Northrop Grumman awarded $20M for Airborne Launch Control System sustainment, raising value-for-money questions
Contract Overview
Contract Amount: $20,067,213 ($20.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2015-09-29
End Date: 2021-08-31
Contract Duration: 2,163 days
Daily Burn Rate: $9.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: GROUND SUBSYSTEM SUPPORT CONTRACT, AIRBORNE LAUNCH CONTROL SYSTEM SUSTAINMENT, IGF::CT::IGF
Place of Performance
Location: ROY, WEBER County, UTAH, 84067
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $20.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GROUND SUBSYSTEM SUPPORT CONTRACT, AIRBORNE LAUNCH CONTROL SYSTEM SUSTAINMENT, IGF::CT::IGF Key points: 1. Contract awarded to a single, large incumbent provider, potentially limiting competitive pricing. 2. The cost-plus-fixed-fee structure may incentivize cost escalation over efficiency. 3. Long contract duration (over 5 years) suggests a need for ongoing sustainment but also potential for price creep. 4. Limited public data on performance metrics makes a comprehensive value assessment challenging. 5. The contract falls within engineering services, a sector with significant government spending. 6. Lack of small business participation noted, with no set-aside or subcontracting requirements specified.
Value Assessment
Rating: fair
The contract's value of approximately $20 million over five years for sustainment services appears reasonable on the surface for specialized defense systems. However, without detailed performance metrics or comparisons to similar sustainment contracts for comparable systems, it is difficult to definitively benchmark its value. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D or sustainment, can sometimes lead to higher costs than fixed-price contracts if not managed tightly. Benchmarking against industry standards for engineering services of this nature would require more granular data on labor hours, material costs, and overhead.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were theoretically allowed to compete. However, the specific number of bidders and the details of the solicitation process are not provided. For complex, specialized systems like an airborne launch control system, the pool of qualified bidders might be limited, potentially leading to less aggressive pricing even with open competition. The fact that Northrop Grumman was awarded the contract suggests they were the most competitive offeror based on the evaluation criteria at the time.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through market forces. However, the actual savings realized depend on the number and capability of competing firms and the effectiveness of the evaluation process.
Public Impact
The primary beneficiaries are the Department of Defense, ensuring the operational readiness of critical airborne launch control systems. Services delivered include sustainment, maintenance, and potentially upgrades to ensure the longevity and effectiveness of the system. The geographic impact is likely national, supporting strategic air command assets wherever they are deployed. Workforce implications include specialized engineering and technical roles within Northrop Grumman and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure may not incentivize maximum cost efficiency.
- Limited transparency on performance metrics hinders full value assessment.
- Potential for vendor lock-in due to specialized system knowledge.
- Lack of explicit small business participation could limit broader economic impact.
Positive Signals
- Awarded under full and open competition, suggesting a competitive process.
- Long-term sustainment contract indicates a recognized need and commitment to system readiness.
- Incumbent contractor likely possesses deep institutional knowledge of the system.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), which encompasses firms providing engineering consulting and services. The defense sector relies heavily on such services for the design, development, sustainment, and modernization of complex military platforms and systems. Spending in this sector is substantial, driven by national security requirements. Comparable spending benchmarks would typically involve analyzing other sustainment contracts for major defense systems, looking at cost per operational hour or per system supported.
Small Business Impact
This contract does not appear to have been awarded as a small business set-aside, nor is there information indicating significant subcontracting to small businesses. The prime contractor, Northrop Grumman, is a large aerospace and defense company. The absence of small business participation could mean missed opportunities for smaller, specialized firms to contribute to this critical defense program and potentially limit the broader economic benefits to the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures contractors meet performance, cost, and schedule requirements. Accountability measures are embedded within the contract's terms and conditions, including reporting requirements and payment milestones tied to performance. Transparency is often limited for defense contracts due to security classifications, but contract awards and basic details are usually publicly available through systems like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Airborne Launch Control Systems
- Strategic Deterrence Systems Sustainment
- Aerospace Engineering Services
- Department of Defense Logistics and Sustainment Contracts
- Northrop Grumman Defense Contracts
Risk Flags
- Cost-Plus-Fixed-Fee Pricing
- Potential for Cost Overruns
- Limited Public Performance Data
- Long-Term Sustainment Requirement
- Sole-Source Potential in Specialized Fields
Tags
defense, engineering-services, northrop-grumman, department-of-defense, full-and-open-competition, cost-plus-fixed-fee, sustainment, airborne-launch-control-system, utah, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GROUND SUBSYSTEM SUPPORT CONTRACT, AIRBORNE LAUNCH CONTROL SYSTEM SUSTAINMENT, IGF::CT::IGF
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 $20.1 million.
What is the period of performance?
Start: 2015-09-29. End: 2021-08-31.
What is Northrop Grumman's track record with similar sustainment contracts for critical defense systems?
Northrop Grumman has a long history of supporting complex defense systems, including strategic weapons platforms. Their track record typically involves extensive experience in aerospace engineering, systems integration, and lifecycle sustainment. For airborne launch control systems specifically, their incumbency suggests a deep understanding of the system's intricacies, maintenance requirements, and operational context. While generally considered a reliable contractor, performance can vary across contracts, with factors like contract type, oversight rigor, and specific program challenges influencing outcomes. Analyzing past performance on similar contracts would involve reviewing contract award histories, any reported performance issues or successes, and customer satisfaction feedback where available.
How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for sustainment services, and what are the implications for value?
The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves significant uncertainty, such as in sustainment of complex, aging systems. The government pays the contractor's actual allowable costs plus a fixed fee representing profit. This structure provides flexibility but can incentivize cost growth, as the contractor is reimbursed for costs incurred. Compared to fixed-price contracts, CPFF offers less cost certainty for the government. For sustainment, it can be beneficial if unforeseen technical issues arise, but it requires robust government oversight to manage costs effectively and ensure value. Fixed-price incentive fee or other performance-based contracts might offer better value if performance metrics can be clearly defined and measured.
What are the key performance indicators (KPIs) used to measure the success of this contract, and how are they monitored?
Specific Key Performance Indicators (KPIs) for this 'GROUND SUBSYSTEM SUPPORT CONTRACT, AIRBORNE LAUNCH CONTROL SYSTEM SUSTAINMENT' are not publicly detailed in the provided data. However, typical KPIs for such sustainment contracts would likely include metrics related to system availability, Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR), response time for support requests, and successful completion of scheduled maintenance or inspections. Monitoring these KPIs would be the responsibility of the contracting officer's representative (COR) and the Defense Contract Management Agency (DCMA). They would review contractor reports, conduct site visits, and potentially use government-furnished data on system performance to assess adherence to contractual requirements and ensure mission readiness.
What is the historical spending trend for airborne launch control system sustainment, and how does this award compare?
Historical spending data for airborne launch control system sustainment is not directly available in the provided snippet. However, the award of $20,067,212.68 from 2015 to 2021 suggests an average annual spend of approximately $3.34 million. To compare this, one would need to access historical contract databases (like FPDS) to identify previous contracts for the same or similar systems, noting their award amounts, durations, and pricing structures. Trends might indicate increasing costs due to aging systems, technological obsolescence, or changes in operational tempo. This specific award represents a significant investment in maintaining a critical component of the nation's strategic deterrent.
Are there any identified risks associated with Northrop Grumman's performance on this specific contract or similar contracts?
Without access to detailed performance reports or past performance reviews, specific risks associated with Northrop Grumman's performance on this particular contract are not publicly identifiable. However, general risks for sustainment contracts of this nature include potential cost overruns due to unforeseen technical challenges, schedule delays in providing support or parts, and risks related to supply chain disruptions for specialized components. For large incumbent contractors like Northrop Grumman, risks can also include complacency or a lack of aggressive innovation if competition is perceived as low. A thorough risk assessment would require reviewing contractor past performance information (CAGE code searches, CPARS data) and analyzing the specific technical and operational environment of the airborne launch control system.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,184,767
Exercised Options: $20,198,498
Current Obligation: $20,067,213
Subaward Activity
Number of Subawards: 104
Total Subaward Amount: $29,248,487
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA821415D0001
IDV Type: IDC
Timeline
Start Date: 2015-09-29
Current End Date: 2021-08-31
Potential End Date: 2021-08-31 00:00:00
Last Modified: 2025-10-03
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