DoD's $11.7M Northrop Grumman Contract for Advanced Microelectronic Solutions Shows Strong Competition
Contract Overview
Contract Amount: $11,716,192 ($11.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-03-07
End Date: 2025-10-31
Contract Duration: 603 days
Daily Burn Rate: $19.4K/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 PRODUCE ADVANCED TECHNOLOGY SOFTWARE AND ALGORITHM SOLUTIONS.
Place of Performance
Location: WEST CHESTER, BUTLER County, OHIO, 45246
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $11.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO PRODUCE ADVANCED TECHNOLOGY SOFTWARE AND ALGORITHM SOLUTIONS. Key points: 1. Contract focuses on critical advanced technology software and algorithm solutions. 2. Full and open competition indicates a robust bidding environment. 3. Northrop Grumman's selection suggests strong technical capabilities and past performance. 4. The contract duration of 603 days allows for substantial development and integration. 5. Cost Plus Fixed Fee pricing structure requires careful oversight to manage costs. 6. The contract is a delivery order, suggesting it's part of a larger framework agreement.
Value Assessment
Rating: good
The contract's value of $11.7 million for advanced technology software and algorithm solutions appears reasonable given the specialized nature of microelectronic capabilities. Benchmarking against similar complex R&D or engineering services contracts within the Department of Defense would provide a more precise value assessment. The Cost Plus Fixed Fee (CPFF) structure necessitates diligent oversight to ensure costs remain aligned with the fixed fee and project scope, mitigating potential overruns.
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 competitive process is expected to drive fair pricing and encourage innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of interest and a competitive landscape for these advanced microelectronic solutions.
Taxpayer Impact: Taxpayers benefit from a competitive process that is likely to yield a more cost-effective solution and encourage the development of cutting-edge technologies.
Public Impact
The Department of Defense benefits from enhanced microelectronic capabilities for its systems. Advanced technology software and algorithm solutions will be produced. The contract supports the development of critical national security technologies. Workforce implications include specialized engineering and software development roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) requires robust cost tracking and oversight to prevent scope creep and ensure value for money.
- The specific nature of 'advanced technology software and algorithm solutions' may present inherent risks in development timelines and achievable outcomes.
- Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance trajectory.
Positive Signals
- Awarded under full and open competition, suggesting a strong pool of qualified bidders and competitive pricing.
- Northrop Grumman's selection implies a high level of technical expertise and a proven track record in advanced technologies.
- The contract duration of 603 days allows for substantial progress on complex technological development.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), specifically focusing on advanced microelectronics. The market for such specialized engineering and software development services is highly competitive, driven by government and commercial demand for cutting-edge technological solutions. Spending in this area is critical for maintaining technological superiority in defense and other high-tech industries. Comparable spending benchmarks would typically be found within R&D and specialized defense procurement categories.
Small Business Impact
The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. Therefore, there are no direct subcontracting implications for small businesses stemming from this award. The focus appears to be on large prime contractors with the specialized capabilities required for advanced microelectronic solutions.
Oversight & Accountability
Oversight for this Cost Plus Fixed Fee contract will likely involve rigorous monitoring of costs, progress, and adherence to the fixed fee by the Defense Microelectronics Activity and the Department of Defense. Accountability measures would be tied to contract milestones and deliverables. Transparency is facilitated by the contract's full and open competition award, with details potentially available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Advanced Technology Development Programs
- Microelectronics Research and Development
- Defense Software Engineering Services
- Algorithm Development Contracts
Risk Flags
- Cost Plus Fixed Fee (CPFF) requires diligent oversight.
- Scope definition for advanced technology can be challenging.
- Performance metrics not detailed in summary data.
Tags
defense, department-of-defense, northrop-grumman, engineering-services, advanced-technology, microelectronics, software-development, algorithm-solutions, full-and-open-competition, cost-plus-fixed-fee, delivery-order, ohio
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $11.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO PRODUCE ADVANCED TECHNOLOGY SOFTWARE AND ALGORITHM SOLUTIONS.
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 $11.7 million.
What is the period of performance?
Start: 2024-03-07. End: 2025-10-31.
What is Northrop Grumman's track record with similar advanced technology development contracts for the Department of Defense?
Northrop Grumman Systems Corporation has a long and extensive history of contracting with the Department of Defense, often in areas related to advanced technologies, aerospace, and defense systems. While specific details on their performance for 'advanced technology software and algorithm solutions' in microelectronics require deeper analysis of contract databases, the company is a major defense contractor known for its capabilities in complex engineering and development projects. Their track record generally includes successful delivery on large-scale, high-technology programs, though like any large contractor, specific project outcomes can vary. A review of their past performance ratings and any reported issues on similar contracts would be necessary for a comprehensive assessment.
How does the $11.7 million value compare to similar advanced microelectronic solutions contracts?
The $11.7 million contract value for advanced technology software and algorithm solutions in microelectronics is moderate for specialized defense development. Without specific details on the scope, complexity, and duration of comparable contracts, a precise benchmark is difficult. However, contracts for advanced R&D, specialized software, and microelectronics can range from a few million to hundreds of millions of dollars, depending on the technological maturity, scale of development, and integration requirements. Given this contract's duration (603 days) and its focus on 'progressive microelectronic capability solutions,' the value appears aligned with projects requiring significant engineering effort and specialized expertise, rather than large-scale production.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced technology development?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced technology development revolve around cost control and scope management. While the fixed fee provides a ceiling for the contractor's profit, the 'cost plus' element means the government bears the risk of cost overruns if the contractor's expenses exceed projections. For advanced technology, where R&D outcomes can be uncertain, there's a risk that costs could escalate significantly. Effective oversight is crucial to ensure that all incurred costs are reasonable, allocable, and necessary for the project's completion. Scope creep is another significant risk; without stringent change control, the project's objectives could expand, driving up costs beyond the initial estimates and potentially exceeding the fixed fee's intended profit margin.
How effective is 'full and open competition' in ensuring value for money in specialized engineering services like this?
Full and open competition is generally considered the most effective method for ensuring value for money in specialized engineering services. By allowing all responsible sources to submit bids, it fosters a competitive environment where multiple companies vie for the contract. This competition typically drives down prices, encourages innovation, and pushes contractors to offer their best technical solutions at the most competitive rates. For specialized services like advanced microelectronics, a broad competition ensures that the government can identify and select the vendor with the optimal balance of technical capability, past performance, and price. While the specific number of bidders isn't detailed here, the 'full and open' designation suggests a robust process that should yield a favorable outcome for taxpayers.
What are the potential implications of this contract on the broader microelectronics sector within the defense industrial base?
This contract, awarded to Northrop Grumman for advanced microelectronic capability solutions, has several potential implications for the broader defense industrial base. Firstly, it signals continued government investment in critical microelectronics, which is vital for national security and technological competitiveness. Secondly, it supports the development of next-generation technologies that could enhance the performance and resilience of defense systems. Thirdly, it may foster innovation within Northrop Grumman and potentially its subcontractors, driving advancements in software and algorithms. The focus on 'progressive' solutions suggests a push towards state-of-the-art capabilities, which could influence future industry standards and R&D directions in the defense microelectronics sector.
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: $11,716,192
Exercised Options: $11,716,192
Current Obligation: $11,716,192
Actual Outlays: $237,764
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: 2024-03-07
Current End Date: 2025-10-31
Potential End Date: 2025-10-31 00:00:00
Last Modified: 2025-09-18
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