Northrop Grumman awarded $39.8M for R&D in physical sciences, a sole-source contract

Contract Overview

Contract Amount: $39,782,329 ($39.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2011-05-20

End Date: 2012-05-26

Contract Duration: 372 days

Daily Burn Rate: $106.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SAND DRAGON B

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SAND DRAGON B Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Research and Development focus in physical, engineering, and life sciences. 3. Contract duration of 372 days suggests a focused, short-term project. 4. Awarded by the Defense Contract Management Agency, indicating a defense-related objective. 5. Northrop Grumman Systems Corporation is a large, established defense contractor. 6. The contract type is Cost Plus Fixed Fee, which can shift risk to the government. 7. No small business set-aside was utilized for this award.

Value Assessment

Rating: questionable

Benchmarking the value of this $39.8 million contract is challenging without detailed scope and deliverables. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, can lead to higher costs for the government if not managed tightly, as it reimburses costs plus a fixed fee. Given the sole-source nature, there's no direct comparison to assess if the pricing is competitive. The fixed fee component provides some cost control, but the overall value depends heavily on the efficiency and necessity of the research conducted.

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 goods or services. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. The government's ability to negotiate favorable terms is reduced when only one contractor is considered.

Public Impact

The primary beneficiary is likely the Department of Defense, receiving advanced research and development in physical sciences. The services delivered are focused on research and development, potentially leading to new technologies or improved existing ones. The geographic impact is centered in California, where the contractor is located. Workforce implications would primarily affect specialized researchers and engineers employed by Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not rigorously overseen.
Lack of transparency inherent in sole-source procurements makes independent value assessment difficult.
Research and Development contracts can have uncertain outcomes and deliverables, posing a risk to investment.
No small business participation noted, potentially limiting broader economic impact.

Positive Signals

Northrop Grumman is a reputable contractor with extensive experience in defense R&D.
The contract addresses a specific need within the Department of Defense's research objectives.
Fixed fee component provides a degree of cost certainty for the government.
The contract duration suggests a defined scope for the research effort.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This sector is critical for technological advancement and national security. Spending in this area is often characterized by long-term investments, high innovation potential, and significant government funding, particularly within the defense industry. Comparable spending benchmarks are difficult to establish without knowing the specific R&D area, but large defense contractors like Northrop Grumman are major players in this market.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this specific contract are likely limited. The focus is on a large, established prime contractor, potentially bypassing the broader small business ecosystem for this particular award.

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. Accountability measures are inherent in the CPFF contract structure, requiring the contractor to justify costs and achieve milestones. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process and pricing more challenging.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Northrop Grumman Defense Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award limits competition.
CPFF contract type may incentivize cost overruns.
Lack of transparency in sole-source procurement.
R&D outcomes can be uncertain.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SAND DRAGON B

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 $39.8 million.

What is the period of performance?

Start: 2011-05-20. End: 2012-05-26.

What specific research and development activities were undertaken under this contract?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' under NAICS code 541712. However, the specific research activities, objectives, and deliverables are not detailed in the summary data. Typically, such contracts would involve scientific investigation, experimentation, analysis, and potentially prototype development aimed at advancing knowledge or creating new capabilities relevant to the Department of Defense's mission. Further details would likely be found in the contract's statement of work.

How does the $39.8 million award compare to similar R&D contracts awarded by the DoD?

Comparing this $39.8 million award requires context on the specific R&D area and the scope of work. The Department of Defense awards numerous R&D contracts, ranging from small, focused projects to multi-billion dollar programs. For a single-award, definitive contract with a duration of approximately one year, $39.8 million is a substantial but not extraordinary amount, particularly for a major defense contractor like Northrop Grumman. Without knowing the specific technological domain (e.g., materials science, aerospace engineering, cyber R&D), a precise comparison is difficult. However, it represents a significant investment in a particular research area.

What are the risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

CPFF contracts carry specific risks for the government. While the fixed fee provides some cost certainty, the government bears the risk of all allowable costs. If the contractor's costs exceed estimates, the government pays them, plus the agreed-upon fixed fee. This can incentivize less cost-consciousness from the contractor. For R&D, where the scope and outcomes can be uncertain, CPFF can lead to cost growth if the research proves more complex or time-consuming than initially anticipated. Effective oversight and clear performance metrics are crucial to mitigate these risks.

What is the track record of Northrop Grumman Systems Corporation in fulfilling R&D contracts?

Northrop Grumman Systems Corporation is a major aerospace and defense technology company with a long history of performing complex research and development contracts for the U.S. government, particularly the Department of Defense. They have a well-established track record in areas such as aerospace, defense electronics, cybersecurity, and space systems. While specific performance data for every contract isn't publicly available, their status as a prime contractor on numerous large-scale, critical programs suggests a generally reliable performance history. However, like any large contractor, they may have faced challenges or criticisms on specific projects over their extensive history.

What does the sole-source nature of this award imply about the specific R&D need?

A sole-source award implies that the contracting agency, in this case, likely the Department of Defense via the DCMA, determined that Northrop Grumman Systems Corporation was the only responsible source capable of meeting the specific research and development requirements. This could be due to unique capabilities, proprietary technology, existing system integration needs, or urgent requirements where competition was not feasible or practical. It suggests the requirement was highly specialized, potentially building upon prior work or requiring specific expertise that only Northrop Grumman possessed at the time of the award.

How has federal spending in the R&D sector (NAICS 541712) trended in recent years?

Federal spending in the Research and Development sector, particularly under NAICS code 541712 (Physical, Engineering, and Life Sciences), has generally seen consistent or increasing investment, especially driven by defense and national security priorities. Agencies like the Department of Defense, NASA, and the Department of Energy are major funders. While specific year-over-year trends can fluctuate based on budget appropriations and strategic priorities, the overall importance of R&D for technological superiority ensures significant, sustained federal outlays. Factors like geopolitical competition and the need for technological innovation often drive budget allocations in this area.

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: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127

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

Financial Breakdown

Contract Ceiling: $42,799,304

Exercised Options: $42,799,304

Current Obligation: $39,782,329

Subaward Activity

Number of Subawards: 360

Total Subaward Amount: $72,875,170

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline