DoD's $254M Northrop Grumman Contract for Advanced Microelectronic Solutions Faces Scrutiny
Contract Overview
Contract Amount: $25,452,710 ($25.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-09-06
End Date: 2027-09-30
Contract Duration: 1,119 days
Daily Burn Rate: $22.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES- THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR MULTI-MISSION DRY SUBMERSIBLE, HOST CONVERSION.
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $25.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING SERVICES- THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR MULTI-MISSION DRY SUBMERSIBLE, HOST CONVERSION. Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for advanced microelectronic capability solutions. 2. The contract aims to support multi-mission dry submersible and host conversion projects. 3. Full and open competition was utilized, suggesting a competitive bidding process. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee structure introduces risk for cost overruns. Benchmarking against similar engineering services contracts is difficult without specific cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was used, which generally promotes competitive pricing. However, the Cost Plus Fixed Fee structure can sometimes obscure true price discovery.
Taxpayer Impact: Taxpayer funds are being used for advanced engineering services, with potential for cost escalation due to the contract type.
Public Impact
Supports critical defense microelectronics capabilities. Potential for technological advancements in submersible and host conversion systems. Contract duration extends over three years, indicating a significant, ongoing need.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- Lack of specific cost data makes detailed value assessment challenging.
Positive Signals
- Utilized full and open competition.
- Supports advanced technological development for defense.
Sector Analysis
This contract falls under Engineering Services, a broad category. Defense microelectronics is a specialized and critical sector within the broader defense industry, often characterized by high R&D costs and long development cycles.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within this large contract.
Oversight & Accountability
The Department of Defense's Defense Microelectronics Activity is the contracting agency. Oversight will be crucial to manage the Cost Plus Fixed Fee structure and ensure efficient use of taxpayer funds.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Lack of detailed cost breakdown for benchmarking.
- Potential for scope creep in advanced technology development.
- Dependency on a single large contractor (Northrop Grumman).
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 $25.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING SERVICES- THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR MULTI-MISSION DRY SUBMERSIBLE, HOST CONVERSION.
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 $25.5 million.
What is the period of performance?
Start: 2024-09-06. End: 2027-09-30.
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 multi-mission dry submersible and host conversion. This likely involves developing specialized chips or systems for enhanced performance, security, or functionality in underwater vehicles and associated command and control systems. The alignment with defense needs would depend on the specific technological advancements and their application to strategic defense objectives.
What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type in this context?
The primary risk with CPFF is that the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. This can incentivize cost overruns, as the contractor may not be as motivated to control expenses if they are guaranteed their costs will be covered. Effective oversight and clear performance metrics are essential to mitigate this risk and ensure value for money.
How will the effectiveness of the acquired microelectronic solutions be measured and validated?
Effectiveness will likely be measured through rigorous testing and validation protocols defined in the contract's statement of work. This would include performance benchmarks, reliability testing under operational conditions, and successful integration into the target systems (dry submersible, host conversion). Independent verification and validation by the contracting agency will be crucial to confirm the solutions meet the specified requirements.
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: $55,097,070
Exercised Options: $55,097,070
Current Obligation: $25,452,710
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: 2024-09-06
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2026-01-06
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