DoD's $54M Computer Systems Design Contract with Northrop Grumman: A 4-Year Time & Materials Award

Contract Overview

Contract Amount: $54,115,019 ($54.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2012-07-29

End Date: 2016-07-28

Contract Duration: 1,460 days

Daily Burn Rate: $37.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TRAVEL/OTHER DIRECT COSTS (ODC)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20310

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $54.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TRAVEL/OTHER DIRECT COSTS (ODC) Key points: 1. Significant spending on computer systems design services. 2. Awarded to a major defense contractor, Northrop Grumman. 3. Full and open competition was utilized. 4. Contract duration was 4 years, indicating a substantial project.

Value Assessment

Rating: fair

The contract's Time and Materials (T&M) pricing structure can lead to cost overruns if not closely managed. Benchmarking against similar T&M contracts for computer systems design is crucial to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition suggests a robust price discovery process. However, T&M contracts inherently carry higher risk for cost certainty compared to fixed-price awards.

Taxpayer Impact: Taxpayers may face increased costs due to the T&M nature of the contract, which lacks a ceiling on labor hours.

Public Impact

Defense spending on IT services represents a significant portion of the federal budget. The use of T&M contracts can be a concern for cost control and predictability. Long-term contracts like this require ongoing oversight to ensure performance and value. The specific services provided under 'Computer Systems Design Services' are broad and require detailed understanding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

  • Time and Materials pricing
  • Long contract duration
  • Lack of small business participation noted

Positive Signals

  • Full and open competition
  • Awarded to a reputable contractor

Sector Analysis

The IT services sector is a major area of federal spending. Benchmarks for computer systems design services vary widely based on complexity and duration, but $54M over 4 years is a substantial investment.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). There is no indication of small business subcontracting goals or performance within this data.

Oversight & Accountability

The contract's duration and T&M structure necessitate strong oversight from the Department of the Army to manage costs and ensure deliverables meet requirements. Tracking performance metrics and conducting regular reviews are essential.

Related Government Programs

  • Computer Systems Design Services
  • Department of Defense Contracting
  • Department of the Army Programs

Risk Flags

  • Potential for cost overruns due to Time and Materials pricing.
  • Lack of defined scope may lead to inefficiencies.
  • Long contract duration increases long-term financial commitment.
  • No small business participation indicated.
  • Limited insight into specific services provided.

Tags

computer-systems-design-services, department-of-defense, dc, definitive-contract, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TRAVEL/OTHER DIRECT COSTS (ODC)

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 $54.1 million.

What is the period of performance?

Start: 2012-07-29. End: 2016-07-28.

What specific computer systems design services were procured under this contract, and how did their complexity justify the T&M pricing structure?

The provided data categorizes the service as 'Computer Systems Design Services' (NAICS 541512) but lacks specifics on the actual tasks performed. T&M pricing is typically used when the scope of work is not well-defined or is expected to evolve significantly. Without detailed task descriptions, it's difficult to definitively assess if T&M was the most appropriate pricing model for value.

Given the T&M structure and 4-year duration, what mechanisms were in place to control costs and mitigate the risk of contractor inefficiency?

Effective cost control in T&M contracts relies heavily on robust oversight, including detailed timesheet reviews, labor rate verification, and clear performance metrics. The contract's 'DEFINITIVE CONTRACT' type suggests a commitment, but the T&M nature requires proactive management to prevent scope creep and ensure efficient resource utilization by Northrop Grumman.

How does the $54M expenditure compare to industry benchmarks for similar computer systems design projects of comparable scope and duration?

Direct comparison is challenging without granular details on the specific services rendered. However, $54 million over four years averages $13.5 million annually. This figure needs to be benchmarked against IT service contracts of similar complexity, duration, and geographic location, considering the contractor's overhead and profit margins.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesComputer Systems Design and Related ServicesComputer Systems Design Services

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91WAW12R0009

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 2340 DULLES CORNER BOULEVARD, 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: $54,255,641

Exercised Options: $54,255,641

Current Obligation: $54,115,019

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline

Start Date: 2012-07-29

Current End Date: 2016-07-28

Potential End Date: 2016-07-28 00:00:00

Last Modified: 2025-12-31

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