DoD's $48.7M Northrop Grumman Contract for SACCS-R Program Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $48,740,034 ($48.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2016-08-01
End Date: 2023-07-30
Contract Duration: 2,554 days
Daily Burn Rate: $19.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT::IGF GROUND SUSTAINMENT SUPPORT CONTRACT (GSSC) TASK ORDER FOR THE STRATEGIC AUOTMATED COMMAND AND CONTROL REPLACEMENT PROGRAM (SACCS-R) PRE-EMD PHASE.
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $48.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF GROUND SUSTAINMENT SUPPORT CONTRACT (GSSC) TASK ORDER FOR THE STRATEGIC AUOTMATED COMMAND AND CONTROL REPLACEMENT PROGRAM (SACCS-R) PRE-EMD PHASE. Key points: 1. The contract awarded to Northrop Grumman for the SACCS-R program represents a significant investment in strategic command and control systems. 2. While awarded under full and open competition, the cost-plus-fixed-fee structure warrants close examination for potential cost overruns. 3. The long duration of the contract (2016-2023) suggests a complex, multi-phase project with inherent risks. 4. Engineering services (NAICS 541330) are critical for defense modernization, but require rigorous oversight to ensure value for money.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed tightly. Benchmarking against similar engineering services contracts for complex defense systems is crucial to assess if the $48.7M price tag represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the CPFF structure means the final price is not fixed upfront, potentially impacting the effectiveness of competitive pressure on costs.
Taxpayer Impact: Taxpayer funds are being utilized for a critical defense modernization program. Ensuring cost efficiency and program success is paramount to maximizing the return on this investment.
Public Impact
Modernization of the Strategic Automated Command and Control Replacement Program (SACCS-R) is vital for national security. The contract supports advanced engineering services, potentially leading to technological advancements in defense. Long-term contracts like this can provide stability for contractors but require sustained government oversight to ensure performance and cost control.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure
- Long contract duration
- Potential for cost overruns
Positive Signals
- Awarded under full and open competition
- Critical defense modernization program
Sector Analysis
This contract falls within the Engineering Services sector, which is a significant area of government spending, particularly for defense. Benchmarks for similar large-scale, long-duration defense system development contracts are essential for evaluating cost-effectiveness.
Small Business Impact
There is no indication in the provided data that small businesses were involved as prime contractors or significant subcontractors on this specific contract. Further analysis would be needed to determine any small business participation.
Oversight & Accountability
The long duration and CPFF nature of this contract necessitate robust oversight from the Department of Defense to monitor progress, control costs, and ensure the contractor meets all performance requirements. Regular audits and performance reviews are critical.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Long contract duration may indicate complexity or delays
- Lack of transparency on specific deliverables and performance metrics
- Need for robust ongoing oversight
Tags
engineering-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::CT::IGF GROUND SUSTAINMENT SUPPORT CONTRACT (GSSC) TASK ORDER FOR THE STRATEGIC AUOTMATED COMMAND AND CONTROL REPLACEMENT PROGRAM (SACCS-R) PRE-EMD PHASE.
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 $48.7 million.
What is the period of performance?
Start: 2016-08-01. End: 2023-07-30.
What specific engineering services were rendered under this contract, and how do they align with the SACCS-R program's objectives?
The contract focused on engineering services for the Pre-EMD phase of the SACCS-R program. This likely involved system design, requirements definition, feasibility studies, and initial prototyping to lay the groundwork for the full system development. The services are directly aligned with replacing outdated command and control infrastructure to enhance strategic capabilities.
Given the CPFF structure, what mechanisms are in place to mitigate the risk of cost overruns and ensure the government receives good value?
The government employs several mechanisms, including detailed cost tracking, performance metrics, and milestone reviews. The fixed-fee component provides some incentive for the contractor to manage costs efficiently. However, continuous oversight, potential audits, and clear contract modifications are crucial to prevent uncontrolled cost escalation.
How effective has Northrop Grumman been in delivering the required engineering services within the projected timelines and budget constraints of this contract?
Assessing effectiveness requires access to performance reports, milestone completion data, and any documented issues or delays. While the contract duration is long, the government's oversight should provide insights into the contractor's performance. Without specific performance data, a definitive judgment on effectiveness cannot be made, but the long duration and CPFF structure suggest ongoing monitoring is essential.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $66,836,280
Exercised Options: $66,836,280
Current Obligation: $48,740,034
Actual Outlays: $3,995,804
Subaward Activity
Number of Subawards: 233
Total Subaward Amount: $65,463,279
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA821415D0001
IDV Type: IDC
Timeline
Start Date: 2016-08-01
Current End Date: 2023-07-30
Potential End Date: 2023-12-15 00:00:00
Last Modified: 2024-01-25
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