DoD's $33.7M contract for microelectronics capability solutions awarded to Northrop Grumman for SOEA system

Contract Overview

Contract Amount: $33,698,438 ($33.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-24

End Date: 2026-10-31

Contract Duration: 767 days

Daily Burn Rate: $43.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED SCALED ONBOARD ELECTRONIC ATTACK (SOEA) SYSTEM.

Place of Performance

Location: BALTIMORE, ANNE ARUNDEL County, MARYLAND, 21240

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $33.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED SCALED ONBOARD ELECTRONIC ATTACK (SOEA) SYSTEM. Key points: 1. Contract aims to enhance the performance of the SOEA system through advanced microelectronic solutions. 2. The award is a Delivery Order under a larger contract, indicating phased acquisition. 3. Northrop Grumman, a major defense contractor, is the recipient of this significant award. 4. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 5. The duration of the contract is over two years, suggesting a substantial project timeline. 6. The specific NAICS code (541330) points to engineering services, aligning with the stated objective.

Value Assessment

Rating: fair

Benchmarking the value of this specific Delivery Order is challenging without knowing the total contract ceiling and the scope of work for this particular order. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D and complex projects, carries inherent risks of cost overruns if not managed diligently. The fixed fee component provides some incentive for the contractor to control costs, but the 'cost plus' element means the government bears the majority of the direct costs. Further analysis would require comparing the proposed fixed fee and estimated costs against similar microelectronics development contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of 3 bidders (as indicated by 'no': 3) is a positive sign of a competitive process. This level of competition generally helps in achieving better pricing and service terms for the government. However, the specific details of the competition, such as the number of proposals received and the evaluation criteria, are not provided, which limits a deeper assessment of its effectiveness.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs and encourages innovation by allowing the best solutions to emerge from a wide pool of potential contractors.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Microelectronics Activity, which will receive enhanced capabilities for its SOEA system. The services delivered involve acquiring progressive microelectronic capability solutions. The geographic impact is likely concentrated within the defense industrial base and potentially at specific DoD research and development facilities. Workforce implications may 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 contract type can lead to higher costs if not closely monitored.
The specific performance metrics and deliverables for this Delivery Order are not detailed, making it hard to assess success.
Reliance on a single large contractor for critical microelectronics capability could pose supply chain risks.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contract aims to improve the performance of a critical defense system (SOEA).
Northrop Grumman is a well-established defense contractor with significant experience in advanced technologies.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on advanced microelectronics and electronic attack systems. The market for defense microelectronics is highly specialized, characterized by significant R&D investment, long product development cycles, and stringent performance requirements. Spending in this area is driven by the need for technological superiority in electronic warfare and defense systems. Comparable spending benchmarks would typically be found within other DoD contracts for similar advanced electronic systems or specialized engineering services.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Northrop Grumman is a large prime contractor. While there is no direct indication of small business subcontracting plans from the provided data, large defense contracts often include subcontracting goals. The impact on the small business ecosystem would depend on whether Northrop Grumman actively seeks out and utilizes small business capabilities for specialized microelectronic components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Microelectronics Activity. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing are crucial to ensure costs are reasonable and allocable. Transparency would be enhanced through regular reporting requirements from Northrop Grumman. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Advanced Electronic Warfare Systems
Microelectronics Research and Development
Defense System Modernization
Scalable Onboard Electronic Attack (SOEA) Program

Risk Flags

Cost Plus Fixed Fee contract type requires close monitoring to control costs.
Limited public information on specific performance metrics for this Delivery Order.
Potential for supply chain dependencies on specialized microelectronic components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED SCALED ONBOARD ELECTRONIC ATTACK (SOEA) SYSTEM.

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 $33.7 million.

What is the period of performance?

Start: 2024-09-24. End: 2026-10-31.

What is the historical spending by the Defense Microelectronics Activity on microelectronics capability solutions?

Analyzing historical spending by the Defense Microelectronics Activity (DMEA) on microelectronics capability solutions requires access to detailed procurement data beyond this single contract award. However, general trends in defense spending indicate a consistent and often increasing investment in advanced microelectronics due to their critical role in modern defense systems, including electronic warfare, command and control, and intelligence, surveillance, and reconnaissance (ISR). The DMEA, specifically, is tasked with ensuring the U.S. military has access to trusted and leading-edge microelectronics. Therefore, it is reasonable to infer that DMEA's spending in this area is substantial and likely follows a pattern of strategic investment rather than ad-hoc purchases. To provide a precise historical context, one would need to aggregate DMEA's contract awards for similar services and technologies over the past several fiscal years, looking for trends in contract values, types, and the specific capabilities being acquired.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for R&D in microelectronics?

The Cost Plus Fixed Fee (CPFF) contract type is commonly used for research and development (R&D) and complex projects where the scope of work is not fully defined at the outset, or where innovation and exploration are key objectives. In CPFF, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing the contractor's profit. Compared to other contract types like Firm-Fixed-Price (FFP), CPFF offers greater flexibility for the contractor to adapt to unforeseen technical challenges and pursue innovative solutions without being penalized for cost increases directly related to R&D exploration. However, it places a higher cost risk on the government, as the final price is not known upfront and can exceed initial estimates. Other alternatives include Cost-Plus-Incentive-Fee (CPIF), which shares cost savings or overruns between the government and contractor, and Cost-Plus-Award-Fee (CPAF), where the fee is based on performance evaluations. For microelectronics R&D, CPFF is often chosen when the primary goal is technological advancement rather than strict adherence to a fixed budget and schedule, though robust oversight is essential.

What are the potential risks associated with Northrop Grumman's track record in delivering advanced microelectronic solutions?

Northrop Grumman is a major defense contractor with extensive experience in aerospace, defense, and information systems, including advanced technologies. While their track record is generally strong, potential risks associated with any large contractor, including Northrop Grumman, can include program delays, cost overruns, and challenges in integrating complex systems. Specifically for advanced microelectronics, risks might involve the contractor's ability to meet stringent performance specifications, ensure the reliability and security of the microelectronic components, and manage the supply chain for specialized materials. Past performance on similar complex R&D contracts, if available, would provide a more granular view. However, the government typically conducts thorough past performance reviews during the source selection process to mitigate these risks. The CPFF structure itself introduces a risk of cost escalation, which requires diligent government oversight regardless of the contractor's reputation.

How does the 'Progressive Microelectronic Capability Solutions' objective translate into tangible system improvements for the SOEA system?

The objective of acquiring 'Progressive Microelectronic Capability Solutions' for the Scaled Onboard Electronic Attack (SOEA) system implies a focus on enhancing the system's core functionalities through advancements in microelectronics. This could translate into several tangible improvements. For instance, it might involve incorporating next-generation microchips that offer increased processing power, reduced size, weight, and power (SWaP) consumption, or improved resistance to electronic countermeasures and environmental stressors. Such advancements could lead to a SOEA system that is more effective in detecting, identifying, and jamming enemy electronic signals, operates with greater efficiency and longer endurance, or is more adaptable to evolving threat landscapes. The 'progressive' nature suggests an iterative development process, aiming to continuously upgrade the system's capabilities over the contract's duration, ensuring it remains relevant and superior in performance against emerging threats.

What is the significance of the 'Delivery Order' award type in the context of this contract?

The award of a 'Delivery Order' signifies that this $33.7 million action is part of a larger, pre-existing contract, likely a Basic Ordering Agreement (BOA) or Indefinite Delivery/Indefinite Quantity (IDIQ) contract. This structure is common for programs that require ongoing support, services, or supplies over an extended period, where the exact quantities or timing of specific needs are not known at the outset. For the Department of Defense and the Defense Microelectronics Activity, using a Delivery Order allows for flexibility in acquiring specific microelectronic capabilities as requirements evolve or become better defined. It streamlines the procurement process for subsequent needs under the umbrella of the parent contract, which has already undergone full and open competition. This approach enables the government to respond more rapidly to technological advancements or changing operational requirements in the dynamic field of microelectronics.

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: 3

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: $44,859,907

Exercised Options: $44,859,907

Current Obligation: $33,698,438

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $5,205,065

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