Northrop Grumman awarded $98.8M for C2BMC experiments, highlighting R&D in missile defense

Contract Overview

Contract Amount: $98,844,015 ($98.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2010-07-16

End Date: 2015-04-30

Contract Duration: 1,749 days

Daily Burn Rate: $56.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 4250 ENHANCED C2BMC EXPERIMENTS - INITIAL TASK ORDER AWARD.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $98.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 4250 ENHANCED C2BMC EXPERIMENTS - INITIAL TASK ORDER AWARD. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. Awarded by the Missile Defense Agency, indicating a focus on critical national security capabilities. 4. The duration of the contract is substantial, spanning over 4 years, suggesting a complex and long-term project. 5. The North American Industry Classification System (NAICS) code 541712 points to research and development activities. 6. This award represents a significant investment in enhancing command and control systems for missile defense.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. However, the significant dollar amount for R&D activities suggests a substantial investment. Comparing it to similar large-scale defense R&D contracts would provide better context for value for money. The fixed fee component offers some cost control, but the cost-plus nature inherently carries risk.

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 had the opportunity to submit proposals. This approach is generally expected to foster competitive pricing and innovation. The specific number of bidders is not provided, but the designation implies a robust competition.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and technical solution for critical missile defense research.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, receiving enhanced command and control capabilities. Services delivered include research and development for enhanced Command and Control, Battle Management, and Communications (C2BMC) experiments. The contract is associated with Alabama (AL), suggesting potential workforce and economic impact in that region. The contract supports specialized scientific and engineering roles within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contracts can incentivize higher spending if not rigorously overseen.
The long duration may present challenges in adapting to evolving technological landscapes.
Lack of specific performance metrics makes it difficult to assess efficiency.

Positive Signals

Awarded through full and open competition, suggesting a competitive environment.
Focus on critical missile defense capabilities aligns with national security priorities.
Northrop Grumman is a major defense contractor with extensive experience in complex systems.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research and Development (R&D) for advanced command and control systems. The market for defense R&D is characterized by high technological complexity, significant government investment, and long development cycles. Comparable spending benchmarks would involve looking at other large-scale R&D contracts within the Missile Defense Agency or broader DoD.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. As a large prime contract awarded to Northrop Grumman, it is unlikely to directly benefit small businesses unless they are engaged as subcontractors. Further analysis would be needed to determine subcontracting plans and their impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management within the Missile Defense Agency. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is generally maintained through contract award databases, though specific performance and cost details may be sensitive.

Related Government Programs

Missile Defense Systems
Command and Control Systems
DoD Research and Development Programs
Ballistic Missile Defense

Risk Flags

Cost Overrun Risk (CPFF)
Long Project Duration
Technological Obsolescence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 4250 ENHANCED C2BMC EXPERIMENTS - INITIAL TASK ORDER AWARD.

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 (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $98.8 million.

What is the period of performance?

Start: 2010-07-16. End: 2015-04-30.

What is Northrop Grumman's track record with similar large-scale R&D contracts for the DoD?

Northrop Grumman has a long and extensive history of performing large-scale research and development contracts for the Department of Defense across various domains, including aerospace, defense electronics, and information systems. They are a prime contractor on numerous complex programs, often involving advanced technologies and long program durations. Their track record includes significant contributions to missile defense, space systems, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities. While specific performance metrics for past contracts are often proprietary or classified, their continued selection for major programs suggests a generally positive assessment of their capabilities and past performance by the DoD. However, like any large contractor, they have also faced scrutiny and challenges on specific programs regarding cost, schedule, and performance.

How does the $98.8 million award compare to typical R&D spending for enhanced C2BMC systems?

The $98.8 million award for enhanced C2BMC experiments represents a significant investment in a critical component of missile defense. To benchmark this against typical spending, one would need to analyze historical contract data for C2BMC development and related command and control R&D programs within the Missile Defense Agency and the broader DoD. Such analysis would involve looking at the average award values, contract durations, and the scope of work for comparable R&D efforts. Given that C2BMC is a complex, integrated system essential for missile defense operations, substantial funding for its enhancement and experimentation is expected. This particular award, covering initial task orders over a period of nearly five years, suggests a substantial, albeit potentially phased, commitment to advancing these capabilities.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for Research and Development (R&D) revolve around cost control and potential for overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. For R&D, where the scope and technical challenges can be uncertain, there's a risk that actual costs could significantly exceed initial estimates. If the government's oversight and cost-monitoring are insufficient, the contractor might have less incentive to control expenses compared to fixed-price contracts. Conversely, the fixed fee provides the contractor with a defined profit margin, which can incentivize them to complete the work efficiently to avoid cost overruns that might erode their overall return. Effective management, clear milestones, and robust auditing are crucial to mitigate these risks.

What is the strategic importance of C2BMC systems in the context of US missile defense?

Command and Control, Battle Management, and Communications (C2BMC) systems are the central nervous system of the U.S. missile defense architecture. Their strategic importance lies in their ability to integrate data from a diverse array of sensors (ground-based, sea-based, space-based radars, infrared satellites) and provide a unified, real-time picture of the battlespace. C2BMC enables commanders to make rapid, informed decisions regarding threat identification, tracking, engagement, and battle damage assessment. It facilitates the coordination of defensive assets and ensures seamless communication across different commands and services. Enhancing C2BMC capabilities through R&D, as this contract aims to do, is crucial for maintaining an effective deterrent against evolving ballistic missile threats and ensuring the protection of U.S. interests and allies.

How has spending on missile defense R&D evolved over the past decade?

Spending on missile defense R&D has generally remained a significant priority for the Department of Defense over the past decade, reflecting the persistent and evolving nature of ballistic missile threats. While specific budget allocations fluctuate based on strategic priorities, technological advancements, and perceived threat levels, overall investment has been substantial. The Missile Defense Agency (MDA) consistently receives billions of dollars annually, a portion of which is dedicated to research, development, testing, and evaluation (RDT&E). This includes funding for developing new interceptor technologies, enhancing sensor capabilities, improving command and control systems like C2BMC, and exploring innovative defensive strategies. Trends may show shifts towards more mature technologies for deployment versus early-stage research, or increased focus on specific threat regions or types of missiles, but the underlying commitment to advancing missile defense capabilities through R&D has been a constant.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1555 N NEWPORT RD, COLORADO SPRINGS, CO, 80916

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: $99,139,728

Exercised Options: $99,139,728

Current Obligation: $98,844,015

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9500110D0001

IDV Type: IDC

Timeline