Northrop Grumman awarded $22.9M contract for MK21-2B Trinity Launch Service by the Air Force

Contract Overview

Contract Amount: $22,945,000 ($22.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2026-08-25

Contract Duration: 1,061 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK21-2B TRINITY LAUNCH SERVICE

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $22.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MK21-2B TRINITY LAUNCH SERVICE Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger contract, indicating phased execution. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of over 1000 days suggests a long-term project with significant development or sustainment needs. 5. The North American Industry Classification System (NAICS) code 336414 points to specialized guided missile and space vehicle manufacturing. 6. The contract is for a launch service, implying support for space or missile systems.

Value Assessment

Rating: good

The contract value of $22.9 million for a launch service is within a reasonable range for specialized defense procurements. Benchmarking against similar missile or space vehicle launch contracts would provide further context on value for money. The firm fixed-price nature of the award suggests the government has secured a defined cost for the service, which is a positive indicator for cost control.

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 number of bidders is not specified, but this procurement method generally fosters price discovery and encourages competitive pricing. The Air Force's decision to use full and open competition suggests confidence in the market's ability to provide the required services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better value by leveraging market forces to drive down costs.

Public Impact

The primary beneficiaries are likely the Department of Defense and the U.S. Air Force, receiving critical launch services for defense assets. The service delivered is the MK21-2B Trinity Launch Service, crucial for national security and space-based capabilities. The contract is being performed in Arizona (AZ), indicating a geographic impact on the state's defense industrial base. This contract supports specialized jobs in the guided missile and space vehicle manufacturing sector, potentially impacting the aerospace workforce in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs, despite fixed-price terms.
Dependence on a single contractor for a critical launch service could pose supply chain risks.
Long contract duration may require ongoing monitoring to ensure performance remains aligned with objectives.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Awarded through full and open competition, suggesting a competitive market for this service.
The contractor, Northrop Grumman, is a well-established defense entity with significant experience in aerospace.

Sector Analysis

The guided missile and space vehicle manufacturing sector is a highly specialized and critical component of the defense industrial base. This contract falls within the aerospace and defense industry, which is characterized by high technological barriers to entry and significant government investment. Spending in this sector is often driven by national security imperatives and technological advancements in areas like missile defense and space exploration. Comparable spending benchmarks would typically involve other large-scale missile production or launch service contracts within the Department of Defense.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Northrop Grumman, as a large prime contractor, may engage small businesses for subcontracting opportunities. However, without specific subcontracting plans or set-aside provisions, the direct impact on the small business ecosystem for this particular award is not immediately clear and would require further investigation into subcontracting goals.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force, which awarded the contract. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver the specified services at the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics and specific oversight activities are typically internal to the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Space Launch Services
Guided Missile Manufacturing
Aerospace Defense Contracts
Strategic Weapons Systems

Risk Flags

Long contract duration may increase exposure to changing technological requirements.
Dependence on specialized manufacturing processes could lead to supply chain vulnerabilities.
Potential for schedule delays in complex aerospace development projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MK21-2B TRINITY LAUNCH SERVICE

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 $22.9 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-08-25.

What is the historical spending pattern for MK21-2B Trinity Launch Service or similar launch services by the Department of Defense?

Analyzing historical spending for the MK21-2B Trinity Launch Service specifically is challenging without more granular contract data. However, the Department of Defense (DoD) consistently allocates significant funds towards space and missile programs. For instance, the Missile Defense Agency and the Space Force receive billions annually for research, development, procurement, and sustainment of related systems. Launch services, in particular, are critical for deploying satellites and intercontinental ballistic missiles (ICBMs). Past contracts for similar launch capabilities have ranged from tens of millions to hundreds of millions of dollars, depending on the payload, launch complexity, and frequency. The $22.9 million awarded to Northrop Grumman for this specific delivery order appears to be a component of a larger, potentially multi-year, program aimed at ensuring the operational readiness and modernization of critical defense assets.

How does the firm fixed-price contract type mitigate risks for the government in this launch service contract?

The firm fixed-price (FFP) contract type is a cornerstone of risk mitigation for the government in this MK21-2B Trinity Launch Service award. Under an FFP agreement, the contractor, Northrop Grumman, is obligated to perform the work and deliver the specified launch services for a predetermined price. This means that any cost overruns incurred by the contractor due to inefficiencies, material cost increases, or labor challenges are absorbed by Northrop Grumman, not the government. Conversely, if the contractor can complete the work under budget, they retain the savings. This structure incentivizes the contractor to manage costs effectively and efficiently, providing the government with significant cost certainty and predictability. It shifts the primary cost risk from the buyer (the Air Force) to the seller (Northrop Grumman), which is particularly valuable for services where cost fluctuations could otherwise be substantial.

What is Northrop Grumman's track record with similar government contracts, particularly in missile and space vehicle manufacturing?

Northrop Grumman has an extensive and well-established track record with the U.S. government, particularly within the defense and aerospace sectors. The company is a major prime contractor for numerous critical programs, including strategic deterrent systems, space technology, and advanced aircraft. They are known for their work on ICBM programs, such as the Ground Based Strategic Deterrent (G blandt) replacement for the Minuteman III, which involves significant missile manufacturing and integration expertise. Furthermore, Northrop Grumman is a key player in space systems, developing and launching satellites and other space-based assets. Their experience with complex, high-stakes projects like the MK21-2B Trinity Launch Service is substantial, encompassing design, manufacturing, testing, and integration. This history suggests a high level of technical capability and program management proficiency relevant to this contract.

What are the potential performance risks associated with a launch service contract of this duration and complexity?

Launch service contracts, especially those involving advanced missile or space vehicles, carry inherent performance risks due to their complexity and the high-stakes environment. For a contract like the MK21-2B Trinity Launch Service, potential risks include technical failures during development, testing, or the actual launch sequence, which could lead to mission failure or delays. Schedule slippage is another significant risk, as development cycles in aerospace can be lengthy and subject to unforeseen technical challenges, supply chain disruptions, or regulatory hurdles. Ensuring the reliability and safety of the launch vehicle and its payload is paramount, and any compromise in these areas poses a severe risk. Furthermore, maintaining the required performance standards over the contract's duration (over 1000 days) necessitates robust quality assurance and ongoing sustainment planning to ensure readiness and effectiveness.

How does the NAICS code 336414 (Guided Missile and Space Vehicle Manufacturing) inform our understanding of this contract's scope?

The North American Industry Classification System (NAICS) code 336414, 'Guided Missile and Space Vehicle Manufacturing,' provides crucial context for the MK21-2B Trinity Launch Service contract. This code specifically identifies businesses primarily engaged in the design, development, and manufacturing of guided missiles, space vehicles (including satellites), and related propulsion units and components. Awarding this contract under this NAICS code signifies that the core of the work involves the production or assembly of such sophisticated hardware, rather than solely services like software development or general logistics. It implies that Northrop Grumman is likely manufacturing or significantly integrating components for the MK21-2B system, which is then intended for launch. This points towards a contract focused on the physical production and readiness of a defense asset within the aerospace and defense industrial base.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

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: $39,105,852

Exercised Options: $39,105,852

Current Obligation: $22,945,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA881819D0002

IDV Type: IDC

Timeline