DoD awards Northrop Grumman $32.3M for B-1 bomber microelectronics support, extending through May 2024

Contract Overview

Contract Amount: $32,343,573 ($32.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2020-09-17

End Date: 2024-05-31

Contract Duration: 1,352 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES - PROVIDE HARDWARE AND SOFTWARE SOLUTIONS TO RESOLVE OBSOLESCENCE ISSUES, IMPROVE RELIABILITY, IMPROVE MAINTAINABILITY AND IMPROVE AVAILABILITY OF THE MICROELECTRONICS-BASED B-1 RVSP AND RTI.

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING SERVICES - PROVIDE HARDWARE AND SOFTWARE SOLUTIONS TO RESOLVE OBSOLESCENCE ISSUES, IMPROVE RELIABILITY, IMPROVE MAINTAINABILITY AND IMPROVE AVAILABILITY OF THE MICROELECTRONICS-BASED B-1 RVSP AND RTI. Key points: 1. Contract aims to resolve obsolescence and improve reliability of critical B-1 bomber systems. 2. Full and open competition suggests a potentially competitive bidding process. 3. Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns. 4. Northrop Grumman, a major defense contractor, is the sole awardee. 5. The contract duration of over three years indicates a significant, long-term need. 6. Focus on microelectronics suggests a specialized and high-tech area of support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service costs. The CPFF structure, while common for complex R&D or services where costs are uncertain, can lead to higher final prices compared to fixed-price contracts. The total award amount of $32.3 million over approximately 3.5 years averages to about $9.2 million annually, which may be reasonable for specialized engineering services on a major weapon system, but requires further cost breakdown analysis to confirm value for money.

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 were likely solicited. However, only one award was made to Northrop Grumman Systems Corporation. The level of competition that led to a single award needs further examination; it could mean that while the opportunity was open, only one offeror met the stringent requirements or submitted a competitive proposal. This scenario can sometimes limit price discovery compared to contracts with multiple competing bids.

Taxpayer Impact: Taxpayers benefit from the initial open competition, which theoretically drives down costs. However, the single award necessitates scrutiny to ensure the price reflects true market value and isn't inflated due to a lack of sustained competitive pressure post-award.

Public Impact

The primary beneficiaries are the U.S. Air Force and the operational readiness of the B-1 Lancer bomber fleet. Services delivered include hardware and software solutions to enhance microelectronics. The geographic impact is primarily within the U.S. Air Force's operational and maintenance infrastructure. Workforce implications include specialized engineering and technical roles within Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher costs if not closely managed.
Sole awardee from a full and open competition raises questions about the breadth of actual competition.
Obsolescence resolution is a complex and potentially costly undertaking.
Reliance on a single contractor for critical system support could pose long-term risks.

Positive Signals

Addressing microelectronics obsolescence is crucial for maintaining the B-1 bomber's long-term viability.
Full and open competition, even with a single award, suggests an attempt to leverage the market.
Northrop Grumman's established role as a defense prime contractor implies significant expertise in this domain.
The contract specifies improvements in reliability and availability, directly impacting mission effectiveness.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on aerospace engineering services and sustainment for a major weapon system. The market for defense engineering services is dominated by large prime contractors like Northrop Grumman, who possess the specialized knowledge and security clearances required. Spending on sustainment and modernization of aging platforms like the B-1 bomber is a significant portion of the defense budget, often involving complex, long-term contracts to address technological obsolescence and maintain operational readiness.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Northrop Grumman, there may be subcontracting opportunities for small businesses, but this is not explicitly detailed in the provided information. The focus on specialized microelectronics support might limit the scope for typical small business participation unless they possess niche expertise.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be embedded within the contract's terms, including performance standards, reporting requirements, and payment milestones tied to deliverables. Transparency is generally limited for specific defense contracts due to national security considerations, but contract awards and basic details are publicly available through systems like FPDS.

Related Government Programs

B-1 Bomber Sustainment Programs
Air Force Weapon System Support Contracts
Aerospace Engineering Services
Microelectronics Research and Development
Defense Contractor Logistics Support

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Technical Complexity of Obsolescence Resolution
Potential for Limited Post-Award Competition
Long-Term Contractor Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING SERVICES - PROVIDE HARDWARE AND SOFTWARE SOLUTIONS TO RESOLVE OBSOLESCENCE ISSUES, IMPROVE RELIABILITY, IMPROVE MAINTAINABILITY AND IMPROVE AVAILABILITY OF THE MICROELECTRONICS-BASED B-1 RVSP AND RTI.

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 $32.3 million.

What is the period of performance?

Start: 2020-09-17. End: 2024-05-31.

What is Northrop Grumman's track record with the B-1 program and similar microelectronics sustainment contracts?

Northrop Grumman has a long history as a prime contractor for the B-1 bomber, involved in various sustainment, upgrade, and modernization efforts throughout its operational life. Their extensive experience with complex aerospace platforms and integrated systems, including avionics and electronic warfare, positions them as a logical choice for microelectronics support. While specific details on past microelectronics sustainment contracts are not provided, their overall performance on the B-1 program, which has included managing obsolescence issues and integrating new technologies, suggests a capable, albeit expensive, partner. Evaluating their performance on this specific contract will require monitoring cost performance, schedule adherence, and the effectiveness of the technical solutions implemented.

How does the $32.3 million award compare to historical spending on B-1 bomber engineering services?

Directly comparing this $32.3 million award to historical spending requires access to detailed historical contract data for the B-1 program, specifically for engineering services related to microelectronics. Annual spending on the B-1 program fluctuates based on modernization priorities, depot maintenance schedules, and operational tempo. However, $32.3 million spread over approximately 3.5 years (average ~$9.2M/year) for specialized engineering services addressing obsolescence on a major weapon system is likely within the expected range for such critical support. Without granular historical data, it's difficult to definitively state if this represents an increase or decrease, but it reflects an ongoing investment in maintaining the platform's technological relevance.

What are the primary risks associated with resolving microelectronics obsolescence on the B-1 bomber?

The primary risks associated with resolving microelectronics obsolescence on the B-1 bomber are multifaceted. Technical risks include the difficulty in finding direct replacements for outdated components, the potential need for redesigns, integration challenges with existing systems, and ensuring the reliability and performance of new or refurbished components. Schedule risks arise from the complexity of the work, potential delays in sourcing parts or technology, and the need for extensive testing and validation. Cost risks are significant, as unforeseen technical challenges or the need for extensive redesign can drive costs well beyond initial estimates, especially under a Cost Plus Fixed Fee (CPFF) contract. Furthermore, there's a risk that the solutions implemented may not fully restore the original performance or may introduce new vulnerabilities.

How effective are Cost Plus Fixed Fee (CPFF) contracts in managing specialized engineering services like this?

Cost Plus Fixed Fee (CPFF) contracts are often used for research and development or complex services where the scope and costs are difficult to define precisely upfront. Their effectiveness hinges on robust government oversight and contractor diligence. The 'cost-plus' aspect means the government reimburses the contractor for allowable costs, while the 'fixed fee' provides the contractor with a predetermined profit margin. This structure can incentivize contractors to incur costs to maximize their fee if not properly managed, potentially leading to cost overruns. However, it also allows flexibility to adapt to evolving technical requirements. For specialized engineering services addressing obsolescence, CPFF can be effective if the government actively monitors costs, ensures efficient practices, and negotiates the fee appropriately based on risk and complexity. Without strong oversight, CPFF contracts can be less cost-efficient than fixed-price alternatives.

What is the strategic importance of maintaining the B-1 bomber's microelectronics systems?

Maintaining the B-1 bomber's microelectronics systems is strategically vital for several reasons. The B-1 is a key component of the U.S. nuclear triad and a significant part of the conventional long-range strike capability. Its advanced avionics, targeting systems, and electronic warfare suites rely heavily on sophisticated microelectronics. Obsolescence in these areas can degrade performance, reduce reliability, increase maintenance costs, and potentially render critical mission functions inoperable. Addressing obsolescence ensures the bomber remains operationally effective, survivable in contested environments, and capable of fulfilling its strategic deterrence and strike missions for its extended service life. Failure to maintain these systems could compromise mission success and strategic readiness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

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: $33,258,176

Exercised Options: $33,258,176

Current Obligation: $32,343,573

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $3,589,688

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