DoD's $19.3M contract for microelectronics solutions to enhance counter-UAS capabilities awarded to Northrop Grumman

Contract Overview

Contract Amount: $19,320,273 ($19.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-17

End Date: 2026-03-31

Contract Duration: 560 days

Daily Burn Rate: $34.5K/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 OF THE MICROELECTRONICS-BASED INTERFACES TO SUPPORT COUNTER-UNMANNED AERIAL SYSTEMS (C-UAS)

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 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 OF THE MICROELECTRONICS-BASED INTERFACES TO SUPPORT COUNTER-UNMANNED AERIAL SYSTEMS (C-UAS) Key points: 1. Contract aims to boost performance of microelectronics interfaces for counter-unmanned aerial systems. 2. Focus on advanced technology support suggests a need for cutting-edge solutions in a critical defense area. 3. The use of a Cost Plus Fixed Fee (CPFF) contract type warrants scrutiny for cost control. 4. Northrop Grumman, a major defense contractor, brings significant experience to this specialized field. 5. The contract's duration of 560 days indicates a focused, project-based effort rather than long-term sustainment. 6. Geographic focus on California may indicate proximity to key research or operational facilities.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to its specialized nature and the limited public data on comparable microelectronic support solutions for C-UAS. The contract value of $19.3 million over approximately 1.5 years appears reasonable for advanced engineering services in a high-tech defense sector. However, the Cost Plus Fixed Fee (CPFF) structure requires careful monitoring to ensure costs do not escalate beyond initial projections and that the fixed fee remains appropriate for the effort expended.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. This competitive process is generally favorable for price discovery and ensuring the government receives competitive offers. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was sought.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down prices through market forces, leading to better value for the government.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units requiring enhanced counter-unmanned aerial system capabilities. The contract delivers advanced technology support solutions for microelectronic interfaces. The geographic impact is primarily centered in California, where the contract is managed or performed. Workforce implications include specialized engineering and technical roles within Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to incur costs, requiring diligent oversight to manage expenditures effectively.
The specialized nature of microelectronics and C-UAS technology may limit the pool of truly competitive bidders in the future.
Reliance on a single large prime contractor like Northrop Grumman could limit opportunities for smaller, innovative firms in the supply chain.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests a high level of technical capability and program management experience.
Full and open competition, while not guaranteeing the lowest price, provides a structured process for selecting the best technical and cost solution.
The focus on advanced technology for C-UAS addresses a critical and evolving national security need.

Sector Analysis

The defense microelectronics sector is a critical component of national security, focusing on the design, development, and manufacturing of advanced semiconductor and integrated circuit technologies. This contract fits within the broader defense engineering services market, which is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this area is driven by the need to maintain technological superiority against potential adversaries, particularly in rapidly evolving fields like unmanned systems and electronic warfare. Comparable spending benchmarks are difficult to ascertain due to the proprietary nature of much defense R&D, but significant government investment is consistently allocated to maintaining a secure and advanced domestic microelectronics industrial base.

Small Business Impact

This contract does not indicate any specific small business set-aside. As a large prime contract awarded to Northrop Grumman, there may be opportunities for small businesses to participate as subcontractors. However, the nature of advanced microelectronics support may require highly specialized capabilities, potentially limiting the scope of work available for broad subcontracting to small businesses unless specific set-aside goals are mandated by the agency.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Microelectronics Activity (DMEA) and the contracting officer's representative (COR). Northrop Grumman, as a major defense contractor, is subject to various oversight mechanisms, including audits and performance reviews. Transparency is typically managed through contract reporting requirements. The Inspector General of the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Counter-Unmanned Aerial Systems (C-UAS) Programs
Advanced Microelectronics Research and Development
Defense Industrial Base Modernization
Department of Defense Engineering Services Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage potential cost escalations.
Specialized nature of microelectronics and C-UAS technology may limit the competitive landscape.
Reliance on a single large prime contractor could impact broader market innovation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED INTERFACES TO SUPPORT COUNTER-UNMANNED AERIAL SYSTEMS (C-UAS)

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 $19.3 million.

What is the period of performance?

Start: 2024-09-17. End: 2026-03-31.

What is Northrop Grumman's track record with similar advanced technology support contracts for the Department of Defense, particularly in microelectronics?

Northrop Grumman has a long and extensive history of supporting the Department of Defense across a wide range of advanced technology programs, including significant work in aerospace, defense electronics, and information systems. While specific details on their past microelectronics support contracts for C-UAS may be classified or proprietary, the company is a recognized leader in developing and integrating complex electronic systems. Their portfolio includes work on radar, electronic warfare systems, and integrated circuits, all of which are relevant to the capabilities required for this ATSP contract. Past performance evaluations on similar large-scale, high-technology contracts would be a key factor in their selection, suggesting a demonstrated ability to manage complex projects, meet stringent technical requirements, and deliver within budget and schedule constraints, though CPFF contracts always require vigilant oversight.

How does the $19.3 million contract value compare to industry benchmarks for similar advanced microelectronics engineering services?

Directly comparing the $19.3 million value to industry benchmarks for 'advanced technology support' in microelectronics for C-UAS is challenging due to the highly specialized and often classified nature of this work. Standard engineering service rates do not fully capture the unique R&D, specialized equipment, and security requirements involved. However, considering the complexity of microelectronics, the critical defense application (C-UAS), and the involvement of a major defense contractor like Northrop Grumman, this value appears within a plausible range for a project spanning approximately 1.5 years. It suggests a focused effort on developing or enhancing specific capabilities rather than a broad, long-term sustainment program. Without more granular data on the specific deliverables and labor categories, a precise benchmark is difficult, but the amount reflects the high-skill, high-cost nature of cutting-edge defense technology development.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure for the government?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract structure for the government is the potential for cost overruns. While the 'fixed fee' component provides a ceiling on the contractor's profit, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the contractor's actual costs exceed initial estimates, the government pays more. This structure can sometimes disincentivize aggressive cost control by the contractor, as their profit is fixed regardless of the total cost. Effective oversight, detailed cost tracking, and robust auditing are crucial to mitigate this risk and ensure the government is not paying excessively for the services rendered. The government must ensure that all costs claimed are reasonable, allocable, and allowable under the contract terms.

How effective is the 'full and open competition' approach likely to be in ensuring optimal value for this specialized defense contract?

The 'full and open competition' approach is generally the most effective method for ensuring optimal value, as it maximizes the pool of potential bidders and fosters a competitive environment that drives down prices and encourages innovation. For this specialized contract in advanced microelectronics for C-UAS, its effectiveness hinges on whether a sufficient number of qualified vendors could realistically compete. If the technical requirements are so niche that only a few companies possess the necessary expertise and security clearances, the competition might be less robust than intended, potentially limiting price reductions. However, the 'full and open' designation signals an intent to achieve the best possible outcome through market forces, and it provides a transparent process for selecting the offer that best balances technical merit and cost.

What are the potential implications of this contract on the broader counter-unmanned aerial systems (C-UAS) technology landscape?

This contract, by focusing on 'advanced technology support' for 'microelectronic capability solutions' to improve interfaces for C-UAS, has the potential to significantly impact the technological landscape. Improvements in microelectronics can lead to more efficient, powerful, and potentially smaller C-UAS systems, enhancing their detection, tracking, and neutralization capabilities. This could involve advancements in sensor processing, communication systems, or the electronic components within the C-UAS platforms themselves. Such advancements are critical given the increasing proliferation and sophistication of unmanned aerial threats. The success of this contract could spur further investment and innovation in related areas, potentially leading to next-generation C-UAS solutions that offer improved performance, reduced costs, or new operational paradigms.

Are there any historical spending patterns within the Defense Microelectronics Activity (DMEA) or DoD for similar microelectronics support that this contract aligns with or deviates from?

Analyzing historical spending patterns for DMEA or the broader DoD on 'advanced technology support' for microelectronics related to C-UAS is challenging due to the classified or sensitive nature of such programs. However, it is well-documented that the DoD consistently invests billions annually in microelectronics research, development, and acquisition to maintain technological superiority. This includes efforts to secure the supply chain, develop next-generation chips, and integrate advanced electronic capabilities into weapon systems. Contracts like ATSP, focused on enhancing specific system interfaces through microelectronic solutions, represent a segment of this larger investment strategy. Without access to specific historical contract data for DMEA or comparable C-UAS microelectronics projects, it's difficult to state definitively if this $19.3 million award aligns with or deviates from past patterns; however, it reflects the ongoing strategic priority placed on advanced electronics for critical defense applications.

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: $19,320,273

Exercised Options: $19,320,273

Current Obligation: $19,320,273

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $811,094

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