DoD's $24.6M R&D contract with Northrop Grumman shows long-term engagement in physical sciences

Contract Overview

Contract Amount: $24,577,085 ($24.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2004-01-01

End Date: 2013-03-31

Contract Duration: 3,377 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $24.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract duration of 9+ years suggests sustained R&D focus and potential for deep technological integration. 2. The cost-plus-fixed-fee structure indicates a need for flexibility in research scope, with potential for cost overruns. 3. Competition was full and open, suggesting a robust bidding process for this significant R&D effort. 4. The contract's value, while substantial, needs to be benchmarked against similar long-term R&D initiatives. 5. Performance context is critical given the extended timeline; outcomes and milestones achieved are key indicators of success. 6. Sector positioning within physical, engineering, and life sciences R&D highlights a focus on foundational scientific advancement.

Value Assessment

Rating: fair

Benchmarking this $24.6 million contract against similar long-term R&D efforts is challenging without more specific project details. The cost-plus-fixed-fee (CPFF) pricing structure, common in R&D where scope can evolve, suggests that the final cost might deviate from initial estimates. While the total value over nine years is significant, the true value-for-money depends heavily on the technological advancements and deliverables achieved. Without comparative data on per-unit costs or specific research outcomes, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This suggests a competitive environment that should theoretically drive better pricing and innovation. The presence of four bidders (no) implies a reasonable level of interest in this R&D opportunity, though the specific number of proposals received and the evaluation criteria would provide a clearer picture of the competition's intensity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that encourages competitive pricing and innovation, potentially leading to more cost-effective research outcomes.

Public Impact

This contract supports advancements in physical, engineering, and life sciences, potentially benefiting national security and technological innovation. The research outcomes could lead to new technologies or improved defense capabilities. The contract's duration suggests a long-term impact on the research and development landscape within the Department of Defense. Workforce implications may include specialized scientific and engineering roles, contributing to high-skill employment in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended duration (over 9 years) of a CPFF contract increases the risk of cost escalation if not managed diligently.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the actual progress and success of the R&D.
The absence of small business subcontracting information raises questions about broader economic impact and opportunities for smaller firms.

Positive Signals

Awarded under full and open competition, indicating a potentially robust and fair bidding process.
The significant investment over a long period suggests a commitment to critical research areas within the DoD.
Northrop Grumman's established presence in defense contracting implies a level of expertise and capability in executing complex R&D projects.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541710). This sector is characterized by high investment, long development cycles, and a focus on innovation. Comparable spending benchmarks would involve looking at other large-scale, multi-year R&D contracts within the defense industry or government-funded scientific research initiatives. The market size for defense R&D is substantial, with significant government funding allocated annually to maintain technological superiority.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of small business subcontracting goals. This suggests that the primary contractor, Northrop Grumman, is expected to handle the majority of the work. The lack of set-aside or subcontracting information means there's limited direct impact on the small business ecosystem for this specific award, though larger prime contractors often engage small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring regular reporting on costs, progress, and adherence to research objectives. Transparency is generally maintained through contract awards databases and reporting requirements, though specific R&D details might be sensitive. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Northrop Grumman Defense Contracts
California Defense Industry Spending
Cost Plus Fixed Fee Contracts

Risk Flags

Extended contract duration increases risk of cost escalation.
CPFF structure requires diligent cost control and oversight.
Lack of specific R&D outcome details limits performance assessment.
Potential for scope creep over a 9+ year R&D project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.

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 $24.6 million.

What is the period of performance?

Start: 2004-01-01. End: 2013-03-31.

What specific research areas within physical, engineering, and life sciences does this contract cover, and what are the key expected outcomes?

The provided data specifies the NAICS code 541710, indicating 'Research and Development in the Physical, Engineering, and Life Sciences.' However, the exact research areas and expected outcomes are not detailed. Typically, such contracts with the Department of Defense in these broad categories could encompass advanced materials, propulsion systems, sensor technology, cyber capabilities, biotechnology, or fundamental physics research. The specific focus would be determined by DoD's strategic priorities at the time of contract award and during its execution. Key outcomes would likely involve scientific discoveries, proof-of-concept demonstrations, prototype development, and technical reports that inform future defense systems or operational strategies.

How does the $24.6 million total contract value compare to other long-term R&D contracts awarded by the DoD in similar fields?

The $24.6 million total contract value over a period of approximately 9 years (January 2004 to March 2013) averages to roughly $2.7 million per year. This figure needs to be contextualized within the broader landscape of DoD R&D spending. Large-scale, multi-year R&D programs can range from tens of millions to billions of dollars. For instance, major platform development or foundational research initiatives often exceed this amount significantly. However, for specific, focused R&D efforts within a particular scientific domain, this value could represent a substantial investment. Benchmarking requires comparing it to contracts with similar scope, duration, and technological complexity, which are not fully detailed here. It appears to be a moderately sized, long-term investment rather than a flagship program.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for a 9-year R&D project?

The Cost Plus Fixed Fee (CPFF) structure, while offering flexibility for evolving R&D scopes, carries inherent risks. For the government, the primary risk is cost overrun if the contractor's actual costs exceed projections significantly, although the fixed fee provides some predictability. Contractors may have less incentive to control costs rigorously compared to fixed-price contracts, as allowable costs are reimbursed. For a 9-year project, the risk of scope creep, technological obsolescence, or shifts in strategic priorities is amplified. Effective oversight, detailed milestone tracking, and robust cost accounting are crucial to mitigate these risks and ensure the government receives value for its investment over the extended period.

Given the contract's duration, what mechanisms were likely in place to ensure contractor performance and accountability?

For a contract spanning over nine years, performance and accountability are typically managed through a phased approach with defined milestones and deliverables. The Department of Defense, likely through the Defense Contract Management Agency (DCMA), would have provided oversight. This would involve regular progress reviews, audits of incurred costs, and verification that research objectives were being met. The CPFF structure necessitates detailed reporting on expenditures and progress against a work breakdown structure. Contract modifications would be managed formally, and any deviations from the plan would require justification and approval. Ultimately, accountability is tied to the successful completion of research objectives within the agreed-upon framework and budget constraints.

What is Northrop Grumman's track record with similar long-term R&D contracts for the Department of Defense?

Northrop Grumman is a major defense contractor with extensive experience in research and development across various domains for the Department of Defense. They have a long history of executing complex, multi-year R&D programs, including those involving advanced technologies, systems integration, and scientific research. Their track record generally includes successful delivery on numerous large-scale contracts, though like any major contractor, they may have faced challenges or controversies on specific projects. Specific performance metrics for this particular $24.6 million contract would be needed to fully assess their performance in this instance. However, their status as a prime contractor suggests a demonstrated capability to manage significant R&D investments over extended periods.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1 SPACE PARK BLVD, REDONDO BEACH, CA, 90278

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline