DoD's $26M IM-SHORAD Engineering Services Contract Awarded to Northrop Grumman
Contract Overview
Contract Amount: $26,025,034 ($26.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-04-03
End Date: 2022-07-31
Contract Duration: 1,215 days
Daily Burn Rate: $21.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES: INITIAL MANEUVER-SHORT RANGE AIR DEFENSE CAPABILITY (IM-SHORAD)
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35807
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $26.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING SERVICES: INITIAL MANEUVER-SHORT RANGE AIR DEFENSE CAPABILITY (IM-SHORAD) Key points: 1. Contract awarded to a large, established defense contractor. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The sector is Defense, a high-spending area with complex requirements.
Value Assessment
Rating: fair
The contract was awarded under a Cost Plus Fixed Fee structure. While this allows for flexibility in complex projects, it carries a higher risk of cost escalation compared to fixed-price contracts. The awarded amount of $26M for 1215 days of performance needs further analysis against similar engineering services contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This method generally promotes price discovery and can lead to more competitive pricing.
Taxpayer Impact: The use of full and open competition is a positive sign for taxpayer value, as it aims to secure the best possible price through market forces.
Public Impact
Enhances U.S. Army's short-range air defense capabilities. Supports critical national defense initiatives. Potential for technological advancements in defense systems. Contract duration of over three years suggests a significant project scope.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases cost overrun risk.
- No indication of small business participation.
- Specific performance metrics and deliverables are not detailed.
Positive Signals
- Awarded via full and open competition.
- Supports critical defense capability development.
- Contractor has significant experience in defense systems.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense microelectronics. Spending in this area is substantial, driven by the need for advanced technological solutions in national security. Benchmarks for similar defense engineering contracts would be valuable for a precise comparison.
Small Business Impact
The data indicates that this contract was not awarded to small businesses (sb: false). There is no information provided on subcontracting opportunities for small businesses, which warrants further investigation to ensure fair participation.
Oversight & Accountability
The Department of Defense, through its Defense Microelectronics Activity, is the contracting agency. Oversight would typically involve program management reviews, financial audits, and performance monitoring to ensure contract objectives are met and funds are used appropriately.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- No small business participation identified.
- Lack of detailed performance metrics in provided data.
- Potential for scope creep in complex defense projects.
Tags
engineering-services, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING SERVICES: INITIAL MANEUVER-SHORT RANGE AIR DEFENSE CAPABILITY (IM-SHORAD)
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 Microelectronics Activity).
What is the total obligated amount?
The obligated amount is $26.0 million.
What is the period of performance?
Start: 2019-04-03. End: 2022-07-31.
What specific engineering services are included in the IM-SHORAD capability development, and how do they align with current and future threats?
The IM-SHORAD program aims to develop and integrate advanced air defense capabilities to counter emerging threats. Specific services likely include system design, component integration, testing, and validation of microelectronic systems for short-range air defense. The alignment with threats would depend on the specific technologies being developed, such as counter-drone capabilities or enhanced missile defense systems.
What are the potential risks associated with the Cost Plus Fixed Fee contract type for this specific project, and what mitigation strategies are in place?
The primary risk of a Cost Plus Fixed Fee contract is the potential for cost overruns, as the contractor is reimbursed for actual costs plus a fixed fee. If project scope expands or unforeseen technical challenges arise, costs can escalate beyond initial estimates. Mitigation strategies may include robust oversight, clear definition of scope, performance incentives, and regular audits to control expenditures.
How does the $26M award compare to industry benchmarks for similar defense engineering services contracts, considering the project's duration and complexity?
Without specific details on the technical complexity and deliverables, a direct benchmark is challenging. However, $26M over 1215 days (approx. 3.3 years) for a specialized defense engineering project suggests a significant investment. Comparing this to contracts for similar system development, integration, and testing within the DoD or allied nations would provide context on its cost-effectiveness.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HQ072715R0001
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
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: $26,025,034
Exercised Options: $26,025,034
Current Obligation: $26,025,034
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $827,501
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ072716D0004
IDV Type: IDC
Timeline
Start Date: 2019-04-03
Current End Date: 2022-07-31
Potential End Date: 2022-07-31 00:00:00
Last Modified: 2022-05-25
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