DoD Spends $35.4M on Northrop Grumman O&M for TES Family of Systems
Contract Overview
Contract Amount: $35,403,588 ($35.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2009-06-29
End Date: 2013-06-30
Contract Duration: 1,462 days
Daily Burn Rate: $24.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: U436530 OPERATIONS AND MAINTENANCE TES FAMILY OF SYSTEMS TAS::21 2020::TAS
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $35.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: U436530 OPERATIONS AND MAINTENANCE TES FAMILY OF SYSTEMS TAS::21 2020::TAS Key points: 1. Significant contract awarded to a major defense contractor, Northrop Grumman. 2. The contract covers operations and maintenance for a complex systems family. 3. A substantial portion of the spending is concentrated in Maryland. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 5. No small business participation was noted.
Value Assessment
Rating: fair
The $35.4 million awarded for O&M services appears to be a significant investment. Benchmarking against similar contracts for complex system maintenance is difficult without more detailed scope information, but the Cost Plus Fixed Fee structure warrants scrutiny for potential cost inefficiencies compared to fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and may result in higher costs for the government compared to a competitively bid contract. The justification for sole-source is not provided.
Taxpayer Impact: The absence of competition for a contract of this magnitude raises concerns about taxpayer value and the potential for inflated costs.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The long duration of the contract (over 4 years) means sustained spending. Focus on a single, large contractor could limit innovation from smaller, specialized firms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Fixed Fee contract type can incentivize higher spending.
- No small business participation noted.
Positive Signals
- Contract supports critical defense operations and maintenance.
- Awarded to an established defense contractor with relevant experience.
Sector Analysis
This contract falls within the IT and Defense sectors, specifically for 'Other Computer Related Services'. Spending on IT operations and maintenance for defense systems is a significant area of government expenditure, often characterized by long-term contracts and specialized requirements.
Small Business Impact
The data indicates no small business participation in this contract. This is a missed opportunity to leverage the capabilities of small businesses and could indicate a lack of outreach or a focus on large, incumbent contractors for this specific requirement.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. The Department of Defense and the Defense Contract Management Agency should monitor performance and costs diligently to mitigate risks associated with non-competitive awards.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may lead to higher prices.
- Cost Plus Fixed Fee structure carries inherent cost overrun risks.
- No small business participation.
- Limited transparency on the justification for sole-source award.
Tags
other-computer-related-services, department-of-defense, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. U436530 OPERATIONS AND MAINTENANCE TES FAMILY OF SYSTEMS TAS::21 2020::TAS
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 $35.4 million.
What is the period of performance?
Start: 2009-06-29. End: 2013-06-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative competition strategies considered?
The provided data does not include 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. Without this justification, it's impossible to assess if competitive alternatives were adequately explored or if this was the most cost-effective approach for the government.
How does the Cost Plus Fixed Fee structure impact the overall cost-effectiveness and potential for cost overruns in this contract?
The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover allowable costs plus a predetermined fixed fee. While it provides an incentive for the contractor to control costs to maximize their fee, it can also lead to cost overruns if initial estimates are inaccurate or if scope creep occurs. This structure shifts some cost risk to the government compared to fixed-price contracts.
What is the specific 'TES Family of Systems' being maintained, and what is its criticality to Department of Defense operations?
The 'TES Family of Systems' is not explicitly defined in the provided data. However, its designation within the Department of Defense suggests it is a critical technological infrastructure. Understanding its specific function and operational importance would be crucial for evaluating the necessity of this significant O&M expenditure and the associated risks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $36,684,750
Exercised Options: $36,684,750
Current Obligation: $35,403,588
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-06-29
Current End Date: 2013-06-30
Potential End Date: 2013-06-30 00:00:00
Last Modified: 2021-07-14
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