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
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 Services › Computer Systems Design and Related Services › Computer 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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