DoD's $30.3M R&D Contract for Commercial Space Internet Leverages Northrop Grumman for Defense Experimentation

Contract Overview

Contract Amount: $30,297,234 ($30.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-06

End Date: 2026-03-31

Contract Duration: 2,307 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET Key points: 1. Contract awarded to a large, established defense contractor, indicating a focus on proven capabilities. 2. Research and Development focus suggests investment in future technological advancements for defense. 3. The use of commercial space internet points to a strategy of leveraging private sector innovation. 4. A definitive contract type suggests a well-defined scope of work and expected outcomes. 5. The contract duration of over 6 years implies a long-term research objective. 6. The contract is a single award, suggesting specific expertise or capabilities were sought.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and the inherent uncertainties in research. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight to manage costs. Without specific performance metrics or comparable R&D projects in the public domain, a definitive value-for-money assessment is difficult. However, the investment in exploring commercial space internet for defense purposes aligns with broader trends in military modernization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple offerors had the opportunity to bid. The fact that it resulted in a single award to Northrop Grumman indicates that, among the competitors, Northrop Grumman was deemed to offer the best value or possess the most suitable capabilities for the specific research and development requirements. The level of competition, while present, ultimately led to a specialized selection.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible pricing and innovation through a wide range of potential providers.

Public Impact

The Department of Defense benefits from experimental research into advanced communication technologies. This contract supports the development of new capabilities for national defense and security. The research may lead to enhanced battlefield communication and data transfer for military personnel. Workforce implications include specialized R&D roles within Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
The long duration of the contract necessitates sustained oversight to ensure progress and alignment with evolving defense needs.
Reliance on commercial space internet introduces potential vulnerabilities related to external service provider reliability and security.

Positive Signals

Leveraging commercial off-the-shelf (COTS) technology can reduce development time and costs compared to entirely bespoke solutions.
The use of a large, experienced contractor like Northrop Grumman suggests a higher likelihood of successful project execution.
Investing in advanced communication technologies is crucial for maintaining a technological edge in defense.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on the application of commercial space internet technologies for defense purposes. The market for space-based communication is rapidly evolving, driven by both commercial demand and increasing government interest in resilient and high-bandwidth connectivity. Comparable spending in this area is difficult to pinpoint due to the proprietary nature of R&D and the niche application, but it aligns with broader trends in defense modernization and the adoption of commercial technologies.

Small Business Impact

There is no indication of a small business set-aside for this contract, and the prime contractor is a large aerospace and defense corporation. While Northrop Grumman may engage small businesses as subcontractors, the primary award does not directly benefit small businesses through set-aside provisions. The focus is on leveraging the capabilities of a major industry player for complex R&D.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures and progress to ensure adherence to the contract's objectives and budget. Transparency would be limited due to the sensitive nature of defense R&D, but internal reporting and audits would be standard accountability measures. Inspector General involvement would be possible in cases of suspected fraud, waste, or abuse.

Related Government Programs

Space-Based Defense Communications
Advanced Research Projects Agency (ARPA) Initiatives
Commercial Satellite Services Contracts
Department of Defense Research and Development Budgets

Risk Flags

Potential reliance on commercial infrastructure introduces security and availability risks.
Long contract duration requires sustained oversight to ensure objectives are met.
Cost-plus-fixed-fee structure necessitates careful monitoring of expenditures.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET

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 $30.3 million.

What is the period of performance?

Start: 2019-12-06. End: 2026-03-31.

What is Northrop Grumman's track record with similar Department of Defense R&D contracts, particularly those involving space or advanced communications?

Northrop Grumman has a long and extensive history of supporting the Department of Defense (DoD) across a wide range of research, development, and acquisition programs. Their expertise spans advanced technologies, including space systems, communications, and cybersecurity. For R&D contracts involving space and communications, Northrop Grumman has been a key player in developing satellites, communication payloads, and resilient network solutions for military applications. They have a demonstrated capability in managing complex, long-term research efforts and integrating cutting-edge technologies. While specific details of past R&D projects are often classified or proprietary, their overall portfolio indicates a strong foundation for undertaking experimental work with commercial space internet technologies. Their experience suggests they are well-equipped to handle the technical challenges and security requirements inherent in such a contract.

How does the pricing structure (Cost Plus Fixed Fee) compare to other R&D contracts of similar scope and complexity within the DoD?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for research and development contracts where the scope of work may evolve or where precise cost estimation is difficult at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs to maximize their profit margin, as the fee is fixed regardless of the final cost. Compared to other R&D contracts, CPFF offers a balance between flexibility for the government and incentive for the contractor to manage expenses. Other structures like Cost Plus Incentive Fee (CPIF) might offer greater cost control incentives if performance targets are met, while Firm Fixed Price (FFP) is generally unsuitable for R&D due to inherent uncertainties. For specialized R&D like exploring commercial space internet for defense, CPFF is a pragmatic choice, though it requires robust government oversight to prevent cost creep.

What are the primary risks associated with relying on commercial space internet for defense experimentation, and how might they be mitigated?

Primary risks include the reliability and availability of commercial services, which may not meet the stringent demands of military operations, especially during conflict. Security vulnerabilities are another major concern, as commercial networks could be targets for cyberattacks or espionage. Dependence on a third-party provider introduces potential supply chain risks and lack of direct control over infrastructure. Furthermore, the evolving nature of commercial technology might not always align with long-term defense strategic needs. Mitigation strategies could involve diversifying providers, implementing robust encryption and cybersecurity measures, developing redundant communication pathways (including military-owned assets), and establishing clear service level agreements (SLAs) with penalties for non-performance. The contract's R&D nature itself is a mitigation, as it aims to understand and potentially overcome these limitations through experimentation.

What is the expected impact of this contract on the development and adoption of commercial space internet technologies for non-defense applications?

This contract could indirectly accelerate the development and adoption of commercial space internet technologies. By investing in and experimenting with these services, the Department of Defense (DoD) validates their capabilities and potentially drives demand. This validation can encourage further private sector investment in satellite constellations, ground infrastructure, and service improvements. The insights gained from defense-specific use cases, such as resilience and bandwidth requirements in challenging environments, could lead to innovations that also benefit commercial users. Furthermore, the DoD's involvement might push commercial providers to enhance their security protocols and service guarantees, making their offerings more attractive and reliable for a broader range of enterprise and consumer applications. It signals a growing market acceptance and potential for growth in the space-based internet sector.

How does this contract fit into the broader trend of military modernization and the integration of commercial technologies into defense systems?

This contract is a clear example of the broader trend within the Department of Defense (DoD) to modernize by integrating commercial off-the-shelf (COTS) technologies. Recognizing the rapid pace of innovation in the private sector, the military is increasingly looking to leverage commercial advancements rather than solely relying on traditional, bespoke defense development cycles, which can be slower and more expensive. Utilizing commercial space internet allows the DoD to potentially gain access to high-bandwidth, global connectivity faster and at a lower cost than developing a dedicated military system from scratch. This approach aims to enhance operational capabilities, improve situational awareness, and maintain a technological advantage by adopting state-of-the-art commercial solutions, while still conducting necessary research to ensure security and suitability for military applications.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $30,297,234

Exercised Options: $30,297,234

Current Obligation: $30,297,234

Actual Outlays: $1,711,798

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline