Air Force awards $7.15M contract for LSPR 1.6.5 software development and testing to Northrop Grumman

Contract Overview

Contract Amount: $7,151,043 ($7.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-06

End Date: 2026-07-31

Contract Duration: 693 days

Daily Burn Rate: $10.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: DEVELOPMENT AND TESTING OF LSPR 1.6.5 SOFTWARE FOR MULTIPLE FMS COUNTRIES

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $7.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DEVELOPMENT AND TESTING OF LSPR 1.6.5 SOFTWARE FOR MULTIPLE FMS COUNTRIES Key points: 1. Contract awarded on a cost-plus-incentive-fee basis, allowing for shared risk and reward. 2. The contract is for software development and testing, indicating a focus on system enhancement and validation. 3. Northrop Grumman, a large defense contractor, is the recipient, suggesting established capabilities. 4. The contract duration of 693 days points to a significant development effort. 5. The work is to be performed in Illinois, indicating a domestic focus for this project. 6. This award represents a specific investment in a particular software version (LSPR 1.6.5) for foreign military sales countries.

Value Assessment

Rating: fair

The contract is a cost-plus-incentive fee (CPIF) type, which can lead to cost overruns if not managed carefully. Benchmarking the specific 'LSPR 1.6.5 software' development and testing costs is difficult without more granular data on the scope and complexity. However, the total award of $7.15 million over approximately two years suggests a moderate investment for specialized software development in the defense sector. The CPIF structure implies that the government aims to incentivize efficiency, but the ultimate cost will depend on performance against targets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. Without competition, there is a reduced opportunity for price discovery and potentially higher costs for the government. The justification for a sole-source award would typically involve unique capabilities, proprietary technology, or urgent requirements that only one contractor can meet. The lack of competition here means the government did not explore alternative solutions or pricing from other vendors.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the best possible price for this software development and testing. The government did not leverage market forces to drive down costs.

Public Impact

Foreign military sales countries will benefit from enhanced and tested LSPR 1.6.5 software. The Department of the Air Force will receive updated and validated software for its systems. The contract supports the development and testing of specialized software, crucial for operational readiness. Work performed in Illinois may have implications for the local technology and defense workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential cost inefficiencies and the absence of market-driven pricing.
Cost-plus-incentive fee contracts require diligent oversight to ensure contractor performance and prevent cost overruns.
The specific nature of 'LSPR 1.6.5 software' and its necessity for foreign military sales countries warrants clear justification for a sole-source award.

Positive Signals

Award to Northrop Grumman, a large and experienced defense contractor, suggests a high likelihood of technical capability.
The CPIF contract structure, if managed effectively, can incentivize performance and cost control.
The contract duration indicates a commitment to a thorough development and testing process.

Sector Analysis

The defense software development sector is characterized by high complexity, stringent security requirements, and significant government investment. Contracts often involve specialized technologies and long development cycles. Northrop Grumman is a major player in this space, providing a wide range of aerospace and defense systems. This contract fits within the broader category of defense IT and systems integration, where spending is substantial and driven by national security needs and technological advancements. Comparable spending benchmarks are difficult without knowing the specific functionalities of LSPR 1.6.5, but software development for military applications can range from millions to billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. Northrop Grumman is a large prime contractor. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific set-aside goals or reporting requirements detailed in the award, the direct impact on the small business ecosystem is likely minimal, unless Northrop Grumman voluntarily engages small businesses for specialized support.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of the Air Force's contracting and program management offices. As a cost-plus-incentive fee contract, rigorous financial and performance monitoring will be essential to ensure value for money and adherence to objectives. Transparency regarding the specific performance metrics and cost controls will be key. While no specific Inspector General (IG) jurisdiction is mentioned, the Department of Defense's IG typically has broad oversight over defense spending and contract execution.

Related Government Programs

Foreign Military Sales (FMS) Program
Defense Software Development
Air Force IT Modernization
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award lacks competition, potentially leading to higher costs.
Cost-plus-incentive fee contracts require diligent oversight to manage costs and ensure performance.
Lack of detailed information on software functionality and specific performance metrics hinders comprehensive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DEVELOPMENT AND TESTING OF LSPR 1.6.5 SOFTWARE FOR MULTIPLE FMS COUNTRIES

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 $7.2 million.

What is the period of performance?

Start: 2024-09-06. End: 2026-07-31.

What is the specific functionality and purpose of the LSPR 1.6.5 software, and why is it critical for multiple FMS countries?

The provided data does not detail the specific functionalities of the LSPR 1.6.5 software. However, 'LSPR' could potentially stand for 'Logistics Support Planning and Readiness' or a similar system related to military logistics, planning, or readiness. Its criticality for multiple FMS countries suggests it plays a vital role in enabling interoperability, operational planning, or sustainment for allied nations utilizing U.S. military equipment or systems. The development and testing of this specific version indicate an effort to enhance or update these critical capabilities, ensuring they meet current operational requirements and security standards for international partners.

What are the key performance metrics and incentive targets associated with the Cost Plus Incentive Fee (CPIF) structure for this contract?

The specific key performance metrics and incentive targets for this CPIF contract are not detailed in the provided data. Typically, CPIF contracts establish a target cost, a target profit, and a minimum/maximum profit range. Incentives are awarded based on the contractor's ability to meet or exceed performance objectives (e.g., delivery schedules, quality standards, technical performance) and/or cost targets. For this contract, performance metrics could relate to the successful completion of software development milestones, the effectiveness of testing procedures, the reduction of defects, and timely delivery of the LSPR 1.6.5 software. The incentive mechanism aims to align Northrop Grumman's profit with the government's desired outcomes, encouraging efficiency and high-quality delivery.

What is Northrop Grumman's track record with developing and testing similar defense software, particularly for foreign military sales?

Northrop Grumman has an extensive track record in developing and delivering complex systems and software for the Department of Defense and international partners. As a major defense contractor, they are involved in numerous programs that require sophisticated software development, integration, and testing across various domains, including command and control, intelligence, surveillance, reconnaissance, and logistics. While specific details on their experience with 'LSPR 1.6.5' or identical software are not provided, their broad capabilities in areas like system engineering, cybersecurity, and software lifecycle management suggest they possess the necessary expertise. Their history with Foreign Military Sales (FMS) programs indicates familiarity with the unique requirements and compliance standards associated with supporting international allies.

How does the $7.15 million cost for developing and testing LSPR 1.6.5 software compare to similar software development contracts within the Department of Defense?

Benchmarking the $7.15 million cost for LSPR 1.6.5 software development and testing against similar DoD contracts is challenging without knowing the specific scope, complexity, and technological maturity of the software. However, for specialized defense software, especially involving updates to existing systems or development for international sales, this figure appears to be within a moderate range. Larger, more complex system developments or entirely new software architectures can cost tens or hundreds of millions of dollars. Conversely, minor updates or bug fixes might cost significantly less. The CPIF structure also means the final cost could vary. This award suggests a focused effort on a particular software version rather than a large-scale system overhaul.

What are the potential risks associated with a sole-source award for this software development contract, and what mitigation strategies are in place?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure, and the possibility that the chosen contractor may not be the most innovative or efficient solution available. Mitigation strategies typically involve robust government oversight, detailed negotiation of contract terms (including the CPIF structure to incentivize performance), and thorough technical evaluations to ensure the contractor's proposed approach is sound. The government contracting officer must have justified the sole-source award based on specific criteria (e.g., unique capabilities, urgency). Continuous monitoring of progress, costs, and adherence to requirements by the program office is crucial to manage these risks effectively throughout the contract lifecycle.

What is the historical spending pattern for LSPR software or similar logistics/planning software within the Department of the Air Force or DoD?

The provided data does not include historical spending patterns for LSPR software or similar systems. To assess this, one would need to query federal procurement databases (like FPDS or USASpending) for contracts awarded to Northrop Grumman or other vendors for logistics, planning, or readiness software, potentially filtering by the Air Force or DoD. Analyzing past awards for 'LSPR' versions or related systems would reveal trends in contract values, durations, competition levels, and pricing structures. This historical context is essential for understanding if the current $7.15 million award represents an increase, decrease, or consistent level of investment for this type of capability.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008

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

Financial Breakdown

Contract Ceiling: $7,151,043

Exercised Options: $7,151,043

Current Obligation: $7,151,043

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA863819D0001

IDV Type: IDC

Timeline