DoD's $18M R&D contract for navigation systems awarded to Northrop Grumman without competition

Contract Overview

Contract Amount: $18,005,629 ($18.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2008-12-22

End Date: 2012-12-31

Contract Duration: 1,470 days

Daily Burn Rate: $12.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: AAR LN-251 MODIFICATION FOR PRECISE RELATIVE NAVIGATION

Place of Performance

Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AAR LN-251 MODIFICATION FOR PRECISE RELATIVE NAVIGATION Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits price discovery and potentially increases costs for taxpayers. 3. Long contract duration of 1470 days suggests a complex and lengthy research effort. 4. The contract's focus on R&D in physical sciences aligns with advanced defense capabilities. 5. Lack of competition raises concerns about whether the government secured the best value. 6. The modification suggests ongoing development and potential for scope changes.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a sole-source award, raises concerns about value for money. Without competitive bidding, it is difficult to benchmark the pricing against market rates or alternative solutions. The total award amount of $18 million over approximately four years for R&D in navigation systems requires careful scrutiny to ensure it aligns with industry standards and delivers expected technological advancements. Further analysis of cost breakdowns and performance metrics would be necessary for a more definitive assessment.

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 only one responsible source can provide the required supplies or services. The lack of competition means there were no other bidders to compare against, potentially limiting the government's ability to negotiate the most favorable price and terms. This approach can be justified for highly specialized or proprietary technologies, but it bypasses the price discovery benefits of a competitive process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the cost savings typically achieved through competitive bidding. This limits the government's leverage in price negotiations.

Public Impact

The primary beneficiary is the Department of Defense, which gains advanced navigation capabilities. The contract supports research and development in physical, engineering, and life sciences. The geographic impact is primarily within California, where Northrop Grumman Systems Corporation is located. The contract likely supports a specialized workforce in R&D and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contract type can incentivize cost overruns.
Long contract duration may indicate potential for scope creep or delays.
Lack of transparency in pricing due to non-competitive nature.

Positive Signals

Focus on critical R&D for national security.
Award to a known contractor with potential expertise in the field.
Modification suggests ongoing support for a potentially evolving technology.

Sector Analysis

This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541712. This sector is crucial for defense innovation, encompassing advancements in areas like aerospace, materials science, and advanced computing. The market for defense R&D is characterized by high specialization, long development cycles, and significant government investment. Comparable spending in this sector often involves substantial sums due to the cutting-edge nature of the research and the need for specialized expertise and facilities.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false) and there is no indication of subcontracting plans for small businesses (sb=false). Therefore, this award is unlikely to directly benefit the small business ecosystem. The focus is on a large prime contractor, and opportunities for small businesses would likely need to be pursued through subcontracting channels, if any are established by Northrop Grumman.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee nature of the contract necessitates close monitoring of costs and progress to ensure funds are used efficiently. Transparency may be limited due to the sole-source award, but contract modifications and performance reports should provide some level of accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Navigation Systems Research
Defense Research and Development Programs
Northrop Grumman Defense Contracts
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Limited price competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AAR LN-251 MODIFICATION FOR PRECISE RELATIVE NAVIGATION

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 $18.0 million.

What is the period of performance?

Start: 2008-12-22. End: 2012-12-31.

What is the specific technological advancement expected from this contract modification?

The data provided indicates the contract modification is for 'AAR LN-251 MODIFICATION FOR PRECISE RELATIVE NAVIGATION.' While the exact technical specifications are not detailed, this suggests an enhancement or update to an existing navigation system, likely the LN-251. The focus on 'precise relative navigation' implies improvements in the system's ability to accurately determine its position and orientation in relation to other objects or reference points, which is critical for various defense applications such as missile guidance, drone operations, and formation flying. The modification likely addresses specific performance gaps or incorporates new technological components to achieve this enhanced precision.

How does the cost-plus-fixed-fee structure impact the overall cost and risk for the government?

The Cost-Plus-Fixed-Fee (CPFF) contract structure means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts a significant portion of the cost risk to the government, as the final contract price is not fixed upfront and can increase if costs escalate. While it can be beneficial for R&D projects where the scope is uncertain, it necessitates robust government oversight to control costs and prevent inefficiencies. The fixed fee provides the contractor with an incentive to control costs to some extent, but the primary risk of cost overruns lies with the government.

What are the potential risks associated with awarding a sole-source contract for R&D?

The primary risk of a sole-source R&D contract is the lack of competitive pressure, which can lead to inflated prices and reduced innovation. Without competing proposals, the government may not be aware of or able to access potentially more cost-effective or technologically superior solutions from other vendors. Furthermore, the absence of competition can reduce the contractor's incentive to perform efficiently or to explore novel approaches, as they are guaranteed the award. This necessitates a strong justification for the sole-source award, often based on unique capabilities, proprietary technology, or urgent national security needs.

What is Northrop Grumman's track record with similar navigation system contracts?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in aerospace and defense systems, including navigation, guidance, and control technologies. They have a long history of developing and producing complex systems for military aircraft, spacecraft, and missiles. While specific details on their track record with the LN-251 system or similar 'precise relative navigation' R&D contracts are not provided in this data snippet, their general profile suggests they possess the technical expertise and infrastructure to undertake such projects. A deeper dive into their contract history, performance reviews, and past project outcomes would be needed for a comprehensive assessment.

How does this contract's spending compare to other R&D investments in navigation technology?

The $18 million awarded for this R&D contract over approximately four years represents a moderate investment in a specific area of navigation technology. Without broader market data or benchmarks for comparable R&D efforts in precise relative navigation, it is challenging to definitively state how this spending compares. However, R&D in advanced defense systems can range from tens of millions to billions of dollars, depending on the scope, complexity, and technological maturity. This contract appears focused on a specific modification and enhancement rather than a foundational, large-scale system development, suggesting its cost is likely within a reasonable range for such targeted research.

What are the implications of the contract's end date (2012-12-31) given the start date (2008-12-22)?

The contract's original period of performance spanned from December 22, 2008, to December 31, 2012, a duration of approximately four years (1470 days). The fact that this data likely represents a modification suggests that the original contract may have been extended, or that the modification itself is being analyzed retrospectively. If the end date has passed, it implies the core R&D work under this specific award is complete. However, modifications can sometimes extend timelines or address issues arising from the completed work. Understanding the current status and any subsequent actions or contracts related to this program is crucial for a complete picture.

Industry Classification

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

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

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: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 91367

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,005,629

Exercised Options: $18,005,629

Current Obligation: $18,005,629

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline