DoD's $18.5M R&D contract with Northrop Grumman shows long-term investment in advanced technologies

Contract Overview

Contract Amount: $18,549,524 ($18.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2005-07-20

End Date: 2008-02-29

Contract Duration: 954 days

Daily Burn Rate: $19.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

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 $18.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract awarded for research and development, indicating a focus on innovation and future capabilities. 2. The contract duration of 954 days suggests a substantial project requiring significant effort. 3. Awarded by the Department of Defense, highlighting its strategic importance for national security. 4. The 'Cost Plus Fixed Fee' structure implies that costs are reimbursed plus a fixed fee, with potential for cost overruns. 5. Northrop Grumman's extensive experience in defense contracting positions them well for this type of R&D work. 6. The contract was competed after exclusion of sources, suggesting a specific technological need or existing relationship.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables and market comparables. The 'Cost Plus Fixed Fee' (CPFF) pricing structure can lead to cost escalations if not tightly managed. While the total award value is $18.5 million, the actual final cost could vary. Comparing this to similar R&D efforts in advanced physical sciences would provide better context for value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while competition was sought, specific criteria or existing relationships likely narrowed the field of potential bidders. The exact reasons for excluding other sources are not detailed but could relate to proprietary technology, specialized expertise, or prior development work. The limited competition may impact price negotiation.

Taxpayer Impact: The limited competition means taxpayers may not have benefited from the lowest possible price that broader competition could have achieved.

Public Impact

This contract primarily benefits the Department of Defense by advancing critical research and development capabilities. The services delivered are likely to be in the realm of advanced scientific research and engineering. The geographic impact is centered in California, where Northrop Grumman Systems Corporation is located. Workforce implications include employment for highly skilled scientists, engineers, and technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize cost overruns if not rigorously monitored.
Limited competition may result in higher prices than a fully open bidding process.
The exclusion of sources requires careful justification to ensure fairness and prevent anti-competitive practices.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests a high level of technical capability.
Focus on R&D indicates investment in future technological superiority for national security.
The contract duration implies a commitment to a significant and potentially groundbreaking research effort.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The defense industry heavily invests in R&D to maintain a technological edge. Comparable spending in this sector often involves significant sums for developing next-generation systems and technologies. Northrop Grumman is a key player in this market, known for its work on advanced aerospace and defense systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss: false' and 'sb: false'. Therefore, it is unlikely to directly benefit small businesses through set-asides. However, large prime contractors like Northrop Grumman often engage small businesses as subcontractors for specialized services or components, which could indirectly impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures compliance with contract terms and quality standards. Accountability measures are inherent in the CPFF structure, requiring justification for costs incurred. Transparency is generally maintained through contract award databases, though specific R&D details may be sensitive.

Related Government Programs

Advanced Technology Development Programs
Defense Research Sciences
Aerospace Engineering Services
Systems Development Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition Impact on Price
Uncertainty of R&D Outcomes

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 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 $18.5 million.

What is the period of performance?

Start: 2005-07-20. End: 2008-02-29.

What specific research and development activities were undertaken under this contract?

The provided data does not specify the exact nature of the research and development activities. However, given the NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences) and the contractor (Northrop Grumman Systems Corporation), it is highly probable that the work involved advanced scientific research, experimental development, or engineering studies related to defense applications. This could range from materials science and propulsion systems to advanced sensor technology or electronic warfare capabilities. Further details would require access to the contract's statement of work or technical reports.

How does the $18.5 million award compare to typical R&D spending for similar projects within the DoD?

The $18.5 million award is a moderate-sized contract for R&D within the Department of Defense. The DoD's R&D budget is vast, encompassing projects that can range from a few million dollars for exploratory research to billions for major system development. This specific contract's value suggests a focused effort on a particular technological area rather than a broad, multi-year program. To provide a precise comparison, one would need to identify R&D contracts with similar NAICS codes, contract types (like CPFF), and project scopes awarded around the same period.

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

The primary risk with a CPFF contract, especially for R&D, is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a profit incentive. If the research proves more complex or expensive than initially anticipated, the government bears the cost of these overruns. Effective oversight, clear milestones, and robust cost tracking are crucial to mitigate this risk. For R&D, where outcomes can be uncertain, CPFF can encourage innovation but requires diligent management to control expenditures.

What is Northrop Grumman Systems Corporation's track record with similar DoD R&D contracts?

Northrop Grumman Systems Corporation is a major defense contractor with a long and extensive history of performing complex R&D contracts for the Department of Defense. They have a proven track record in areas such as aerospace, defense electronics, and information systems. Their experience likely includes numerous contracts involving advanced research, prototype development, and technology integration. While specific performance metrics for this particular $18.5 million contract are not detailed here, the company's overall standing suggests a high capability to execute such R&D efforts successfully.

What does the 'after exclusion of sources' clause imply about the competition for this contract?

The 'after exclusion of sources' clause indicates that the contract was not awarded under full and open competition in the broadest sense. It implies that the agency identified a need and then solicited proposals from a limited pool of potential contractors, excluding others. This exclusion could be based on factors such as unique capabilities, prior development work, proprietary technology, or specific security requirements. While competition still occurred among the selected sources, it was not open to all qualified bidders, potentially impacting the final price and the range of innovative solutions considered.

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 AFTER EXCLUSION OF SOURCES

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