DoD's $1.9B Missile Defense R&D Contract to Northrop Grumman Raises Competition Concerns
Contract Overview
Contract Amount: $1,926,774,531 ($1.9B)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2002-04-18
End Date: 2023-12-31
Contract Duration: 7,927 days
Daily Burn Rate: $243.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: 200208!000056!5700!CZ39 !SMC/PKZ LOS ANGELES AFB !F0470102C0009 !A!N! !N! !20020418!20100930!008324949!008324949!004179453!N!TRW INC !1 SPACE PARK BLVD !REDONDO BEACH !CA!90278!60018!037!06!REDONDO BEACH !LOS ANGELES !CALIFORNIA!+000010000000!N!N!000665000000!AC22!RDTE/MISSILE AND SPACE SYSTEMS-APPLIED RESEARCH !A2 !MISSILE AND SPACE SYSTEMS !3000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !1! ! ! ! ! !99990909!B! ! !N!A!D!N!R!1!001!N!2A!A!Y!Z! ! !N!C!N! ! ! !A!Z!A!A!000!A!C!N! ! ! !Y! ! !0001!
Place of Performance
Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278
Plain-Language Summary
Department of Defense obligated $1.93 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200208!000056!5700!CZ39 !SMC/PKZ LOS ANGELES AFB !F0470102C0009 !A!N! !N! !20020418!20100930!008324949!008324949!004179453!N!TRW INC !1 SPACE PARK BLVD !REDONDO BEACH !CA!90278!60018!037!06!REDONDO BEACH !LOS ANGELES !CALIFORNIA!+000010000000!N!N!000665000000!AC22!RDTE/MISSILE AN… Key points: 1. Significant investment in missile defense R&D highlights critical national security sector. 2. Sole-source award to Northrop Grumman warrants scrutiny regarding price discovery and value. 3. Long contract duration (18+ years) poses risks of cost overruns and evolving technological relevance. 4. Focus on applied research suggests potential for innovation but also uncertainty in outcomes.
Value Assessment
Rating: questionable
The contract value of $1.9 billion over 18 years is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value for R&D services in the missile defense sector.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for a contract of this magnitude means taxpayers may not be receiving the best possible value, potentially funding inflated costs.
Public Impact
Taxpayers are funding advanced research in missile defense, a critical area for national security. The long-term nature of the contract suggests a sustained commitment to developing and improving defense capabilities. Potential for technological advancements that could enhance U.S. security against missile threats. The significant investment could stimulate innovation within the aerospace and defense industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Long contract duration increases risk of cost escalation and obsolescence.
- Lack of transparency in 'NOT DISCERNABLE OR CLASSIFIED' cost details.
- Potential for contractor lock-in due to specialized nature of R&D.
Positive Signals
- Addresses critical national security need for missile defense.
- Invests in advanced R&D for technological superiority.
- Potential for significant breakthroughs in defense capabilities.
Sector Analysis
This contract falls within the Research and Development sector, specifically applied research for missile and space systems. Spending in this area is often characterized by long lead times, high uncertainty, and significant government oversight requirements.
Small Business Impact
The data indicates this is a large prime contract awarded to Northrop Grumman Systems Corporation. There is no information provided regarding subcontracting opportunities for small businesses on this specific award.
Oversight & Accountability
Given the sole-source nature and long duration, robust oversight from the Department of Defense and the Missile Defense Agency is crucial to ensure cost control, performance, and adherence to research objectives.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Long contract duration (18+ years) increases risk of cost overruns and obsolescence.
- Potential for 'scope creep' in R&D projects.
- Classified or 'not discernible' cost details hinder transparency.
- Sole-source awards can reduce incentive for innovation and efficiency.
Tags
research-and-development-in-the-physical, department-of-defense, ca, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.93 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200208!000056!5700!CZ39 !SMC/PKZ LOS ANGELES AFB !F0470102C0009 !A!N! !N! !20020418!20100930!008324949!008324949!004179453!N!TRW INC !1 SPACE PARK BLVD !REDONDO BEACH !CA!90278!60018!037!06!REDONDO BEACH !LOS ANGELES !CALIFORNIA!+000010000000!N!N!000665000000!AC22!RDTE/MISSILE AND SPACE SYSTEMS-APPLIED RESEARCH !A2 !MISSILE AND SPACE SYSTEMS !3000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !1! ! ! ! ! !99990909!B! ! !N!A!D!N!R!1!001!N!2A!A!Y!Z! ! !N!C!N! ! ! !A!Z!A!A!000!A!C!N! ! ! !Y! ! !0001!
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 $1.93 billion.
What is the period of performance?
Start: 2002-04-18. End: 2023-12-31.
What specific technological advancements or capabilities are expected from this $1.9 billion R&D investment over its 18-year lifespan?
The contract focuses on 'Research and Development in Physical, Engineering, and Life Sciences' for missile and space systems. Specific expected advancements are classified or not discernible from the provided data. However, typical goals in this domain include enhancing threat detection, intercept capabilities, and overall system resilience against evolving missile technologies.
How does the Missile Defense Agency justify the sole-source award and the $1.9 billion price tag without competitive bidding?
Justification for sole-source awards typically involves factors like unique capabilities, urgency, or prior development. The agency likely asserts that Northrop Grumman possesses unique expertise or intellectual property essential for this specific missile defense R&D, making competition impractical or detrimental to national security objectives. The $1.9 billion reflects estimated costs over 18 years.
What mechanisms are in place to ensure the effectiveness and relevance of the R&D outcomes given the long contract duration and potential for rapid technological change?
Effectiveness is typically managed through phased reviews, milestone-based payments, and performance metrics defined in the Cost Plus Award Fee structure. Regular technical reviews and potential contract modifications are essential to adapt to evolving threats and technological landscapes, ensuring the R&D remains relevant throughout its extended period.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1 SPACE PARK BLVD, REDONDO BEACH, CA, 90278
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $85,712,962
Exercised Options: $84,694,693
Current Obligation: $1,926,774,531
Actual Outlays: $6,436,472
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2002-04-18
Current End Date: 2023-12-31
Potential End Date: 2023-12-31 00:00:00
Last Modified: 2024-09-30
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