DoD's $19.6M R&D contract with Northrop Grumman shows long-term engagement in physical sciences

Contract Overview

Contract Amount: $19,609,417 ($19.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2005-01-04

End Date: 2014-01-31

Contract Duration: 3,314 days

Daily Burn Rate: $5.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Long contract duration of over 9 years suggests a sustained R&D effort. 3. Sole-source award indicates potential lack of market competition or specialized capabilities. 4. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 5. Contractor has a significant presence in Maryland, a hub for defense contracting. 6. Focus on R&D aligns with strategic investments in technological advancement.

Value Assessment

Rating: fair

The total award of $19.6 million over a 9-year period averages approximately $2.18 million per year. Without specific deliverables or performance metrics, it is difficult to benchmark value for money. The cost-plus-fixed-fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation if not managed with rigorous oversight. Comparing this to similar R&D efforts in physical sciences would require detailed knowledge of the specific research objectives and outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is deemed the only responsible source. The lack of competition means that the government did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no market pressure to drive down prices. It also limits opportunities for other businesses to engage with the government.

Public Impact

Benefits the Department of Defense through advancements in physical, engineering, and life sciences. Services delivered include research and development, contributing to technological innovation. Geographic impact is concentrated in Maryland, where the contractor is based. Workforce implications include employment for scientists, engineers, and support staff at Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost-plus-fixed-fee structure can lead to cost overruns without strict oversight.
Long contract duration may indicate a lack of flexibility or evolving requirements.

Positive Signals

Contractor is a major defense firm with extensive R&D experience.
Focus on R&D aligns with national security and technological advancement goals.
Sustained funding over nearly a decade suggests critical and ongoing research needs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by long-term investments, high innovation potential, and significant government funding, particularly from defense agencies. The market size for defense R&D is substantial, with numerous large contractors vying for significant portions. This contract with Northrop Grumman represents a specific investment within this broader landscape, likely contributing to foundational or applied research critical for future defense capabilities.

Small Business Impact

As a sole-source award to a large prime contractor, this contract does not appear to include specific small business set-asides. There is no indication of subcontracting plans for small businesses within the provided data. This means the direct economic benefit to the small business ecosystem from this specific contract is likely minimal, though the prime contractor may engage small businesses in their broader supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices, with support from the Defense Contract Management Agency (DCMA). Given the CPFF structure and long duration, rigorous oversight of costs, progress, and adherence to research objectives is crucial. Transparency would be facilitated through regular reporting requirements and potential audits. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Northrop Grumman Defense Contracts
Cost-Plus-Fixed-Fee Contracts
Physical Sciences Research Funding
Engineering and Life Sciences R&D

Risk Flags

Sole-source award may indicate limited competition.
CPFF contract type carries risk of cost overruns.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.

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 $19.6 million.

What is the period of performance?

Start: 2005-01-04. End: 2014-01-31.

What specific research objectives were pursued under this contract, and what were the key outcomes or deliverables?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) awarded to Northrop Grumman Systems Corporation. However, the specific research objectives, milestones, and tangible outcomes or deliverables are not detailed in the summary data. Contracts of this nature, especially those with a Cost Plus Fixed Fee structure and long duration (over 9 years), often involve foundational or applied research where immediate, concrete deliverables might be less defined than in development or production contracts. Further analysis would require accessing the contract's statement of work (SOW) and performance reports to understand the precise nature of the R&D undertaken and its achievements.

How does the average annual spending of approximately $2.18 million compare to similar R&D contracts in the physical sciences sector?

Benchmarking the average annual spending of $2.18 million requires comparison with contracts of similar scope, duration, and research focus within the physical sciences R&D sector. Without access to a comprehensive database of federal R&D contracts, including their specific technical areas and funding levels, a precise comparison is challenging. However, this figure appears moderate for a large defense contractor like Northrop Grumman engaged in long-term R&D. Major defense R&D programs can range from tens of millions to billions of dollars annually. This contract's value suggests a focused research effort rather than a large-scale program, potentially in a specialized area of physical sciences.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this long-term R&D effort?

The Cost Plus Fixed Fee (CPFF) contract type, used here, carries inherent risks, particularly for long-duration R&D. The primary risk is that the contractor may have less incentive to control costs, as the government reimburses allowable costs plus a predetermined fixed fee. If the initial cost estimates are inaccurate or if research proves more complex than anticipated, costs can escalate significantly beyond initial projections. For the government, this necessitates robust oversight to ensure costs are reasonable and allocable, and that the fixed fee remains appropriate. The long duration amplifies this risk, as unforeseen technical challenges or changes in research direction could lead to substantial cost growth over the contract's life.

Given the sole-source nature, what due diligence was likely performed by the DoD to ensure this was the only responsible source?

When a sole-source contract is awarded, the procuring agency, in this case, the Department of Defense, must conduct thorough due diligence to justify the lack of competition. This typically involves documenting why other sources are not capable of meeting the requirement, often citing unique capabilities, proprietary data, specialized facilities, or urgent needs that only one contractor can fulfill. Regulatory requirements (e.g., Federal Acquisition Regulation Part 6) mandate specific justifications, such as 'only one responsible source and no other supplies or services will satisfy agency requirements.' The agency would likely have explored market research to confirm the absence of alternatives before proceeding with a sole-source justification.

What is Northrop Grumman's track record with similar R&D contracts, particularly with the Department of Defense?

Northrop Grumman Systems Corporation is a major aerospace and defense contractor with a long history of performing complex R&D for the Department of Defense. They are involved in numerous high-technology programs across various domains, including space, aviation, and defense systems. Their track record generally includes successful execution of large-scale, technically challenging projects. However, like any large contractor, they may have faced scrutiny or challenges on specific contracts related to cost, schedule, or performance. Accessing historical contract performance data (e.g., through the Federal Procurement Data System) would provide a more granular view of their performance trends on R&D contracts similar to this one.

How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) sector evolved over the past decade?

Federal spending in the R&D sector, particularly under NAICS code 541710, has generally seen consistent, albeit fluctuating, levels of investment, driven largely by defense and health agencies. The Department of Defense is a primary funder of R&D in physical and engineering sciences, focusing on areas like advanced materials, aerospace technology, and C4ISR systems. Health-related R&D, often funded through agencies like NIH, focuses on life sciences. Over the past decade, there has been a continuous emphasis on maintaining technological superiority, leading to sustained funding, though budget priorities can shift based on geopolitical events and economic conditions. Specific trends might show increased investment in areas like artificial intelligence, cybersecurity, and biotechnology within this broad category.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › ECONOMIC GROWTH/PRODUCTIVITY R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1580B W NURSERY RD, MS B58, LINTHICUM HEIG, MD, 21090

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline