 ($50.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-01-10
End Date: 2023-01-31
Contract Duration: 1,482 days
Daily Burn Rate: $34.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: FSR SUPPORT SERVICES
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $50.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: FSR SUPPORT SERVICES Key points: 1. Significant contract value of $50.5 million awarded to a single large business. 2. Sole-source award raises questions about competition and potential price overruns. 3. Engineering services sector, with a focus on Maryland, indicates specialized support. 4. Contract duration of nearly 5 years suggests a long-term need for these services.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed carefully. Without competitive bids, it's difficult to assess if the $50.5 million price is reasonable compared to market rates for similar engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on this $50.5 million contract means taxpayers may be paying a premium for these engineering services.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract could lock the government into potentially suboptimal pricing. Lack of transparency in the sole-source award process can erode public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
Positive Signals
- Contract awarded to a known entity (Northrop Grumman)
- Services provided to the Department of the Army
Sector Analysis
This contract falls under Engineering Services (NAICS 541330), a sector often characterized by specialized expertise and significant government reliance. Benchmarks for similar sole-source engineering contracts are difficult to establish without competitive data, but large awards like this warrant scrutiny.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited small business participation.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure costs are reasonable and services are delivered effectively. Without competitive pressure, accountability mechanisms are crucial to prevent potential waste or fraud.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for overpayment due to lack of competition.
- Cost escalation risk inherent in CPFF contracts.
- Limited transparency in the procurement process.
- No clear indication of small business participation.
- Contract duration may exceed actual need or market evolution.
Tags
engineering-services, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. FSR SUPPORT SERVICES
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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $50.5 million.
What is the period of performance?
Start: 2019-01-10. End: 2023-01-31.
What specific engineering services are being provided under this contract, and why was a sole-source award deemed necessary?
The contract is for FSR Support Services, falling under the Engineering Services NAICS code 541330. A sole-source award typically implies that only one responsible source is available or capable of meeting the government's needs. This could be due to proprietary technology, unique expertise, or urgent requirements where competition is not feasible. Further justification from the contracting agency would be needed to fully understand the rationale.
What measures are in place to control costs and ensure value for money given the Cost Plus Fixed Fee structure and sole-source award?
With a Cost Plus Fixed Fee (CPFF) contract and a sole-source award, cost control relies heavily on stringent government oversight, detailed audits of incurred costs, and clear performance metrics. The fixed fee component provides some incentive for the contractor to manage costs efficiently to maximize profit. However, the absence of competition means the government must be particularly diligent in negotiating rates and monitoring expenditures to prevent cost overruns.
How does this $50.5 million sole-source contract align with the Department of the Army's long-term engineering support strategy?
The long duration of this contract (nearly 5 years) suggests it is intended to fulfill a sustained need for engineering support. Its alignment with the Army's strategy would depend on whether these specific services are critical to ongoing operations or modernization efforts. A sole-source award, however, raises questions about whether alternative, potentially more cost-effective solutions or contractors could have been considered over the long term through competitive processes.
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
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580B W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
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: $61,550,601
Exercised Options: $52,968,654
Current Obligation: $50,479,601
Subaward Activity
Number of Subawards: 29
Total Subaward Amount: $1,767,784
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56KGY19D0002
IDV Type: IDC
Timeline
Start Date: 2019-01-10
Current End Date: 2023-01-31
Potential End Date: 2023-01-31 00:00:00
Last Modified: 2025-09-29
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