DoD awards Northrop Grumman $16M for Minuteman & Peacekeeper sustainment, spanning over 3 years

Contract Overview

Contract Amount: $16,033,339 ($16.0M)

Contractor: Northrop Grumman Space & Mission Systems Corp.

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2012-04-30

Contract Duration: 1,215 days

Daily Burn Rate: $13.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: A&AS CY 09 MINUTEMAN & PEACEKEEPER SUSTAINMENT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $16.0 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP. for work described as: A&AS CY 09 MINUTEMAN & PEACEKEEPER SUSTAINMENT Key points: 1. Contract awarded to Northrop Grumman for critical missile sustainment. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Award Fee, which can incentivize performance but may lead to cost overruns. 4. Spending is within the Defense sector, specifically for engineering services related to strategic missile systems.

Value Assessment

Rating: fair

The Cost Plus Award Fee contract type allows for potential award fees based on performance, but also carries the risk of costs exceeding initial estimates. Benchmarking against similar sustainment contracts for strategic assets is necessary for a full assessment.

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 likely considered. This method generally promotes price discovery and competitive pricing.

Taxpayer Impact: Taxpayer funds are being used for essential defense sustainment, with the expectation of competitive pricing due to the procurement method.

Public Impact

Ensures the continued operational readiness of the Minuteman and Peacekeeper missile systems. Supports national security by maintaining critical strategic deterrence capabilities. Provides employment opportunities within the aerospace and defense industry. Funds are allocated to a major defense contractor for long-term sustainment services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contract type may lead to higher than anticipated costs.
Long contract duration (over 3 years) increases exposure to potential cost escalations.
Lack of specific performance metrics in provided data makes it difficult to assess value for money.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Contract addresses critical national security assets.
Experienced contractor likely to ensure reliable sustainment.

Sector Analysis

This contract falls within the Defense sector, specifically for engineering services related to strategic missile systems. Spending benchmarks for similar sustainment contracts are highly variable depending on the specific system's complexity and age.

Small Business Impact

The prime contractor is Northrop Grumman, a large business. There is no indication from the provided data whether small businesses were involved as subcontractors.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is crucial given the contract type and duration to ensure cost control and performance.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to Cost Plus Award Fee structure.
Long contract duration increases risk of price escalation.
Lack of detailed performance metrics makes value assessment difficult.
Dependence on a single large contractor for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.0 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.. A&AS CY 09 MINUTEMAN & PEACEKEEPER SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $16.0 million.

What is the period of performance?

Start: 2009-01-01. End: 2012-04-30.

What are the specific award fee criteria and targets, and how do they align with achieving optimal sustainment outcomes for the Minuteman and Peacekeeper systems?

The specific award fee criteria and targets are not detailed in the provided data. Understanding these metrics is crucial for assessing whether the Cost Plus Award Fee structure effectively incentivizes Northrop Grumman to achieve optimal sustainment outcomes. Without this information, it's difficult to determine if the potential award fees truly reflect superior performance or simply meeting baseline requirements.

How does the total cost of this contract compare to the projected lifecycle costs of maintaining the Minuteman and Peacekeeper systems, considering potential cost growth under the CPFF structure?

A direct comparison to projected lifecycle costs is not possible with the given data. The $16 million award is for a specific period and scope. The Cost Plus Award Fee structure introduces uncertainty regarding final costs. A comprehensive analysis would require comparing this award to historical sustainment costs for similar systems and projecting potential cost growth based on the contract's fee structure and duration.

What mechanisms are in place to ensure the long-term effectiveness and modernization of the Minuteman and Peacekeeper systems under this sustainment contract?

The provided data focuses on sustainment services and does not detail mechanisms for long-term effectiveness or modernization. While sustainment ensures current operational status, separate contracts or program elements likely address upgrades and modernization. Oversight should verify that sustainment activities do not impede future modernization efforts and that the contractor's performance contributes to the systems' enduring viability.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1475 EAST HARRY SHEPPARD B, SAN BERNARDINO, CA, 92408

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,275,124

Exercised Options: $16,275,124

Current Obligation: $16,033,339

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA881806D0020

IDV Type: IDC

Timeline