DoD's $11M contract for generation and allocation management awarded to Northrop Grumman Systems Corporation

Contract Overview

Contract Amount: $11,046,584 ($11.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-05

End Date: 2025-12-01

Contract Duration: 2,188 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: OPTIMIZED MANAGEMENT OF GENERATION AND ALLOCATION

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: OPTIMIZED MANAGEMENT OF GENERATION AND ALLOCATION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2188 days indicates a long-term need for these services. 3. Research and Development in Physical, Engineering, and Life Sciences is a critical sector for innovation. 4. The contract type (Cost Plus Fixed Fee) can present cost control challenges. 5. Northrop Grumman Systems Corporation is a major defense contractor with extensive experience. 6. The contract is a delivery order under a larger contract vehicle. 7. No small business set-aside was utilized for this specific award.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the scope of the underlying contract. Cost Plus Fixed Fee contracts can sometimes lead to higher costs than fixed-price contracts if not managed carefully. However, for complex R&D efforts, this contract type may be appropriate to allow for flexibility. Further analysis would require comparing the specific deliverables and performance metrics against similar R&D contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specific delivery order. While competition is generally positive, the number of bidders could be higher for a contract of this potential value and duration.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing and potentially leads to better value. However, the ultimate benefit depends on the effectiveness of the competition and the final negotiated price.

Public Impact

The Department of Defense benefits from optimized management of generation and allocation processes. This contract supports research and development in physical, engineering, and life sciences. The services delivered are likely to enhance operational efficiency and resource allocation within the Air Force. The geographic impact is primarily within the Department of Defense's operational sphere, with potential implications for national security. Workforce implications may include specialized research and development personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not rigorously monitored.
The long duration of the contract may require ongoing performance monitoring to ensure continued value.
Lack of small business participation could limit opportunities for smaller innovative firms.

Positive Signals

Awarded through full and open competition, indicating a broad search for qualified contractors.
Northrop Grumman Systems Corporation is a reputable contractor with significant experience in defense R&D.
The contract addresses a critical need for optimized management of generation and allocation.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is crucial for technological advancement and maintaining a competitive edge for defense agencies. Comparable spending in this area often involves significant investment in innovation, with contract values varying widely based on the complexity and scope of the research.

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 directly participate in this specific award are limited. The overall impact on the small business ecosystem would depend on whether Northrop Grumman Systems Corporation engages small businesses as subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force, with potential involvement from the Department of Defense's Inspector General. Accountability measures would be tied to the performance metrics and milestones outlined in the contract. Transparency is generally maintained through contract award databases, though specific details of the R&D work may be sensitive.

Related Government Programs

Defense Research and Development Programs
Aerospace Engineering Services
Systems Management Contracts
Resource Allocation Optimization
Logistics and Operations Management

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to control costs.
Long contract duration may lead to outdated research or evolving requirements.
Limited visibility into specific R&D deliverables and outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. OPTIMIZED MANAGEMENT OF GENERATION AND ALLOCATION

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 $11.0 million.

What is the period of performance?

Start: 2019-12-05. End: 2025-12-01.

What is the specific nature of the 'generation and allocation' being managed under this contract?

The provided data indicates the contract is for 'OPTIMIZED MANAGEMENT OF GENERATION AND ALLOCATION' within the Department of Defense, specifically the Air Force. While the exact nature of 'generation' and 'allocation' is not detailed, in a defense context, this could refer to the generation and allocation of resources such as personnel, equipment, budget, or even energy. Given the R&D classification (NAICS 541712), it likely involves research into novel methods or systems for optimizing these processes, potentially for military operations, logistics, or strategic planning. Further details would be found in the Statement of Work (SOW) of the underlying contract.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for R&D services?

Cost Plus Fixed Fee (CPFF) contracts are common for research and development where the scope of work is not precisely defined at the outset, allowing for flexibility and adaptation as the research progresses. The contractor is reimbursed for allowable costs plus a fixed fee representing their profit. This contrasts with Fixed Price contracts, which offer greater cost certainty for the government but can be less suitable for exploratory R&D. Incentive contracts aim to motivate contractor performance through shared savings or award fees. For R&D, CPFF is often chosen when the government needs the contractor to explore various avenues and adapt to findings, but it requires robust oversight to manage costs effectively and prevent scope creep beyond the intended research objectives.

What is Northrop Grumman Systems Corporation's track record with similar DoD R&D contracts?

Northrop Grumman Systems Corporation is a major defense contractor with a long history of performing complex Research and Development (R&D) for the Department of Defense (DoD) and its various branches, including the Air Force. They have extensive experience in areas such as aerospace, defense systems, and advanced technologies. Their track record typically includes large-scale, high-value contracts involving system design, integration, and technological innovation. While specific performance details for every contract are not publicly available, their consistent selection for significant DoD R&D efforts suggests a strong capability and a generally positive performance history in delivering complex technological solutions and research outcomes.

What are the potential risks associated with a long-duration R&D contract like this one?

Long-duration R&D contracts, such as this 2188-day (approximately 6-year) delivery order, carry several potential risks. Firstly, the technological landscape can change rapidly, meaning the research objectives or methodologies might become outdated before the contract concludes, potentially reducing the value of the final deliverables. Secondly, the extended timeline increases the risk of cost growth, especially under a Cost Plus Fixed Fee structure, if not managed with stringent oversight. Thirdly, maintaining consistent contractor focus and performance over such a long period can be challenging. Finally, there's a risk that the initial assumptions or requirements driving the R&D may evolve or prove incorrect, leading to a need for significant contract modifications or a less impactful outcome than initially envisioned.

How does the $11 million value of this delivery order compare to typical DoD R&D spending in this category?

The $11 million value for this specific delivery order falls within a common range for specialized R&D efforts within the Department of Defense. DoD R&D spending is vast, encompassing everything from basic scientific research to advanced system development. While multi-billion dollar programs are frequent, numerous smaller, targeted R&D contracts like this one are essential for exploring specific technological avenues or optimizing existing processes. The value is significant enough to warrant dedicated resources and expertise but not so large as to be considered a major platform development. It represents a focused investment in a particular area of research or management optimization within the broader defense R&D portfolio.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 500 N DOUGLAS ST, EL SEGUNDO, CA, 90245

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: $11,996,077

Exercised Options: $11,996,077

Current Obligation: $11,046,584

Actual Outlays: $128,638

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $4,611,444

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865017D2407

IDV Type: IDC

Timeline