Northrop Grumman awarded $37.8M for Space Superiority Architecture Development, a definitive contract

Contract Overview

Contract Amount: $37,789,721 ($37.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2006-11-01

End Date: 2009-04-30

Contract Duration: 911 days

Daily Burn Rate: $41.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SPACE SUPERIORITY ARCHITECTURE DEVELOPMENT

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $37.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SPACE SUPERIORITY ARCHITECTURE DEVELOPMENT Key points: 1. Contract awarded for engineering services related to space superiority architecture. 2. Significant duration of 911 days indicates a complex, long-term project. 3. Cost-plus-fixed-fee (CPFF) pricing structure may incentivize cost overruns. 4. Awarded by the Department of Defense, highlighting strategic national security interests. 5. Contractor has a substantial presence in the defense sector. 6. No small business set-aside, suggesting a focus on large, established firms.

Value Assessment

Rating: fair

The contract value of $37.8 million for engineering services over approximately 2.5 years appears moderate for a defense-related architecture development project. Without specific benchmarks for similar space superiority architecture development, a direct value-for-money assessment is challenging. However, the CPFF contract type carries inherent risks of cost escalation compared to fixed-price contracts. Further analysis would require comparing the scope and deliverables to other DoD architecture development contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was intended, specific circumstances led to the exclusion of some potential bidders. The exact reasons for exclusion are not detailed, but this suggests a potentially narrower field of competition than a truly open process. The number of bidders is not specified, making it difficult to fully assess the competitive dynamics and their impact on price discovery.

Taxpayer Impact: A limited competition may result in less competitive pricing for taxpayers compared to a fully open process with multiple bidders vying for the contract.

Public Impact

Benefits the Department of Defense by advancing capabilities in space superiority. Services delivered are critical for strategic planning and development of future space systems. Geographic impact is primarily national, supporting U.S. defense interests. Workforce implications include specialized engineering and technical roles within Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to higher final costs than anticipated.
Limited competition may reduce price pressure and potentially increase costs for taxpayers.
Lack of specific performance metrics in the provided data makes it hard to gauge efficiency.
The exclusion of sources in the competition process warrants further investigation into fairness and necessity.

Positive Signals

Awarded to a major defense contractor with established expertise in aerospace and defense.
The contract addresses a critical national security area: space superiority.
Long contract duration suggests a significant and complex undertaking, potentially leading to deep expertise development.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's focus on advanced space capabilities. The market for space superiority architecture development is highly specialized, dominated by large defense contractors with significant R&D investments and security clearances. Spending in this niche is driven by national security priorities and technological advancements in space-based systems.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false. This indicates that the primary awardee is likely a large corporation, and there is no explicit requirement for subcontracting to small businesses within the provided data. The focus is on specialized engineering services typically provided by prime contractors with extensive resources and capabilities.

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. The CPFF structure necessitates close monitoring of costs and progress to prevent overruns. Transparency is generally maintained through contract reporting requirements, though specific public access to detailed performance data may be limited due to national security considerations.

Related Government Programs

Space Systems Development
Aerospace Engineering Services
National Security Space Programs
Defense Architecture Planning

Risk Flags

Cost-plus-fixed-fee contract type
Limited competition due to source exclusion
Potential for cost overruns
National security implications may limit transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SPACE SUPERIORITY ARCHITECTURE DEVELOPMENT

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 $37.8 million.

What is the period of performance?

Start: 2006-11-01. End: 2009-04-30.

What is the specific nature of the 'Space Superiority Architecture Development' and its importance to the Department of Defense?

Space Superiority Architecture Development refers to the planning, design, and integration of systems and strategies necessary to ensure U.S. dominance in the space domain. This includes developing architectures for resilient satellite constellations, command and control systems, space situational awareness, and defensive/offensive capabilities in space. Its importance to the DoD is paramount, as space assets are critical for intelligence, surveillance, reconnaissance, communications, navigation, and missile warning. Ensuring superiority in space is vital for maintaining a strategic advantage, protecting national interests, and deterring adversaries who may seek to disrupt or deny U.S. access to or use of space.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing structures in terms of risk and value for this type of project?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex projects where the scope is not fully defined at the outset. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. While this structure provides flexibility for evolving requirements, it shifts much of the financial risk to the government. Unlike fixed-price contracts, where the contractor bears the risk of cost overruns, CPFF incentivizes the contractor to complete the work but offers less direct incentive for cost efficiency. For architecture development, where innovation and adaptation are key, CPFF can be appropriate, but it requires robust government oversight to manage costs effectively and ensure value.

What are the implications of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' for competition and pricing?

This contract type signifies that the initial solicitation was intended for full and open competition, but specific circumstances led to the exclusion of certain sources before the final award. This could occur if only a limited number of contractors possessed the unique capabilities, technology, or security clearances required, or if specific regulatory exceptions applied. The exclusion of sources inherently narrows the competitive pool, potentially leading to less robust price discovery and potentially higher prices for the government compared to a scenario with multiple, diverse bidders. The rationale behind the exclusion is critical for understanding the true level of competition achieved.

What is Northrop Grumman's track record in developing space-related architectures and systems for the DoD?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in aerospace, defense, and intelligence systems. They have a long history of developing and producing complex space systems, including satellites, payloads, and associated ground systems for various government agencies, including the DoD and intelligence community. Their portfolio includes work on strategic systems, missile defense, and advanced technologies. While specific details of their architecture development projects may be classified or proprietary, their position as a prime contractor on numerous high-value defense programs suggests a strong capability and established track record in this domain.

How does this $37.8 million contract compare to other DoD spending on space superiority initiatives?

The $37.8 million awarded to Northrop Grumman represents a specific project focused on architecture development within the broader context of DoD space superiority spending. The DoD's overall budget for space programs, including research, development, testing, and evaluation (RDT&E), procurement, and operations, amounts to tens of billions of dollars annually. This particular contract is a component of that larger investment, likely focused on the foundational planning and design phase rather than large-scale system procurement or deployment. Its significance lies in its contribution to the strategic roadmap for future space capabilities.

What are the potential risks associated with this contract, beyond the CPFF structure?

Beyond the inherent cost risks of a CPFF contract, potential risks include technological obsolescence if the architecture development does not anticipate future threats or advancements. There's also a risk of scope creep if requirements are not tightly managed, leading to delays and increased costs. Integration challenges with existing or future DoD systems could arise if the architecture is not designed with interoperability in mind. Furthermore, reliance on a single contractor for critical architecture development, even with limited competition, could pose a long-term strategic risk if that contractor faces financial instability or shifts strategic focus.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1800 GLENN CURTISS ST, CARSON, CA, 90746

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,667,705

Exercised Options: $40,667,705

Current Obligation: $37,789,721

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline