DoD's $35.7M Northrop Grumman Contract for Army Battle Command System Upgrade Faces Scrutiny
Contract Overview
Contract Amount: $35,684,957 ($35.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-03-05
End Date: 2028-03-31
Contract Duration: 1,487 days
Daily Burn Rate: $24.0K/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 ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR ARMY INTEGRATED BATTLE COMMAND SYSTEM CAPABILITIES UPGRADE INCLUDING JOINT TACTICAL INTEGRATED FIRE CONTROL CAPABILITIES
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35899
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $35.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR ARMY INTEGRATED BATTLE COMMAND SYSTEM CAPABILITIES UPGRADE INCLUDING JOINT TACTICAL INTEGRATED FIRE CONTROL CAPABILITIES Key points: 1. The contract aims to enhance Army Integrated Battle Command System capabilities, including joint tactical fire control. 2. Northrop Grumman Systems Corporation is the sole awardee, raising questions about competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The Defense Microelectronics Activity is the awarding agency, suggesting a focus on specialized technology.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type offers less price certainty than fixed-price contracts. Benchmarking against similar microelectronics capability solutions is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite the 'FULL AND OPEN COMPETITION' designation, the award to a single entity, Northrop Grumman Systems Corporation, warrants further investigation into the solicitation and evaluation process to ensure true competition was achieved.
Taxpayer Impact: The use of a Cost Plus Fixed Fee contract structure, especially in a competitive environment, may not be the most cost-effective approach for taxpayers if not rigorously managed.
Public Impact
Enhances critical Army command and control systems, directly impacting battlefield effectiveness. Supports modernization efforts for joint tactical operations, improving inter-service communication and coordination. Invests in advanced microelectronics, a key area for future defense technological superiority.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type.
- Single awardee despite full and open competition.
- Lack of detailed cost transparency.
Positive Signals
- Addresses critical upgrade for Army battle command.
- Focuses on advanced microelectronics capability.
- Supports joint tactical integration.
Sector Analysis
This contract falls within the Engineering Services sector, specifically focusing on advanced microelectronics for defense applications. Spending in this niche area is critical for maintaining technological advantage but requires careful oversight due to complexity and potential for cost escalation.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. Given the specialized nature of advanced microelectronics, large prime contractors like Northrop Grumman are likely to perform the majority of the work, potentially limiting direct opportunities for small businesses.
Oversight & Accountability
The use of a Cost Plus Fixed Fee contract necessitates robust oversight from the Defense Microelectronics Activity to ensure costs are reasonable and allocable, and that the fixed fee remains appropriate throughout the contract's duration.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Limited transparency on cost components.
- Questionable effectiveness of 'full and open competition' if only one viable bidder.
- Reliance on a single contractor for critical capability.
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 $35.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR ARMY INTEGRATED BATTLE COMMAND SYSTEM CAPABILITIES UPGRADE INCLUDING JOINT TACTICAL INTEGRATED FIRE CONTROL CAPABILITIES
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 $35.7 million.
What is the period of performance?
Start: 2024-03-05. End: 2028-03-31.
How was the fixed fee determined in this Cost Plus Fixed Fee contract, and does it adequately incentivize performance while ensuring value for the government?
The determination of the fixed fee in a Cost Plus Fixed Fee (CPFF) contract is typically based on factors such as the complexity of the work, the contractor's risk, and the profit margin considered reasonable for the services provided. The government should have established criteria for evaluating the proposed fee against industry benchmarks and the contractor's historical performance. Adequate incentives are often built into the contract through performance metrics and the fee structure itself, aiming to balance cost control with the achievement of technical objectives.
What specific measures are in place to mitigate cost overruns inherent in a Cost Plus Fixed Fee contract for advanced microelectronics development?
Mitigation strategies for cost overruns in CPFF contracts often include stringent cost accounting standards, regular audits, detailed progress reports, and established ceilings for allowable costs. The Defense Microelectronics Activity likely employs Earned Value Management (EVM) to track performance against cost and schedule baselines. Clear definition of scope, change control processes, and regular reviews of contractor expenditures are crucial to identifying potential overruns early and taking corrective action.
How does the 'FULL AND OPEN COMPETITION' designation reconcile with a single awardee, and what was the rationale for selecting Northrop Grumman Systems Corporation?
A 'FULL AND OPEN COMPETITION' designation means the solicitation was made available to all responsible sources, and the government intended to award to the responsible offeror whose proposal was most advantageous. A single awardee can result if only one offeror submits a proposal, or if only one offeror meets the minimum requirements and is deemed the best value. The rationale for selecting Northrop Grumman would typically be detailed in a source selection decision document, outlining why their proposal was superior based on the evaluation criteria stated in the solicitation.
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: $40,491,618
Exercised Options: $40,491,618
Current Obligation: $35,684,957
Subaward Activity
Number of Subawards: 29
Total Subaward Amount: $1,654,634
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: 2024-03-05
Current End Date: 2028-03-31
Potential End Date: 2028-03-31 00:00:00
Last Modified: 2026-01-05
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)