DoD Awards Northrop Grumman $35.2M for LRR MDSS Software Enhancements, Not Competed
Contract Overview
Contract Amount: $35,216,586 ($35.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2021-02-11
End Date: 2024-08-16
Contract Duration: 1,282 days
Daily Burn Rate: $27.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: LRR MDSS SOFTWARE ENHANCEMENTS TASK ORDER UNDER BASE IDIQ W56KGY-20-D-0012.
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $35.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LRR MDSS SOFTWARE ENHANCEMENTS TASK ORDER UNDER BASE IDIQ W56KGY-20-D-0012. Key points: 1. Significant contract value of $35.2M for specialized software. 2. Lack of competition raises concerns about price discovery and value. 3. Potential for cost overruns given Cost Plus Fixed Fee structure. 4. IT sector spending on system enhancements is common, but competition is key.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type can lead to higher costs if not managed tightly. Without competitive bidding, it's difficult to benchmark pricing against similar enhancements.
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 potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these software enhancements.
Public Impact
Enhancements to critical LRR MDSS software will improve military capabilities. Taxpayers may be overpaying due to the absence of competitive bidding. The long duration (1282 days) suggests a substantial scope of work.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- No small business participation noted
Positive Signals
- Supports critical military systems
- Long-term contract provides stability
Sector Analysis
This contract falls within the IT sector, specifically software development and enhancement for defense systems. Benchmarks for similar software enhancements vary widely, but competitive pricing is crucial for cost-effectiveness.
Small Business Impact
There is no indication of small business participation in this contract. Efforts should be made to ensure small businesses have opportunities to compete for relevant portions of such contracts.
Oversight & Accountability
The lack of competition warrants close oversight to ensure the contractor is delivering value and managing costs effectively under the Cost Plus Fixed Fee structure.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- Cost Plus Fixed Fee can incentivize higher spending.
- No small business participation.
- Potential for cost overruns.
- Lack of transparency in justification for sole-source.
Tags
search-detection-navigation-guidance-aer, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LRR MDSS SOFTWARE ENHANCEMENTS TASK ORDER UNDER BASE IDIQ W56KGY-20-D-0012.
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 $35.2 million.
What is the period of performance?
Start: 2021-02-11. End: 2024-08-16.
What was the justification for not competing this significant software enhancement contract?
The justification for not competing this contract is not provided in the data. Typically, sole-source awards require a documented justification, such as a unique capability or urgent need. Without this information, it's impossible to assess if the lack of competition was warranted or if it represents a missed opportunity for cost savings.
What are the risks associated with a Cost Plus Fixed Fee contract for software enhancements?
Cost Plus Fixed Fee (CPFF) contracts carry risks of cost overruns if the contractor's costs exceed estimates, as the government pays the actual costs plus a fixed fee. For software, scope creep and evolving requirements can inflate costs. Without strong oversight and a competitive baseline, the government may pay more than necessary.
How effective is this contract likely to be in delivering necessary software enhancements?
The effectiveness hinges on Northrop Grumman's execution and the government's oversight. While the company has a strong track record, the lack of competition and CPFF structure introduce risks to cost-effectiveness. The long duration suggests a complex project, and success will depend on clear requirements and diligent program management to ensure the enhancements meet operational needs.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
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: $35,216,586
Exercised Options: $35,216,586
Current Obligation: $35,216,586
Subaward Activity
Number of Subawards: 16
Total Subaward Amount: $5,895,206
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56KGY20D0012
IDV Type: IDC
Timeline
Start Date: 2021-02-11
Current End Date: 2024-08-16
Potential End Date: 2024-08-16 12:08:00
Last Modified: 2024-12-19
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