DoD's $4M Directed Energy Contract with Northrop Grumman Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $3,998,863 ($4.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2014-12-01
End Date: 2028-03-01
Contract Duration: 4,839 days
Daily Burn Rate: $826/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF INTEGRATED DIRECTED ENERGY ENGINEERING&DEVELOPMENT (INDEED)
Place of Performance
Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278
Plain-Language Summary
Department of Defense obligated $4.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF INTEGRATED DIRECTED ENERGY ENGINEERING&DEVELOPMENT (INDEED) Key points: 1. The contract, awarded to Northrop Grumman, is for research and development in directed energy. 2. A significant portion of the contract value is allocated to R&D, a sector often requiring specialized expertise. 3. The 'NOT COMPETED' award raises concerns about potential overpricing and limited innovation. 4. The contract's duration and cost-plus structure warrant close examination for efficiency.
Value Assessment
Rating: questionable
The contract's cost-plus fixed fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Benchmarking against similar R&D contracts is challenging due to the specialized nature of directed energy.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition may result in the government paying more than necessary for the research and development services provided.
Public Impact
Taxpayers may be overpaying for advanced research due to the absence of competitive bidding. The lack of transparency in the procurement process could hinder public trust in defense spending. This contract could represent a missed opportunity to foster innovation and competition within the directed energy sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Awarded to a known defense contractor
- Focus on critical R&D area
Sector Analysis
This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector. Spending in this area is crucial for technological advancement but requires careful oversight to ensure value for money, especially when procured non-competitively.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors, suggesting a missed opportunity for small business participation in this high-value contract.
Oversight & Accountability
The non-competitive award necessitates robust oversight from the Department of Defense to ensure that costs are reasonable and that the contractor is meeting performance objectives. Accountability for the procurement decision and contract performance is critical.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated costs
- Limited innovation opportunities
- Lack of small business participation
- Long contract duration without clear milestones
Tags
research-and-development-in-the-physical, department-of-defense, ca, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $4.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF INTEGRATED DIRECTED ENERGY ENGINEERING&DEVELOPMENT (INDEED)
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 $4.0 million.
What is the period of performance?
Start: 2014-12-01. End: 2028-03-01.
What justification was provided for the sole-source award of this significant R&D contract, and how does it align with DoD's stated goals for promoting competition?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. For this contract, the specific justification needs to be reviewed to understand why Northrop Grumman was the only option. This should be assessed against DoD's broader objectives to foster competition and ensure fair pricing, especially in critical R&D areas.
How will the cost-plus fixed fee structure be managed to prevent cost overruns and ensure the government receives good value, given the lack of competitive pressure?
Managing a cost-plus fixed fee contract without competition requires stringent oversight. The government must meticulously track all incurred costs, ensure they are reasonable and allocable, and verify that the fixed fee remains appropriate. Performance metrics and regular audits are essential to ensure the contractor remains incentivized to control costs and deliver effectively.
What are the potential long-term implications of awarding such a substantial directed energy R&D contract non-competitively on the broader defense industrial base and innovation landscape?
Awarding significant R&D contracts non-competitively can stifle innovation by limiting opportunities for other firms to contribute their expertise and potentially develop alternative solutions. It may also concentrate critical technological development within a single entity, reducing overall industry agility and potentially leading to higher long-term costs for the government if competitive alternatives are not cultivated.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,585,833
Exercised Options: $4,585,833
Current Obligation: $3,998,863
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-12-01
Current End Date: 2028-03-01
Potential End Date: 2028-03-01 00:00:00
Last Modified: 2026-01-06
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