DoD awards $6.97M contract for advanced microelectronics software, with Northrop Grumman as prime

Contract Overview

Contract Amount: $6,974,486 ($7.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-09-27

End Date: 2026-09-30

Contract Duration: 1,464 days

Daily Burn Rate: $4.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES TO DEVELOP ADVANCED ALGORITHMS AND SOFTWARE SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED PLANNING SYSTEMS

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $7.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING SERVICES TO DEVELOP ADVANCED ALGORITHMS AND SOFTWARE SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED PLANNING SYSTEMS Key points: 1. Contract focuses on enhancing microelectronics-based planning systems through advanced algorithms and software. 2. The award is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 3. Northrop Grumman, a major defense contractor, is the sole awardee for this specific order. 4. The contract duration extends over three years, indicating a need for sustained development. 5. The pricing structure is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 6. This contract supports the Defense Microelectronics Activity, highlighting a focus on critical defense capabilities.

Value Assessment

Rating: fair

The contract value of $6.97 million for engineering services over approximately 1464 days (4 years) appears reasonable for specialized software development. However, without specific benchmarks for advanced algorithm development in microelectronics, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) pricing structure introduces risk, as actual costs could exceed initial estimates, though the fixed fee provides some contractor incentive. Comparing this to similar complex software development contracts within the DoD would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, this specific award is a delivery order under an existing IDIQ contract, meaning the competition likely occurred during the initial IDIQ award phase. The number of bidders for the original IDIQ is not specified, but the fact that this is a single delivery order to Northrop Grumman implies they were selected from a pool of pre-qualified vendors.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. For this specific delivery order, the competition was likely established at the IDIQ level, meaning taxpayers benefited from that initial competitive process.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its various components that rely on microelectronics-based planning systems. The contract will deliver advanced algorithms and software solutions to improve the performance and capabilities of these critical systems. The geographic impact is primarily within the United States, supporting national defense initiatives. Workforce implications include the potential for highly skilled engineering and software development jobs within Northrop Grumman and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to cost uncertainty and potential overruns if not closely monitored.
Reliance on a single large contractor for a critical capability may limit future flexibility or innovation from smaller firms.
The complexity of advanced algorithms makes performance verification and validation challenging.

Positive Signals

Awarded under full and open competition, indicating a competitive process at the IDIQ level.
Northrop Grumman is a well-established defense contractor with a track record in complex systems development.
The contract aims to improve critical defense planning systems, directly supporting national security objectives.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the development of advanced software and algorithms for microelectronics. The defense microelectronics market is a specialized niche within the broader aerospace and defense industry, characterized by high R&D investment and stringent security requirements. Spending in this area is critical for maintaining technological superiority in defense planning and operations. Comparable spending benchmarks would likely be found within other advanced software development contracts for defense applications, often involving significant R&D components.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Northrop Grumman is a large prime contractor. While large prime contractors are often required to have subcontracting plans that include goals for small business participation, the specific subcontracting opportunities or their impact on the small business ecosystem are not detailed in this award data. Further investigation into Northrop Grumman's subcontracting plan for this contract would be needed to assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense, specifically the Defense Microelectronics Activity and potentially the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the contract's performance requirements and milestones. Transparency is facilitated through contract award databases, but detailed project progress and cost breakdowns may be limited due to national security considerations. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Microelectronics Activity (DMEA) Contracts
Advanced Software Development Contracts
Microelectronics Research and Development
DoD Planning Systems Modernization
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure introduces potential for cost overruns.
Reliance on a single large contractor for a critical capability.
Complexity of advanced algorithm development may pose integration and validation challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING SERVICES TO DEVELOP ADVANCED ALGORITHMS AND SOFTWARE SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED PLANNING SYSTEMS

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 $7.0 million.

What is the period of performance?

Start: 2022-09-27. End: 2026-09-30.

What is Northrop Grumman's track record with similar advanced algorithm and software development contracts for the DoD?

Northrop Grumman has a long and extensive history of developing complex systems and software solutions for the Department of Defense. They are a major player in areas such as aerospace, defense electronics, and information systems. Their track record includes numerous contracts for advanced simulation, command and control systems, and mission planning software. While specific details on algorithm development for microelectronics-based planning systems would require deeper analysis of their past performance on similar contracts, their overall experience suggests a strong capability in this domain. However, the success of any complex development effort also depends on the specific technical challenges, program management, and evolving requirements, which can vary significantly between contracts.

How does the $6.97 million value compare to similar engineering services contracts for advanced software development within the DoD?

Benchmarking the $6.97 million value for this specific contract requires comparing it to similar engineering services contracts focused on advanced algorithm and software development for specialized defense systems. Contracts of this nature, especially those involving cutting-edge technology like microelectronics and complex planning systems, can vary widely in cost depending on the scope, duration, required expertise, and level of innovation. A preliminary assessment suggests the value is within a reasonable range for a multi-year development effort by a major contractor. However, a more precise comparison would necessitate analyzing the number of bidders, the technical complexity, the specific deliverables, and the duration of comparable contracts awarded by the DoD or other federal agencies over the past few years.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced software development?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for advanced software development is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. If the project's costs exceed initial estimates, the government bears the additional expense. This can be particularly risky in complex R&D or software development where unforeseen technical challenges or scope creep can significantly increase expenses. While the fixed fee provides the contractor with an incentive to control costs to maximize their profit, the government is still exposed to the risk of higher-than-anticipated expenditures. Effective oversight and robust cost tracking are crucial to mitigate these risks.

What is the expected program effectiveness and impact of these advanced algorithms and software solutions?

The expected program effectiveness hinges on the successful development and integration of advanced algorithms and software solutions designed to enhance microelectronics-based planning systems. The goal is to improve the performance, accuracy, and capabilities of these systems, which are critical for various defense operations. This could translate into more efficient resource allocation, better strategic planning, enhanced situational awareness, and potentially faster decision-making cycles. The ultimate impact is intended to bolster the Department of Defense's operational readiness and technological advantage. However, the actual effectiveness will depend on the technical merits of the developed solutions, their seamless integration into existing infrastructure, and their adoption and utilization by end-users within the DoD.

How has federal spending on engineering services for microelectronics and related software development evolved over the past five years?

Federal spending on engineering services related to microelectronics and advanced software development has likely seen a steady increase over the past five years, driven by national security imperatives and the rapid pace of technological advancement. Agencies like the Department of Defense (DoD), Department of Energy (DOE), and National Science Foundation (NSF) are significant investors in this domain. The focus areas often include enhancing capabilities in areas such as artificial intelligence, secure communications, advanced computing, and next-generation semiconductor technologies. While specific aggregate spending figures require detailed analysis of federal procurement data across multiple agencies and contract types, the trend generally reflects a strategic prioritization of maintaining a technological edge in these critical fields.

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: $7,695,382

Exercised Options: $7,695,382

Current Obligation: $6,974,486

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $301,389

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