DoD awards Northrop Grumman $34.7M for electronics and communication equipment development, spanning over 3 years

Contract Overview

Contract Amount: $34,764,306 ($34.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2004-06-29

End Date: 2008-01-03

Contract Duration: 1,283 days

Daily Burn Rate: $27.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE

Sector: Defense

Official Description: 200409!000154!5700!GU04 !ASC/GR !FA862504C6451 !A!N! !N! ! !20040629!20061231!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 HICKS RD !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK !ILLINOIS !+000007676000!N!N!000032049632!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!V!2!004!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $34.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200409!000154!5700!GU04 !ASC/GR !FA862504C6451 !A!N! !N! ! !20040629!20061231!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 HICKS RD !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK… Key points: 1. Contract awarded for research, development, testing, and evaluation (RDT&E) of electronics and communication equipment. 2. Northrop Grumman Systems Corporation, a major defense contractor, secured this award. 3. The contract type is Cost Plus Incentive Fee (CPIF), indicating shared risk and reward. 4. Performance period spans over three years, suggesting a medium-term project. 5. The award falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 6. Geographic location of the contractor is Illinois.

Value Assessment

Rating: fair

The contract value of $34.7 million for a period of approximately 3.5 years (from June 2004 to January 2008) appears reasonable for RDT&E in the defense sector. However, without specific deliverables or performance metrics, a precise value-for-money assessment is challenging. The Cost Plus Incentive Fee (CPIF) structure suggests an attempt to control costs by incentivizing the contractor to meet certain targets, but the final cost can vary. Benchmarking against similar RDT&E contracts for electronics and communication equipment would provide a clearer picture of its competitiveness.

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 presence of four bids suggests a competitive environment, which is generally favorable for price discovery and innovation. The specific details of the competition, such as the evaluation criteria and the number of proposals received, are not fully detailed here, but the 'full and open' designation implies a robust process.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers as it encourages multiple companies to offer their best terms to win the contract.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advanced electronics and communication equipment. The contract supports the development and manufacturing of critical systems for defense applications. The geographic impact is primarily in Illinois, where Northrop Grumman Systems Corporation is located, potentially creating or sustaining jobs in that region. The contract contributes to the technological advancement within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can sometimes lead to higher final costs if targets are not met or if scope creep occurs.
The duration of the contract (over 3 years) requires ongoing oversight to ensure performance and adherence to objectives.
Specific details on performance metrics and deliverables are not provided, making it difficult to fully assess project success.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contract involves RDT&E, indicating investment in future technological capabilities.
Northrop Grumman is a well-established defense contractor with significant experience in this domain.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on the manufacturing and development of electronics and communication equipment. This sub-sector is characterized by high R&D investment, long product development cycles, and stringent performance requirements. The market size for such specialized defense electronics is substantial, driven by continuous modernization needs of military forces globally. Comparable spending benchmarks would involve looking at other RDT&E contracts for similar systems awarded by the DoD or other defense agencies.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the nature of the work and the prime contractor, it is likely that any small business involvement would be through subcontracting opportunities. The extent of small business participation and subcontracting plans would need further investigation to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, quality, and compliance. Accountability measures are inherent in the Cost Plus Incentive Fee structure, which links contractor profit to performance outcomes. Transparency is generally maintained through contract reporting requirements, though detailed public access to RDT&E specifics can be limited due to national security considerations. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Electronics Manufacturing
Communication Systems Development
Research, Development, Testing, and Evaluation (RDT&E)
Northrop Grumman Defense Contracts

Risk Flags

Cost Plus Incentive Fee contract type requires careful monitoring of performance metrics and cost controls.
RDT&E contracts inherently carry risks related to technological feasibility and achieving desired outcomes.
Longer contract durations necessitate sustained oversight to ensure continued alignment with program goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200409!000154!5700!GU04 !ASC/GR !FA862504C6451 !A!N! !N! ! !20040629!20061231!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 HICKS RD !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK !ILLINOIS !+000007676000!N!N!000032049632!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !999

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 $34.8 million.

What is the period of performance?

Start: 2004-06-29. End: 2008-01-03.

What specific electronic and communication systems were developed under this contract?

The provided data indicates the contract was for 'ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV' under NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing). While the specific systems are not detailed, this suggests work related to the engineering, manufacturing, and development of advanced electronic and communication equipment for defense applications. This could encompass a wide range of technologies, from radar and sensor systems to secure communication devices and navigation aids. Further details would likely be found in the contract's statement of work or technical exhibits, which are not publicly available in this dataset.

How did Northrop Grumman's past performance influence this award?

While the provided data confirms Northrop Grumman Systems Corporation as the contractor, it does not include specific details about their past performance evaluation for this particular contract. However, as a major defense contractor with extensive experience in electronics and communication systems, it is reasonable to assume that their track record, technical capabilities, and prior successful contract completions were significant factors in the award decision. Government agencies typically conduct thorough past performance reviews as part of the source selection process to assess a contractor's likelihood of success on a new requirement. The fact that they were awarded a Cost Plus Incentive Fee contract suggests a level of trust in their ability to manage complex development projects.

What were the key performance metrics and incentive targets for this contract?

The data indicates this contract was a Cost Plus Incentive Fee (CPIF) type, which means the final fee (profit) is adjusted based on the contractor's performance against pre-defined targets. However, the specific performance metrics and incentive targets are not detailed in the provided summary data. These would typically be outlined in the contract's Statement of Work (SOW) and negotiated between the government and Northrop Grumman. Common metrics in RDT&E contracts include meeting technical specifications, achieving performance milestones, adhering to schedules, and managing costs. The incentive structure would have been designed to motivate the contractor to excel in these areas, rewarding them for exceeding expectations and potentially penalizing them for falling short.

How does the $34.7 million award compare to similar RDT&E contracts for electronics and communication equipment?

Comparing the $34.7 million award requires context regarding the scope, duration, and complexity of the specific RDT&E effort. For a period of over three years (June 2004 - January 2008), this value is within a plausible range for developing advanced electronics and communication equipment for defense applications. However, without knowing the exact deliverables, technological sophistication, and the number of bids received, a precise benchmark is difficult. Larger, more complex programs involving cutting-edge technology or extensive system integration could easily exceed this amount, while smaller, more focused development efforts might be valued lower. A comprehensive analysis would involve comparing this contract's value against other DoD RDT&E contracts awarded around the same period for similar types of equipment and services.

What is the historical spending trend for electronics and communication equipment development within the Department of Defense?

The provided data represents a single contract award from 2004. To understand historical spending trends for electronics and communication equipment development within the Department of Defense, a much broader dataset encompassing multiple years and numerous contracts would be necessary. Generally, DoD spending in this area is substantial and fluctuates based on geopolitical conditions, technological advancements, and strategic priorities. Historically, the DoD has consistently invested heavily in RDT&E for advanced communication and electronic warfare capabilities to maintain a technological edge. Analyzing trends would involve examining annual budget allocations for RDT&E, specific program funding levels, and the aggregate value of contracts awarded in this category over time.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE (V)

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 600 HICKS RD, ROLLING MEADOW, IL

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline