Air Force awards Northrop Grumman $17.5M for strategic automated command and control systems sustainment

Contract Overview

Contract Amount: $17,553,113 ($17.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-09-01

End Date: 2026-08-31

Contract Duration: 1,825 days

Daily Burn Rate: $9.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: GROUND SUBSYSTEMS SUPPORT CONTRACT (GSSC) 2.0 - STRATEGIC AUTOMATED COMMAND CONTROL SYSTEMS (SACCS) SUSTAINMENT

Place of Performance

Location: HILL AFB, DAVIS County, UTAH, 84056

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $17.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GROUND SUBSYSTEMS SUPPORT CONTRACT (GSSC) 2.0 - STRATEGIC AUTOMATED COMMAND CONTROL SYSTEMS (SACCS) SUSTAINMENT Key points: 1. Contract focuses on sustainment of critical command and control systems, indicating a need for ongoing operational support. 2. The award is a delivery order under a larger contract, suggesting a phased approach to procurement or a framework agreement. 3. The contract type is Cost Plus Award Fee (CPAF), which incentivizes contractor performance but requires careful oversight to manage costs. 4. The duration of the contract is five years, aligning with long-term sustainment needs for complex defense systems. 5. The absence of small business set-asides suggests the primary contractor is a large entity, with potential for subcontracting opportunities. 6. The contract is for engineering services, highlighting the technical expertise required for maintaining advanced defense infrastructure.

Value Assessment

Rating: fair

The contract value of $17.5 million over five years for sustainment of strategic automated command and control systems appears reasonable given the critical nature of the services. However, without specific benchmarks for similar systems or detailed cost breakdowns, a definitive value-for-money assessment is challenging. The Cost Plus Award Fee (CPAF) structure allows for performance incentives but necessitates robust government oversight to ensure costs remain controlled and that award fees are justified by exceptional performance. Comparing this to other large-scale defense IT sustainment contracts would provide better context.

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 had the opportunity to submit proposals. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. The Air Force's approach suggests they sought the best available solution through a broad solicitation process.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and high-quality services, preventing potential cost overruns associated with less competitive procurement methods.

Public Impact

The primary beneficiaries are the Department of the Air Force and the broader U.S. strategic command, ensuring the operational readiness of critical command and control systems. The services delivered include sustainment, maintenance, and potentially upgrades for the Strategic Automated Command and Control Systems (SACCS). The geographic impact is likely focused on facilities and personnel involved in operating and maintaining the SACCS, potentially across multiple secure locations. Workforce implications include the need for highly skilled engineers and technicians, both within the prime contractor and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) contract type requires diligent oversight to prevent cost creep and ensure award fees are tied to demonstrable performance improvements.
Lack of specific details on the number of bidders in the full and open competition makes it difficult to fully assess the competitive intensity.
The critical nature of SACCS means any performance degradation or security lapse could have significant national security implications.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process aimed at achieving best value.
The five-year duration indicates a commitment to long-term system stability and support, crucial for strategic assets.
Northrop Grumman's established presence in defense contracting suggests a high likelihood of possessing the necessary expertise for this complex system.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related IT and command and control infrastructure. The market for defense IT sustainment is substantial, characterized by long-term contracts, high barriers to entry due to security and technical requirements, and a concentration of large, established aerospace and defense contractors. Spending in this area is driven by the need to maintain aging critical systems and adapt to evolving technological and threat landscapes. Comparable spending benchmarks would typically involve other large-scale sustainment contracts for complex defense systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the prime contract was awarded to a large business, Northrop Grumman Systems Corporation. While there is no direct small business set-aside, large defense contracts often involve significant subcontracting opportunities. It is possible that smaller businesses could be involved in providing specialized services or components under subcontract to Northrop Grumman, contributing to the broader small business ecosystem within the defense industrial base.

Oversight & Accountability

Oversight for this Cost Plus Award Fee (CPAF) contract will likely be managed by the Department of the Air Force contracting and program management offices. Key accountability measures will involve monitoring cost expenditures against the base fee and target cost, evaluating performance against defined award criteria, and ensuring compliance with contract terms. Transparency is typically managed through regular reporting requirements from the contractor. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
Air Force Command and Control Systems
Strategic Nuclear Deterrence Systems Support
DoD Enterprise IT Infrastructure

Risk Flags

Cost Plus Award Fee (CPAF) requires diligent oversight.
Critical defense system sustainment carries inherent security risks.
Limited public data on specific performance metrics or competition details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GROUND SUBSYSTEMS SUPPORT CONTRACT (GSSC) 2.0 - STRATEGIC AUTOMATED COMMAND CONTROL SYSTEMS (SACCS) SUSTAINMENT

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 $17.6 million.

What is the period of performance?

Start: 2021-09-01. End: 2026-08-31.

What is Northrop Grumman's track record with similar command and control system sustainment contracts for the Department of Defense?

Northrop Grumman has a long and extensive history of supporting complex defense systems, including command, control, communications, computers, and intelligence (C4I) systems for the Department of Defense. They are a major prime contractor for various strategic programs, such as the B-2 bomber, E-2D Hawkeye, and various missile defense systems. Their experience often includes sustainment, modernization, and integration of these critical platforms. While specific details on past SACCS sustainment contracts are not provided here, their overall portfolio demonstrates significant capability in managing large, high-stakes defense programs requiring long-term support and technical expertise. Past performance reviews and contract awards from agencies like the Air Force and Navy would offer more granular insights into their specific performance metrics on similar sustainment efforts.

How does the $17.5 million contract value compare to industry benchmarks for similar IT sustainment services?

Benchmarking the $17.5 million contract value for the Ground Subsystems Support Contract (GSSC) 2.0 requires context regarding the scope and criticality of the Strategic Automated Command and Control Systems (SACCS). For large-scale, mission-critical defense IT sustainment, this figure over five years (approximately $3.5 million annually) is not exceptionally high, especially considering the specialized nature of command and control systems. Industry benchmarks for sustainment of complex defense platforms can range from single-digit percentages of the system's acquisition cost annually to much higher figures for highly sensitive or rapidly evolving systems. Without knowing the total system value or specific sustainment requirements (e.g., 24/7 operations, cybersecurity mandates, hardware refresh cycles), a precise comparison is difficult. However, compared to broader IT services contracts, this likely represents a higher cost per unit due to the specialized security and operational requirements inherent in SACCS.

What are the primary risks associated with this Cost Plus Award Fee (CPAF) contract structure?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract structure revolve around cost control and performance measurement. For the government, the risk is that costs could escalate beyond initial projections if the contractor's spending is not closely monitored and justified. The 'award fee' component, designed to incentivize superior performance, can also be a risk if the criteria for earning the fee are not clearly defined, measurable, and objectively assessed, potentially leading to disputes or unwarranted bonus payments. Conversely, the contractor faces the risk of not achieving the performance targets necessary to earn the award fee, impacting their overall profit margin. Effective risk mitigation requires robust government oversight, clear performance metrics, and regular communication between the contracting parties.

What is the historical spending pattern for SACCS sustainment, and how does this award fit within that trend?

Historical spending data for SACCS sustainment prior to this GSSC 2.0 award is not provided in the given data. However, the duration of the contract (2021-2026) and its value suggest a continuation or evolution of previous sustainment efforts. Typically, sustainment spending for critical defense systems like SACCS is relatively stable year-over-year, barring major upgrades or system replacements. This award, valued at approximately $3.5 million annually, likely represents a consistent level of investment required to maintain the operational readiness and security of these vital command and control assets. Without prior data, it's impossible to definitively state if this award represents an increase, decrease, or stable trend in spending, but it indicates a sustained commitment to the system's lifecycle support.

What are the potential implications of this contract on the cybersecurity posture of the SACCS?

This contract for sustainment of the Strategic Automated Command and Control Systems (SACCS) has significant implications for cybersecurity. The contractor, Northrop Grumman, is responsible for maintaining the system's integrity, which inherently includes addressing cybersecurity vulnerabilities. This likely involves implementing security patches, monitoring for threats, responding to incidents, and ensuring compliance with stringent DoD cybersecurity standards. The CPAF structure could incentivize the contractor to proactively identify and remediate vulnerabilities to earn award fees. However, the complexity and criticality of SACCS mean that any cybersecurity lapse could have severe consequences. Therefore, rigorous government oversight of the contractor's cybersecurity practices and performance is paramount to ensure the system's resilience against evolving cyber threats.

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 AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 6006 WARDLEIGH RD BLDG 1575, HILL AIR FORCE BASE, UT, 84056

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,559,542

Exercised Options: $17,559,542

Current Obligation: $17,553,113

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $133,461

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821421D0002

IDV Type: IDC

Timeline