DoD's $37.7M Northrop Grumman contract for antenna couplers shows fair value with potential for cost efficiencies
Contract Overview
Contract Amount: $37,750,976 ($37.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2016-09-30
End Date: 2021-09-30
Contract Duration: 1,826 days
Daily Burn Rate: $20.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IGF::OT::IGF ENGINEERING SERVICES ANTENNA COUPLER
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $37.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF ENGINEERING SERVICES ANTENNA COUPLER Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. Cost-plus incentive fee structure incentivizes contractor performance and cost control. 3. Duration of 1826 days indicates a long-term need for these specialized engineering services. 4. Northrop Grumman's extensive experience in defense contracting suggests a capable provider. 5. The contract's value is moderate within the broader context of defense procurement. 6. Potential for cost savings exists through the incentive fee mechanism.
Value Assessment
Rating: fair
The contract's total value of $37.7 million over five years averages approximately $7.5 million annually. While specific benchmarks for antenna coupler engineering services are difficult to pinpoint without more granular data, the cost-plus incentive fee (CPIF) structure suggests an effort to manage costs effectively. The contractor, Northrop Grumman, is a major defense contractor with a significant track record, which can sometimes lead to higher pricing but also implies a certain level of reliability and expertise. Further analysis would require comparing the specific technical requirements and performance metrics against similar contracts awarded to other large aerospace and defense firms.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. This competitive process is generally expected to drive prices down and ensure that the government receives the best value. The number of bidders and the specific evaluation criteria would provide a clearer picture of the intensity of the competition. However, the fact that it was not sole-source or limited suggests a healthy market for these services.
Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a market where contractors must offer competitive pricing to win awards, potentially leading to lower overall spending for the government.
Public Impact
The Department of the Air Force benefits from specialized engineering services for critical antenna coupler technology. This contract supports the development and maintenance of advanced communication or radar systems. The geographic impact is primarily within Virginia, where the contractor's facility is located. Workforce implications include employment for engineers and technical specialists at Northrop Grumman.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus incentive fee contracts can sometimes lead to higher final costs if cost targets are not met or if scope creep occurs.
- The long duration of the contract may present challenges in adapting to rapidly evolving technological requirements.
- Reliance on a single large contractor could limit future competition or innovation in this specific niche.
Positive Signals
- Awarded through full and open competition, indicating a competitive bidding process.
- The incentive fee structure aligns contractor and government interests towards cost efficiency.
- Northrop Grumman's established presence and expertise suggest a high likelihood of successful project execution.
Sector Analysis
This contract falls within the Engineering Services sector, specifically related to aerospace and defense systems. The market for specialized engineering services supporting military platforms is substantial, driven by continuous modernization and maintenance requirements. Comparable spending benchmarks would involve analyzing other contracts for similar complex system development and integration services awarded by the Department of Defense and other federal agencies. The size of this contract is moderate within the context of major defense procurements.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the nature of the work and the prime contractor, it is possible that small businesses could be involved as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. Further investigation into subcontracting opportunities would be necessary to assess the extent of small business participation.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. The cost-plus incentive fee structure includes specific performance metrics and cost targets that are monitored to ensure accountability. Transparency is generally maintained through contract reporting mechanisms, although detailed performance data may be sensitive. The Inspector General's office could investigate any allegations of fraud, waste, or abuse.
Related Government Programs
- Defense Engineering Services
- Aerospace Systems Development
- Communication Systems Procurement
- Radar Technology Contracts
- Northrop Grumman Defense Contracts
Risk Flags
- Cost-plus contracts carry inherent risk of cost overruns.
- Long contract duration may pose challenges for adapting to technological advancements.
- Potential for scope creep in complex engineering projects.
Tags
defense, department-of-defense, air-force, engineering-services, northrop-grumman, cost-plus-incentive-fee, delivery-order, full-and-open-competition, virginia, aerospace, antenna-coupler, systems-engineering
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF ENGINEERING SERVICES ANTENNA COUPLER
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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $37.8 million.
What is the period of performance?
Start: 2016-09-30. End: 2021-09-30.
What is Northrop Grumman's track record with similar cost-plus incentive fee contracts within the Department of Defense?
Northrop Grumman has a long history of executing complex defense contracts, many of which utilize various cost-reimbursement structures, including cost-plus incentive fee (CPIF). Their extensive experience suggests a mature understanding of managing such contracts, including establishing realistic cost targets and performance incentives. Historically, CPIF contracts aim to balance the government's need for flexibility in evolving projects with the contractor's motivation to control costs. While specific performance data for individual contracts is often proprietary, Northrop Grumman's overall performance in the defense sector indicates a capacity to meet the requirements of these complex agreements. Their ability to secure and successfully complete numerous large-scale contracts underscores their proficiency in navigating the intricacies of CPIF arrangements, including managing risks and achieving desired outcomes within the defined incentive frameworks.
How does the annual spending on this contract compare to similar engineering services contracts for antenna systems?
The average annual spending of approximately $7.5 million for this antenna coupler engineering services contract is considered moderate within the defense sector. Benchmarking against similar contracts requires access to detailed contract databases and specific technical scopes of work. However, contracts for specialized engineering services supporting complex defense systems can range from a few million to tens or even hundreds of millions of dollars annually, depending on the criticality, technological sophistication, and duration. Given that this contract involves a major defense contractor like Northrop Grumman and supports the Air Force, the annual expenditure aligns with the typical investment in maintaining and advancing sophisticated military hardware. Without direct comparisons of identical services, it's challenging to definitively label it as high or low, but it falls within a plausible range for such specialized technical support.
What are the primary risks associated with this cost-plus incentive fee contract, and how are they mitigated?
The primary risks associated with this cost-plus incentive fee (CPIF) contract include potential cost overruns if the contractor fails to meet cost targets, and the risk that the incentive structure may not perfectly align with all desired outcomes. CPIF contracts inherently carry a risk that the final cost could exceed initial estimates, especially in long-term, technically complex projects where unforeseen challenges may arise. Mitigation strategies typically involve rigorous government oversight of contractor expenditures, detailed performance metrics, and well-defined incentive clauses that reward efficiency and penalize deviations. The contracting officer and program team continuously monitor progress and costs, engaging with the contractor to address issues proactively. Furthermore, the long-term nature of the contract (1826 days) requires careful management of scope to prevent uncontrolled expansion, which could inflate costs beyond the intended scope of the incentive structure.
What is the expected program effectiveness or outcome of these antenna coupler engineering services?
The expected program effectiveness of these antenna coupler engineering services is to ensure the reliable and efficient operation of critical communication, navigation, or radar systems within the Department of the Air Force's platforms. Antenna couplers are essential components that facilitate the transfer of radio frequency energy between an antenna and a transmitter or receiver, impacting signal quality, range, and system performance. By engaging Northrop Grumman for engineering services, the Air Force aims to maintain, upgrade, or develop these couplers to meet evolving operational requirements, enhance system resilience, and potentially improve overall mission effectiveness. Successful outcomes would be measured by the performance of the systems utilizing these couplers, including factors like signal integrity, reduced interference, and system uptime, contributing directly to the Air Force's operational readiness and technological superiority.
How has historical spending on antenna coupler engineering services by the DoD evolved over the past five years?
Analyzing historical spending trends for antenna coupler engineering services specifically within the DoD over the past five years requires access to detailed procurement data that aggregates spending by service, component, and contract type. General trends in defense spending indicate a consistent investment in maintaining and modernizing electronic warfare, communication, and radar systems, which heavily rely on advanced antenna technology. It is plausible that spending in this niche area has remained relatively stable or seen moderate increases, driven by the need to upgrade aging systems and incorporate new technologies. However, without specific data points for this category, it's difficult to provide a precise evolution. The $37.7 million awarded here represents a portion of the broader DoD investment in related systems and engineering support.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $37,750,976
Exercised Options: $37,750,976
Current Obligation: $37,750,976
Subaward Activity
Number of Subawards: 159
Total Subaward Amount: $1,806,134,788
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q14OADU325
IDV Type: IDC
Timeline
Start Date: 2016-09-30
Current End Date: 2021-09-30
Potential End Date: 2021-09-30 00:00:00
Last Modified: 2025-04-26
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