Northrop Grumman awarded $44.4M for ICBM software sustainment, highlighting long-term defense infrastructure needs
Contract Overview
Contract Amount: $44,351,845 ($44.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-09-28
End Date: 2020-09-29
Contract Duration: 1,097 days
Daily Burn Rate: $40.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF ENGINEERING SERVICES IN SUPPORT OF ICBM OPERATIONAL SOFTWARE SUSTAINMENT PROGRAM (IOSSP)
Place of Performance
Location: HILL AFB, DAVIS County, UTAH, 84056
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $44.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF ENGINEERING SERVICES IN SUPPORT OF ICBM OPERATIONAL SOFTWARE SUSTAINMENT PROGRAM (IOSSP) Key points: 1. Contract value represents a significant investment in maintaining critical missile systems. 2. Sole contractor for this specific sustainment program indicates specialized capabilities. 3. Long contract duration suggests a stable, ongoing requirement for these services. 4. Focus on software sustainment points to the increasing importance of digital infrastructure in defense. 5. Geographic concentration in Utah may reflect existing defense installation presence.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable sustainment contracts. The Cost Plus Fixed Fee (CPFF) pricing structure can lead to cost overruns if not managed tightly. However, the fixed fee component provides some cost certainty for the contractor's effort. The total award amount of $44.4 million over three years for specialized software sustainment of ICBMs appears within a reasonable range for such critical national security systems, though detailed cost breakdowns are needed for a definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation implies a competitive process was initiated. This approach is generally favored to ensure the government receives the best value through market forces. The existence of competition, even if only one awardee was ultimately selected, should theoretically drive more favorable pricing and service offerings.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it aims to secure competitive pricing and encourage innovation from a wider pool of potential contractors, ultimately leading to more efficient use of public funds.
Public Impact
The primary beneficiaries are the Department of Defense and national security, ensuring the operational readiness of Intercontinental Ballistic Missiles (ICBMs). Services delivered include crucial software sustainment, maintenance, and potentially upgrades for the ICBM operational software. The geographic impact is concentrated in Utah, likely due to the presence of Hill Air Force Base and associated ICBM facilities. Workforce implications include the employment of specialized software engineers, cybersecurity professionals, and technical support staff within Northrop Grumman.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require diligent oversight to prevent scope creep and ensure the fixed fee remains appropriate.
- Long-term sustainment contracts can sometimes lead to vendor lock-in if not managed with future competition in mind.
- Reliance on a single contractor for critical software sustainment could pose a risk if the contractor faces financial or operational difficulties.
Positive Signals
- Awarded under full and open competition, indicating a robust initial selection process.
- Northrop Grumman is a major defense contractor with extensive experience in complex systems integration and sustainment.
- The contract addresses a critical national security need, ensuring the reliability of strategic deterrent forces.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for maintaining complex, long-lifecycle weapon systems. The market for defense sustainment services is substantial, driven by the ongoing need to keep aging platforms operational and secure. Comparable spending benchmarks would typically involve other large-scale sustainment contracts for critical military hardware, where specialized software and systems engineering are paramount. The total contract value of $44.4 million over three years is significant but aligns with the high costs associated with maintaining strategic assets.
Small Business Impact
This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. Northrop Grumman, the prime contractor, is a large aerospace and defense corporation. While the prime contract is not set aside, there may be opportunities for small businesses to participate as subcontractors to Northrop Grumman, depending on the specific technical requirements and the company's subcontracting plan. The overall impact on the small business ecosystem would depend on the extent to which small businesses are engaged in the supply chain for this contract.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to monitor costs against the fixed fee and ensure the government receives fair value. Transparency is typically managed through contract reporting mechanisms and performance reviews. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- ICBM Sustainment Programs
- Aerospace Engineering Services
- Defense Software Development
- Strategic Weapons Systems Maintenance
- Northrop Grumman Defense Contracts
Risk Flags
- Potential for cost overruns under CPFF structure
- Cybersecurity risks associated with critical software
- Long-term reliance on a single contractor
- Challenges in maintaining legacy systems
Tags
defense, icbm, software-sustainment, northrop-grumman, department-of-defense, cost-plus-fixed-fee, full-and-open-competition, utah, missile-systems, engineering-services, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF ENGINEERING SERVICES IN SUPPORT OF ICBM OPERATIONAL SOFTWARE SUSTAINMENT PROGRAM (IOSSP)
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $44.4 million.
What is the period of performance?
Start: 2017-09-28. End: 2020-09-29.
What is Northrop Grumman's track record with similar ICBM sustainment contracts?
Northrop Grumman has a long and established history with the U.S. Air Force's ICBM programs, including significant roles in sustainment and modernization efforts. They have been a key contractor for various aspects of the Minuteman III system, which is the current ICBM fleet. Their involvement often spans system integration, software development, hardware maintenance, and lifecycle support. This specific contract for the Operational Software Sustainment Program (IOSSP) builds upon that extensive experience. While specific performance metrics for past contracts are often classified or not publicly detailed, Northrop Grumman's continued selection for these critical roles suggests a consistent ability to meet the demanding requirements of maintaining strategic nuclear deterrent capabilities. Their deep institutional knowledge of these complex systems is a significant factor in their ongoing role.
How does the $44.4 million award compare to historical spending on ICBM software sustainment?
Comparing the $44.4 million award for this specific three-year period (2017-2020) to historical spending on ICBM software sustainment requires a nuanced view. ICBM sustainment is a continuous, multi-year effort involving numerous contracts for different components and services. The total lifecycle cost for maintaining the ICBM force runs into billions of dollars over decades. This $44.4 million represents a portion of that larger investment, specifically focused on software sustainment for the operational systems. Annual spending can fluctuate based on modernization needs, obsolescence issues, and threat assessments. Without access to detailed historical budgets for the IOSSP or comparable software sustainment programs, a direct year-over-year comparison is difficult. However, the figure appears consistent with the specialized and high-stakes nature of maintaining strategic nuclear weapon systems, where software integrity is paramount.
What are the primary risks associated with this contract and Northrop Grumman's performance?
The primary risks associated with this contract revolve around the critical nature of the systems being sustained and the potential for technical challenges. Software sustainment for ICBMs involves ensuring the reliability, security, and operational readiness of highly complex and sensitive systems. Risks include potential cybersecurity vulnerabilities, the discovery of unforeseen software defects, integration issues with evolving hardware, and the challenges of maintaining legacy systems with potentially outdated codebases. For Northrop Grumman, risks include meeting stringent performance requirements under a Cost Plus Fixed Fee (CPFF) contract, managing costs effectively to stay within the fixed fee's bounds for effort, and ensuring adequate staffing with specialized expertise. Delays or failures in software sustainment could have significant national security implications, impacting the readiness of the U.S. strategic deterrent.
How effective is the Cost Plus Fixed Fee (CPFF) contract type for ensuring program effectiveness in defense software sustainment?
The Cost Plus Fixed Fee (CPFF) contract type aims to balance cost control with the need for contractor effort in complex, uncertain environments like defense software sustainment. The 'cost plus' element allows the contractor to recover allowable costs incurred, while the 'fixed fee' provides a predetermined profit margin. This structure is often used when the scope of work cannot be precisely defined at the outset, or when significant research and development or sustainment efforts are involved, making it difficult to estimate costs accurately. For program effectiveness, CPFF can incentivize the contractor to perform the necessary work to achieve the objectives, as their fee is fixed regardless of the final cost (within allowable limits). However, it requires robust government oversight to ensure costs are reasonable and allocable, and that the fixed fee remains appropriate for the effort. Without strong oversight, there's a risk of cost overruns and potential inefficiencies if the contractor is not adequately motivated to control expenses beyond their fee.
What are the implications of this contract being awarded to a single, large contractor like Northrop Grumman?
Awarding a critical sustainment contract to a single, large contractor like Northrop Grumman has several implications. Positively, it leverages the contractor's extensive experience, established infrastructure, and deep knowledge base specific to the ICBM program, potentially leading to efficient and reliable sustainment. Northrop Grumman's size and resources can also ensure stability and long-term commitment to the program. However, relying on a sole provider can reduce competitive pressure, potentially leading to higher costs in future contract renewals if not carefully managed. It also concentrates risk; any performance issues, financial instability, or strategic shifts by Northrop Grumman could directly impact the ICBM sustainment program. Furthermore, it may limit opportunities for smaller, innovative companies to enter the market and contribute specialized solutions.
How does the geographic concentration in Utah impact the execution and oversight of this contract?
The geographic concentration of this contract's execution in Utah is likely tied to the significant presence of the U.S. Air Force's ICBM operations and sustainment infrastructure, particularly at Hill Air Force Base. This proximity can facilitate closer collaboration between the government contracting officers, program managers, and Northrop Grumman's technical teams. It allows for more direct oversight, easier site visits, and potentially quicker resolution of issues. However, it also concentrates the risk associated with the program's execution and sustainment within a specific region. Oversight bodies like the Defense Contract Management Agency (DCMA) would likely have a dedicated presence or regional focus to monitor activities in Utah. While proximity can enhance oversight efficiency, it does not negate the need for rigorous performance monitoring and financial controls regardless of location.
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: $61,658,026
Exercised Options: $46,553,487
Current Obligation: $44,351,845
Subaward Activity
Number of Subawards: 60
Total Subaward Amount: $86,981,945
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: 2017-09-28
Current End Date: 2020-09-29
Potential End Date: 2020-09-29 00:00:00
Last Modified: 2022-08-09
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