Northrop Grumman awarded $155M for Space Fence Phase A SDR, a definitive contract for radar system development

Contract Overview

Contract Amount: $15,534,392 ($15.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2009-06-11

End Date: 2010-12-11

Contract Duration: 548 days

Daily Burn Rate: $28.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPACE FENCE PHASE A SDR

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $15.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SPACE FENCE PHASE A SDR Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm-fixed-price definitive contract, which typically shifts risk to the contractor. 3. The duration of 548 days indicates a focused development phase for the Space Fence system. 4. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector. 5. The award was managed by the Defense Contract Management Agency, indicating robust oversight. 6. The contract's value of $155M places it as a significant investment in defense infrastructure.

Value Assessment

Rating: good

The contract value of $155M for a definitive contract for Phase A SDR of the Space Fence program appears reasonable given the specialized nature of the work. Without specific benchmarks for similar radar system development phases, a direct comparison is difficult. However, the firm-fixed-price structure suggests that the government has negotiated a price that the contractor is expected to adhere to, implying a degree of cost control. The duration of the contract also suggests a defined scope of work for this phase.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This 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 competitive environment, which is generally favorable for price discovery and innovation. The specific number of bidders can influence the final price, with more bidders typically leading to more competitive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving the best value through competitive pricing and a wider range of potential solutions.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, which will utilize the Space Fence system for enhanced space domain awareness. The services delivered include the development and production of a critical component for a space surveillance network. The geographic impact is national, supporting U.S. space security interests, with potential global implications for space traffic management. Workforce implications include employment opportunities for engineers, technicians, and manufacturing personnel within Northrop Grumman and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during development, despite the firm-fixed-price structure.
Dependence on a single prime contractor, Northrop Grumman, could limit flexibility if issues arise.
The long-term sustainment and upgrade costs of the Space Fence system are not detailed in this award.

Positive Signals

Awarded under full and open competition, indicating a robust and fair bidding process.
Firm-fixed-price contract type shifts cost risk to the contractor, promoting budget predictability.
Northrop Grumman has a significant track record in aerospace and defense systems, suggesting technical capability.
The contract is for a critical national security capability, aligning with strategic defense priorities.

Sector Analysis

The Space Fence program falls within the broader aerospace and defense manufacturing sector, specifically focusing on advanced radar and surveillance systems. This sector is characterized by high R&D investment, long product development cycles, and significant government procurement. The market size for such specialized defense systems is substantial, driven by national security requirements and technological advancements. This contract represents a key investment in maintaining U.S. superiority in space domain awareness, a critical capability in the current geopolitical climate.

Small Business Impact

The contract details do not indicate any specific small business set-asides for this particular award. However, large prime contractors like Northrop Grumman are often required to meet subcontracting goals with small businesses as part of their overall contract obligations. The impact on the small business ecosystem would depend on the extent to which Northrop Grumman utilizes small business subcontractors for specialized components or services related to this project.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded within the firm-fixed-price structure, incentivizing the contractor to meet cost and schedule requirements. Transparency is generally maintained through contract award databases and reporting requirements, although specific technical details of the system's development may be classified.

Related Government Programs

Space Surveillance Network
Missile Defense Systems
Satellite Tracking Systems
Radar Manufacturing
Aerospace Defense Contracts

Risk Flags

Potential for schedule delays due to the complexity of advanced radar development.
Risk of cost growth if technical challenges exceed initial estimates, despite fixed-price nature.
Dependence on critical technological advancements for optimal performance.
Cybersecurity vulnerabilities in a highly connected defense system.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SPACE FENCE PHASE A SDR

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 $15.5 million.

What is the period of performance?

Start: 2009-06-11. End: 2010-12-11.

What is Northrop Grumman's track record with similar large-scale defense system development contracts?

Northrop Grumman has a substantial and extensive track record in developing and delivering complex defense systems, including radar, satellite, and aerospace technologies. They have been a prime contractor on numerous high-value programs for the Department of Defense and other government agencies. Examples include their work on the B-2 bomber, various satellite programs, and advanced electronic warfare systems. Their experience in managing large, multi-year, firm-fixed-price contracts suggests a capability to handle the technical and programmatic challenges associated with the Space Fence Phase A SDR. However, like any large contractor, they have faced scrutiny and challenges on specific programs, underscoring the importance of ongoing oversight.

How does the $155 million award compare to other radar system development contracts?

Benchmarking the $155 million award for Space Fence Phase A SDR against other radar system development contracts requires careful consideration of scope, complexity, and technological advancement. Radar systems can range from relatively simple ground-based units to highly sophisticated, multi-function arrays for aerospace and defense applications. The Space Fence program is designed for global space domain awareness, implying a highly advanced and complex system. Therefore, $155 million for a development phase (Phase A SDR) is likely within the expected range for such a critical and technologically demanding project. Contracts for less complex or smaller-scale radar systems would naturally be valued lower, while programs involving full production or global deployment could reach billions of dollars.

What are the primary risks associated with this firm-fixed-price contract for the government?

While firm-fixed-price contracts are generally favored for cost control, they do present risks for the government. The primary risk is that the contractor may cut corners on quality or performance to maintain profitability if unforeseen technical difficulties or cost increases arise. If the contractor fails to deliver as specified, the government's recourse might be limited to contract termination or legal action, which can be time-consuming and costly, potentially delaying the program. Additionally, if the initial price was set too low due to aggressive bidding, the contractor might seek contract modifications or claim unforeseen circumstances, leading to cost growth. Robust government oversight and clear performance metrics are crucial to mitigate these risks.

How effective is the Space Fence program expected to be in enhancing space domain awareness?

The Space Fence program is designed to significantly enhance space domain awareness (SDA) by providing a more comprehensive and accurate tracking of objects in Earth's orbit, including smaller debris and operational satellites. Its advanced radar capabilities are expected to improve the detection, tracking, and identification of orbital objects, thereby reducing the risk of collisions and providing better situational awareness for military and civilian space operations. The effectiveness will ultimately depend on the successful development, deployment, and integration of the system with existing space surveillance networks. Early phases like SDR are critical for validating the technical feasibility and performance requirements.

What are the historical spending patterns for the Space Fence program or similar initiatives?

Historical spending patterns for the Space Fence program itself have evolved over time, with various phases and iterations. The program has seen significant investment over the years, reflecting its complexity and strategic importance. Similar initiatives in advanced radar and space surveillance have also represented substantial, multi-year investments by the Department of Defense. These programs often span multiple budget cycles and involve large prime contractors. Tracking historical spending provides context for the current award, indicating whether it aligns with previous investment levels or represents a significant shift in funding for space domain awareness capabilities.

What is the significance of the 'SDR' designation in the contract title?

The 'SDR' in 'SPACE FENCE PHASE A SDR' likely stands for 'System Design Review' or a similar preliminary design phase. This designation indicates that the contract covers an early stage of the program focused on defining the system's architecture, design, and technical requirements. A System Design Review is a critical milestone where the proposed design is formally reviewed to ensure it meets all performance requirements and is feasible for development and production. Awards for SDR phases are typically smaller than those for full development or production, focusing on engineering, analysis, and preliminary design work.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090

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

Financial Breakdown

Contract Ceiling: $30,000,000

Exercised Options: $30,000,000

Current Obligation: $15,534,392

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline