DoD's $286M contract for MRBM T3C2 supports BMDS flight tests, awarded to Northrop Grumman
Contract Overview
Contract Amount: $285,860,753 ($285.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2016-07-21
End Date: 2024-09-30
Contract Duration: 2,993 days
Daily Burn Rate: $95.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE INCENTIVE
Sector: R&D
Official Description: MEDIUM RANGE BALLISTIC MISSILE TYPE 3 CONFIGURATION 2 (MRBM T3C2) TO MEET THE BALLISTIC MISSILE DEFENSE SYSTEM (BMDS)FLIGHT TEST PROGRAM NEEDS.
Place of Performance
Location: CHANDLER, MARICOPA County, ARIZONA, 85286
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $285.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MEDIUM RANGE BALLISTIC MISSILE TYPE 3 CONFIGURATION 2 (MRBM T3C2) TO MEET THE BALLISTIC MISSILE DEFENSE SYSTEM (BMDS)FLIGHT TEST PROGRAM NEEDS. Key points: 1. Contract awarded to Northrop Grumman for critical missile defense system testing. 2. Significant investment in R&D for advanced missile defense capabilities. 3. Fixed Price Incentive contract type aims to balance cost and performance. 4. Potential for long-term sustainment and follow-on contracts.
Value Assessment
Rating: good
The $285.86 million contract value appears reasonable for a complex R&D effort supporting a national security program like BMDS. Benchmarking against similar large-scale defense R&D contracts would provide further context.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process that should drive price discovery. The fixed-price incentive structure allows for shared savings if costs are below target.
Taxpayer Impact: Taxpayer funds are being used to advance critical missile defense capabilities, enhancing national security.
Public Impact
Enhances national security by advancing missile defense technology. Supports the development and testing of systems crucial for protecting against ballistic missile threats. Contributes to technological advancements in aerospace and defense R&D.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in R&D projects.
- Long contract duration may require ongoing oversight.
- Dependence on a single contractor for a critical component.
Positive Signals
- Awarded through full and open competition.
- Fixed Price Incentive contract type aligns incentives.
- Supports a vital national security program.
Sector Analysis
This contract falls within the Research and Development sector, specifically for physical and engineering sciences. Spending in this area is crucial for maintaining technological superiority and national defense capabilities, with significant government investment typical for advanced weapon systems.
Small Business Impact
The data indicates this contract was not set aside for small businesses, and the prime contractor is a large corporation. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award.
Oversight & Accountability
The Missile Defense Agency, as the contracting activity, is responsible for oversight. The fixed-price incentive contract structure includes performance targets that require monitoring to ensure cost efficiency and program success.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Complexity of R&D projects leading to potential cost overruns.
- Long contract duration (2016-2024) requires sustained oversight.
- Dependence on a single contractor for a critical component.
- Potential for evolving threat landscape requiring program adaptation.
- Integration challenges with existing BMDS components.
Tags
research-and-development-in-the-physical, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $285.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MEDIUM RANGE BALLISTIC MISSILE TYPE 3 CONFIGURATION 2 (MRBM T3C2) TO MEET THE BALLISTIC MISSILE DEFENSE SYSTEM (BMDS)FLIGHT TEST PROGRAM NEEDS.
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 (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $285.9 million.
What is the period of performance?
Start: 2016-07-21. End: 2024-09-30.
What is the projected return on investment for this R&D expenditure in terms of enhanced missile defense capabilities?
The return on investment is primarily measured by the successful development and deployment of effective missile defense systems, thereby deterring potential adversaries and protecting national interests. Quantifying this in monetary terms is challenging, but the strategic value of preventing catastrophic attacks is immense.
What are the key performance metrics and risk mitigation strategies for this contract?
Key performance metrics likely include successful integration of the MRBM T3C2 with the BMDS, achieving specific flight test objectives, and meeting technical specifications. Risk mitigation strategies would involve rigorous testing, phased development, contingency planning for technical challenges, and close collaboration between the contractor and the agency.
How does the cost of this contract compare to similar R&D efforts in missile defense technology?
Benchmarking requires access to data on comparable R&D programs. However, given the complexity and national security implications of ballistic missile defense, costs can be substantial. The fixed-price incentive structure suggests an effort to control costs relative to performance outcomes.
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: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ014715R9000
Offers Received: 3
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $501,962,257
Exercised Options: $293,059,207
Current Obligation: $285,860,753
Actual Outlays: $2,873,056
Subaward Activity
Number of Subawards: 2742
Total Subaward Amount: $943,117,649
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-07-21
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-07-08
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