DoD's $109M Advanced Technology Support Program for Microelectronics awarded to Northrop Grumman
Contract Overview
Contract Amount: $10,907,245 ($10.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-09-18
End Date: 2026-05-31
Contract Duration: 620 days
Daily Burn Rate: $17.6K/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 ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR BASE OPERATION NETWORKS.
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $10.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR BASE OPERATION NETWORKS. Key points: 1. Contract focuses on critical microelectronic capability solutions for base operations. 2. Northrop Grumman is the sole awardee, raising questions about competition. 3. The contract's duration and cost-plus-fixed-fee structure warrant scrutiny for potential cost overruns. 4. Spending falls under Engineering Services within the Defense sector.
Value Assessment
Rating: questionable
The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs compared to fixed-price contracts. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition. However, the award itself is a delivery order, suggesting a broader contract vehicle may exist. The impact on price discovery is moderate, as competition occurred at the initial award stage.
Taxpayer Impact: Taxpayer funds are being used for advanced technological support. The effectiveness of the competition in securing the best value for taxpayers needs further evaluation.
Public Impact
Enhances critical microelectronic capabilities for national defense infrastructure. Supports advanced research and development in a key technological area. Potential for technological advancements to trickle down to other sectors. Ensures operational readiness of base networks through specialized support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure may incentivize higher spending.
- Lack of small business participation noted.
- Contract duration extends over multiple fiscal years.
Positive Signals
- Addresses a critical need for advanced microelectronic solutions.
- Awarded under full and open competition, indicating initial market engagement.
- Supports technological advancement within the Department of Defense.
Sector Analysis
This contract falls under Engineering Services, a broad category. Defense sector spending on specialized technological support like microelectronics is significant, driven by national security requirements. Benchmarks for similar advanced R&D contracts are highly variable.
Small Business Impact
The data indicates no small business participation in this contract. Efforts to ensure small businesses have opportunities to compete for subcontracts or similar prime contracts should be considered.
Oversight & Accountability
Oversight will be crucial to monitor costs and performance under the CPFF structure. The Defense Microelectronics Activity is responsible for execution, and their reporting mechanisms will be key to accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Cost-plus-fixed-fee structure
- No small business participation
- Contract duration of over 2 years
- Potential for scope creep
- Dependence on a single contractor for critical capabilities
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 $10.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR BASE OPERATION NETWORKS.
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 $10.9 million.
What is the period of performance?
Start: 2024-09-18. End: 2026-05-31.
What specific microelectronic capabilities are being developed, and how do they align with current and future defense needs?
The contract aims to acquire progressive microelectronic capability solutions for base operation networks. This likely includes advancements in chip design, manufacturing, and integration to enhance network security, processing power, and resilience against emerging threats. Alignment with defense needs is presumed due to the agency's mission, but specific technological roadmaps would provide clearer insight into future relevance.
How will the cost-plus-fixed-fee structure be managed to ensure cost efficiency and prevent potential overruns?
Effective management of a CPFF contract requires robust oversight, detailed cost tracking, and regular performance reviews. The contracting officer must establish clear milestones and performance metrics, scrutinize all incurred costs, and ensure the fixed fee remains appropriate for the defined scope. Independent cost analysis and audits may be necessary to validate expenditures and prevent unnecessary cost escalation.
What is the long-term strategy for maintaining and updating these microelectronic capabilities beyond the contract's duration?
The long-term strategy likely involves follow-on contracts, organic development within DoD, or partnerships with industry. Planning should consider technology obsolescence, evolving threat landscapes, and the need for continuous innovation. A clear transition plan from this contract to future sustainment or enhancement efforts will be critical for enduring capability.
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: $12,516,039
Exercised Options: $10,907,245
Current Obligation: $10,907,245
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $1,252,251
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: 2024-09-18
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2025-09-04
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)