DoD's $61.4M Northrop Grumman Contract for Microelectronics Support Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $61,443,111 ($61.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-11-01
End Date: 2026-11-30
Contract Duration: 1,125 days
Daily Burn Rate: $54.6K/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 PERFORMANCE, IMPROVE RELIABILITY AND MAINTAINABILITY OF THE MICROELECTRONICS-BASED G/ATOR RSP REFRESH SYSTEM
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $61.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO IMPROVE PERFORMANCE, IMPROVE RELIABILITY AND MAINTAINABILITY OF THE MICROELECTRONICS-BASED G/ATOR RSP REFRESH SYSTEM Key points: 1. The contract aims to enhance the G/ATOR RSP Refresh System through advanced microelectronic solutions. 2. Northrop Grumman, a major defense contractor, is the sole awardee. 3. The Cost Plus Fixed Fee structure warrants close monitoring for cost overruns. 4. The Defense Microelectronics Activity oversees this critical technology support.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs compared to fixed-price contracts if not managed tightly. Benchmarking against similar engineering services contracts is difficult without more granular cost data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While the contract was awarded under full and open competition, the specific awardee is Northrop Grumman Systems Corporation. The impact on price discovery is moderate, as competition should theoretically drive competitive pricing, but the CPFF structure requires careful oversight.
Taxpayer Impact: Taxpayer funds are being used for advanced technological support, with the ultimate value dependent on the successful improvement of the G/ATOR system's performance and reliability.
Public Impact
Enhances critical military hardware (G/ATOR RSP Refresh System) for improved performance and reliability. Supports the advancement of microelectronics, a key area for national security. Contract duration extends over three years, indicating a significant, ongoing need. Awarded by the Defense Microelectronics Activity, highlighting specialized technological focus.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure can incentivize higher spending.
- Lack of detailed cost breakdown makes value assessment challenging.
- Sole awardee may limit competitive pressure on ongoing costs.
Positive Signals
- Addresses critical need for microelectronics improvement.
- Aims to enhance performance and reliability of key defense systems.
- Awarded under full and open competition.
Sector Analysis
This contract falls within the Engineering Services sector, specifically focusing on advanced microelectronics for defense applications. Spending in this niche area is driven by technological advancement and national security requirements, often involving specialized contractors.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corporation and does not mention any small business participation. Further investigation would be needed to determine if small businesses were subcontracted.
Oversight & Accountability
The Defense Microelectronics Activity is responsible for overseeing this contract. The Cost Plus Fixed Fee structure necessitates robust oversight to ensure costs remain reasonable and performance objectives are met effectively.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Limited transparency on specific cost drivers.
- Potential for cost overruns.
- Sole awardee may limit future competition.
- Complexity of microelectronics technology.
Tags
engineering-services, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO IMPROVE PERFORMANCE, IMPROVE RELIABILITY AND MAINTAINABILITY OF THE MICROELECTRONICS-BASED G/ATOR RSP REFRESH 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 $61.4 million.
What is the period of performance?
Start: 2023-11-01. End: 2026-11-30.
What specific performance improvements are expected from the microelectronics upgrade, and how will they be measured?
The contract aims to improve performance, reliability, and maintainability of the G/ATOR RSP Refresh System. Specific metrics for these improvements should be clearly defined in the contract's statement of work. Measuring these will likely involve rigorous testing, operational feedback, and comparison against baseline performance data before the upgrade.
How does the estimated cost compare to similar microelectronics upgrade projects for defense systems?
Benchmarking this $61.4 million contract is challenging without detailed cost breakdowns and specific technological comparisons. However, given the specialized nature of microelectronics and the CPFF structure, it is crucial to ensure the pricing is competitive relative to the scope and complexity of the work, and that the government is not overpaying for the services rendered.
What are the potential risks associated with relying on a single contractor for this critical technology support?
Relying on a single contractor, Northrop Grumman, for critical microelectronics support carries risks such as reduced leverage in future negotiations, potential for complacency, and a single point of failure if the contractor faces performance issues or financial instability. Mitigation strategies could include strong contract management and contingency planning.
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: $61,443,111
Exercised Options: $61,443,111
Current Obligation: $61,443,111
Subaward Activity
Number of Subawards: 11
Total Subaward Amount: $983,841
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: 2023-11-01
Current End Date: 2026-11-30
Potential End Date: 2026-11-30 00:00:00
Last Modified: 2025-12-04
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