DoD's Northrop Grumman contract for microelectronics support valued at $22M, awarded via full and open competition
Contract Overview
Contract Amount: $22,046,294 ($22.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-08-28
End Date: 2026-05-31
Contract Duration: 1,007 days
Daily Burn Rate: $21.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO IMPROVE THE AVAILABILITY OF THE MICROELECTRONICS-BASED AIR AND MISSILE DEFENSE PLANNING AND CONTROL SYSTEM
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35811
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $22.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO IMPROVE THE AVAILABILITY OF THE MICROELECTRONICS-BASED AIR AND MISSILE DEFENSE PLANNING AND CONTROL SYSTEM Key points: 1. The contract aims to enhance the availability of critical air and missile defense systems through advanced microelectronic solutions. 2. Awarded to a single, established defense contractor, suggesting a focus on specialized capabilities. 3. The duration of over 3 years indicates a need for sustained support in a complex technological area. 4. The cost-plus-fixed-fee structure may incentivize contractor efficiency while managing inherent program risks. 5. This award falls under the Defense Microelectronics Activity, highlighting its strategic importance. 6. The contract's focus on microelectronics is crucial for maintaining a technological edge in defense planning and control.
Value Assessment
Rating: good
The contract value of $22 million over approximately 3 years appears reasonable for specialized engineering services in the defense microelectronics sector. Benchmarking against similar contracts for advanced technology support and microelectronic development would provide a more precise value-for-money assessment. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D and complex services, requires careful oversight to ensure costs remain controlled and the fixed fee is justified by the scope of work.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This approach is generally expected to foster competitive pricing and encourage innovation. The specific number of bidders is not provided, but the use of full and open competition suggests a robust bidding process was intended.
Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically leads to better pricing and a wider selection of qualified contractors, maximizing the use of public funds.
Public Impact
The primary beneficiaries are the Department of Defense, specifically units relying on the air and missile defense planning and control system. The contract delivers advanced microelectronic capability solutions, directly supporting the modernization and operational readiness of defense systems. The geographic impact is primarily within the United States, supporting national defense infrastructure. Workforce implications may 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 contracts can lead to cost overruns if not managed diligently.
- Reliance on a single large contractor may limit future competition or flexibility.
- The complexity of microelectronics requires continuous monitoring of technological advancements and contractor performance.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process.
- The contract supports a critical national security system (air and missile defense).
- Northrop Grumman is an established defense contractor with significant experience in aerospace and defense technologies.
Sector Analysis
The defense microelectronics sector is a highly specialized and critical area within the broader aerospace and defense industry. It involves the design, development, and manufacturing of advanced electronic components essential for modern military systems. Spending in this sector is driven by the need for technological superiority, enhanced performance, and increased reliability in defense applications. Comparable spending benchmarks would typically involve other contracts for advanced electronic systems, semiconductor development, or specialized engineering services for defense applications, often running into tens or hundreds of millions of dollars.
Small Business Impact
This contract does not indicate any specific small business set-aside. Given the specialized nature of advanced microelectronic solutions for defense systems, the prime contractor, Northrop Grumman, is a large business. There may be opportunities for small businesses to participate as subcontractors, but this is not explicitly detailed in the provided data. Further analysis of subcontracting plans would be needed to assess the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Microelectronics Activity (DMEA) and relevant contracting officers within the Department of Defense. Accountability measures are inherent in the CPFF contract type, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Air and Missile Defense Systems
- Microelectronics Research and Development
- Advanced Technology Support Programs
- Defense Engineering Services
- Northrop Grumman Defense Contracts
Risk Flags
- Cost-plus-fixed-fee contract type requires diligent oversight to prevent cost overruns.
- Complexity of microelectronics technology necessitates continuous monitoring of advancements and performance.
- Reliance on a single large contractor may present long-term strategic risks.
- Potential for technological obsolescence in a rapidly evolving field.
Tags
defense, northrop-grumman, microelectronics, air-and-missile-defense, engineering-services, cost-plus-fixed-fee, full-and-open-competition, department-of-defense, advanced-technology, alabama, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO IMPROVE THE AVAILABILITY OF THE MICROELECTRONICS-BASED AIR AND MISSILE DEFENSE PLANNING AND CONTROL SYSTEM
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 $22.0 million.
What is the period of performance?
Start: 2023-08-28. End: 2026-05-31.
What is Northrop Grumman's track record with similar advanced technology support contracts for the Department of Defense?
Northrop Grumman has a long and extensive history of contracting with the Department of Defense across a wide range of complex programs, including those involving advanced technologies, aerospace systems, and defense electronics. Their track record includes significant work on aircraft, spacecraft, C4ISR systems, and cyber capabilities. While specific details on 'Advanced Technology Support Programs' (ATSP) are not provided, their general experience in developing and supporting high-technology defense solutions suggests a strong capability. Past performance evaluations and contract close-out data for similar, large-scale engineering and development contracts would offer a more granular view of their performance, including adherence to schedule, budget, and technical requirements.
How does the $22 million value compare to other DoD contracts for microelectronics development and support?
The $22 million contract value for Northrop Grumman's microelectronic capability solutions appears to be within a moderate range for specialized defense engineering services. Contracts for full-scale microelectronics development, fabrication, or integration for major defense platforms can often range from tens of millions to several billion dollars. This particular award, focused on 'capability solutions' and 'planning and control systems,' suggests it might be for a specific subsystem enhancement, research, or sustainment effort rather than the development of an entirely new microelectronic architecture. Benchmarking against contracts awarded by entities like the Defense Microelectronics Activity (DMEA) or other DoD agencies for similar R&D or specialized engineering services would provide a clearer context for its relative size and scope.
What are the primary risks associated with this contract, and how are they being mitigated?
Key risks include technological obsolescence in the rapidly evolving microelectronics field, potential cost overruns inherent in Cost Plus Fixed Fee (CPFF) contracts, and performance issues in delivering advanced capability solutions. Mitigation strategies likely involve rigorous technical oversight by the Defense Microelectronics Activity (DMEA), clear performance metrics and milestones within the contract, and regular reviews of contractor progress and expenditures. The CPFF structure itself, while allowing for flexibility, necessitates strong financial controls and auditing to manage costs effectively. Furthermore, Northrop Grumman's established presence and experience in defense contracting can be seen as a mitigating factor against performance risks.
How effective is the Defense Microelectronics Activity (DMEA) in managing contracts like this to ensure program success?
The Defense Microelectronics Activity (DMEA) is specifically chartered to address the unique challenges of microelectronics for national security, including acquisition, sustainment, and research. Its specialized focus suggests a high degree of expertise in managing contracts within this domain. Effectiveness is typically measured by the DMEA's ability to deliver critical microelectronic components and solutions on time, within budget, and to the required technical specifications. While specific performance metrics for DMEA's contract management are not publicly detailed for this contract, its role in supporting vital defense systems implies a strong emphasis on program success and risk mitigation through experienced program management and technical oversight.
What are the historical spending patterns for advanced technology support and microelectronics within the DoD?
Historical spending patterns within the DoD for advanced technology support and microelectronics have consistently been substantial, reflecting the critical role these technologies play in maintaining military superiority. Budgets allocated to areas like semiconductor research, advanced materials, secure microelectronics, and specialized electronic systems have seen significant investment over decades. This spending is driven by the need to counter evolving threats, upgrade aging platforms, and develop next-generation capabilities. Trends often show increased investment in areas like trusted microelectronics, AI-enabled systems, and quantum computing applications, indicating a strategic shift towards future-oriented technologies.
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: $22,046,294
Exercised Options: $22,046,294
Current Obligation: $22,046,294
Subaward Activity
Number of Subawards: 11
Total Subaward Amount: $529,809
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: 2023-08-28
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2025-01-21
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