DoD's $55.7M contract for communications security equipment saw TRW Inc. deliver over 5,121 days

Contract Overview

Contract Amount: $30,294,527 ($30.3M)

Contractor: Northrop Grumman Space & Mission Systems Corp.

Awarding Agency: Department of Defense

Start Date: 2002-03-21

End Date: 2016-03-28

Contract Duration: 5,121 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200208!000024!5700!GV65 !ESC/FD !F1962897D0034 !A!N! !N!0060 !20020321!20021030!557267903!557267903!004179453!N!TRW INC !1760 GLENN CURTISS ST !CARSON !CA!90746!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!+000030049843!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!2!001!B! !Z!N!Z! ! !Y!C!N! ! ! !C!C!A!A!000!A!D!N! ! ! ! ! ! !0001!

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP. for work described as: 200208!000024!5700!GV65 !ESC/FD !F1962897D0034 !A!N! !N!0060 !20020321!20021030!557267903!557267903!004179453!N!TRW INC !1760 GLENN CURTISS ST !CARSON !CA!90746!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!+000030049843!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMP… Key points: 1. The contract's value of $55.7 million over 5,121 days suggests a moderate daily expenditure, requiring further analysis for value. 2. Full and open competition was utilized, indicating a potentially robust bidding process for this acquisition. 3. The contract duration of over 14 years presents potential risks related to technological obsolescence and changing security requirements. 4. TRW Inc. was the contractor, with Northrop Grumman Space & Mission Systems Corp. listed as the parent company. 5. The contract falls under the 'Other Communications Equipment Manufacturing' NAICS code, placing it within the broader defense electronics sector. 6. The firm fixed-price contract type suggests that cost risks were largely borne by the contractor.

Value Assessment

Rating: fair

The contract's total value of $55.7 million spread over more than 14 years (5,121 days) results in an average daily expenditure of approximately $10,880. This daily rate appears moderate for specialized defense equipment, but a true value assessment would require benchmarking against similar communications security equipment contracts, considering the specific technical specifications and quantities involved. Without detailed unit cost data or comparisons to contemporary procurements of equivalent systems, it is difficult to definitively assess if this represented excellent value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors were likely invited to bid. The data does not specify the number of bidders, but this procurement method generally promotes a competitive environment, which can lead to better pricing and innovation. The use of full and open competition is a positive indicator for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Taxpayers likely benefited from a competitive bidding process that aimed to secure the best possible price for essential communications security equipment.

Public Impact

The primary beneficiaries are likely elements within the Department of Defense requiring secure communications capabilities. The contract delivered 'Communications Security Equipment and Components,' crucial for maintaining operational security. The geographic impact is primarily within the United States, with TRW Inc. located in Carson, California. Workforce implications would include jobs in manufacturing, engineering, and logistics related to the production and delivery of this specialized equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration of over 14 years increases the risk of technological obsolescence for the delivered equipment.
Lack of specific details on the 'Communications Security Equipment and Components' makes it difficult to assess the criticality and modernity of the procured items.
The parent company listed is Northrop Grumman, a major defense contractor, which may indicate a complex supply chain or consolidation within the industry.

Positive Signals

Awarded under full and open competition, suggesting a robust and potentially cost-effective procurement process.
Firm Fixed Price contract type shifts cost overrun risks to the contractor, providing budget certainty for the government.
The contract was awarded to TRW Inc., a known entity in the aerospace and defense sector at the time.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of specialized electronic components. The market for communications security equipment is driven by national security needs, with significant government spending allocated to ensure secure data transmission. Comparable spending benchmarks would typically be found within the broader 'Communications Equipment Manufacturing' (NAICS 334290) category, but the 'security' aspect implies higher value and specialized requirements.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. However, as a large prime contract, there may have been opportunities for small businesses to participate as subcontractors to TRW Inc. or its partners, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Air Force, a component of the Department of Defense. Accountability measures would be embedded within the contract's terms and conditions, including delivery schedules and performance specifications. Transparency is generally limited for defense procurements of this nature, with specific details often classified or restricted. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Secure Communications Equipment
National Security Agency (NSA) Programs
Department of Defense Procurement
Electronic Warfare Systems

Risk Flags

Long contract duration may lead to technological obsolescence.
Lack of specific technical details hinders full assessment.
Potential for cost overruns if contractor mismanaged estimates (though FFP mitigates government exposure).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.. 200208!000024!5700!GV65 !ESC/FD !F1962897D0034 !A!N! !N!0060 !20020321!20021030!557267903!557267903!004179453!N!TRW INC !1760 GLENN CURTISS ST !CARSON !CA!90746!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!+000030049843!N!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!2!001!B! !Z!N!Z! ! !Y!C!N! ! ! !C!C!A!A!000!A!D!N! ! ! ! ! ! !0001!

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $30.3 million.

What is the period of performance?

Start: 2002-03-21. End: 2016-03-28.

What was the specific type and capability of the 'Communications Security Equipment and Components' procured under this contract?

The provided data identifies the item under NAICS code 334290 as 'COMMUNICATIONS SECURITY EQUIP AND COMPS'. While the specific technical specifications, models, or capabilities are not detailed in this extract, this classification typically refers to hardware and software designed to protect sensitive information transmitted over communication networks. This could range from encryption devices and secure radios to network security appliances. Given the contract's duration (over 14 years) and its award by the Department of the Air Force, it likely encompassed equipment critical for maintaining secure command and control, intelligence, and operational communications, potentially including systems compliant with stringent government security standards like those set by the NSA.

How does the daily expenditure rate of approximately $10,880 compare to similar defense contracts for communications security equipment awarded around the same period?

Benchmarking the daily expenditure rate of approximately $10,880 requires access to a comprehensive database of similar defense contracts awarded between 2002 and 2016. Without such comparative data, it's challenging to definitively state whether this rate was high, low, or average. Factors influencing this rate would include the technological sophistication of the equipment, the volume of units procured, the level of customization required, and the specific security certifications mandated. Contracts for highly specialized, cutting-edge cryptographic equipment or systems integrated into complex platforms might command higher daily rates, while more standardized components could be lower. A thorough analysis would involve identifying contracts with similar Product Service Codes (PSCs) and contract types (e.g., Firm Fixed Price) awarded by DoD agencies during the same timeframe.

What were the primary risks associated with a contract duration exceeding 14 years for communications security equipment?

A contract duration of over 14 years (5,121 days) for communications security equipment presents several significant risks. Firstly, technological obsolescence is a major concern; the pace of innovation in electronics and cybersecurity is rapid, meaning equipment procured early in the contract could be outdated or less effective by its end. Secondly, evolving threat landscapes and changing security protocols (e.g., new encryption standards) could render the equipment non-compliant or vulnerable over time. Thirdly, maintaining and supporting such long-lived equipment can become increasingly difficult and costly as original manufacturers phase out support or components become scarce. Finally, the extended period increases the risk of requirement creep or shifts in strategic needs that the original equipment may not be able to accommodate.

What is the significance of TRW Inc. being the contractor, and its relationship with Northrop Grumman Space & Mission Systems Corp.?

TRW Inc. was a major aerospace and defense contractor prior to its acquisition by Northrop Grumman in 2002. The data indicates TRW Inc. as the contractor, with Northrop Grumman Space & Mission Systems Corp. listed as the parent company. This suggests that the contract was likely awarded to TRW shortly before or during the acquisition process, and subsequently managed under the Northrop Grumman umbrella. The involvement of these prominent defense entities signifies that the contract was for substantial, likely complex, and strategically important equipment. It also places the contract within the context of industry consolidation, where large prime contractors manage extensive portfolios of defense programs.

How did the 'Firm Fixed Price' contract type impact the financial risk for both the government and the contractor?

The 'Firm Fixed Price' (FFP) contract type is characterized by a set price that is not subject to adjustment based on the contractor's cost experience. For the government, this offers significant budget certainty, as the total cost is known upfront, barring any contract modifications. The financial risk is primarily borne by the contractor; if their costs exceed the agreed-upon price, their profit margin shrinks, or they may incur a loss. Conversely, if they manage their costs efficiently and complete the work below the fixed price, their profit increases. This contract type incentivizes the contractor to control costs and manage performance effectively to maximize profitability, while providing the government with predictable expenditure.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1760 GLENN CURTIS ST, CARSON, CA, 90746

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F1962897D0034

IDV Type: IDC

Timeline