DoD's $45M Northrop Grumman contract for advanced microelectronics aims to boost aircraft system performance
Contract Overview
Contract Amount: $45,134,321 ($45.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-07-10
End Date: 2026-07-31
Contract Duration: 386 days
Daily Burn Rate: $116.9K/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 ADD CAPABILITY, IMPROVE PERFORMANCE, RELIABILITY, MAINTAINABILITY OF A MICROELECTRONICS-BASED AIRCRAFT SYSTEM
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $45.1 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, IMPROVE PERFORMANCE, RELIABILITY, MAINTAINABILITY OF A MICROELECTRONICS-BASED AIRCRAFT SYSTEM Key points: 1. Contract focuses on enhancing capability, performance, reliability, and maintainability of microelectronics-based aircraft systems. 2. The award to Northrop Grumman Systems Corporation suggests a focus on established, high-capability providers. 3. Potential risks include the complexity of microelectronics integration and the cost-plus fixed-fee pricing structure. 4. Performance context is tied to improving existing aircraft systems rather than developing entirely new ones. 5. This contract falls within the Defense Microelectronics Activity's mission to support critical microelectronics needs. 6. The duration of 386 days indicates a project focused on specific enhancements rather than long-term sustainment.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more specific performance metrics and comparable projects. The Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly, though the fixed fee provides some predictability. The total award amount of $45.1 million for a 386-day period suggests a significant investment in specialized engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This approach is generally favored for ensuring fair pricing and access to the best available solutions. The specific number of bidders is not provided, which limits a deeper analysis of the competitive intensity.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs and encourages innovation by allowing a wider range of contractors to compete for government business.
Public Impact
The primary beneficiaries are the U.S. Air Force or other DoD branches operating the affected aircraft systems. Services delivered include advanced technology support and microelectronic capability solutions. The geographic impact is likely concentrated where these specific aircraft systems are deployed and maintained. Workforce implications may involve specialized engineers and technicians at Northrop Grumman and potentially at the Defense Microelectronics Activity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus fixed-fee contracts can incentivize contractors to incur costs, potentially leading to higher final prices than fixed-price contracts.
- The complexity of microelectronics and aircraft systems integration presents inherent technical risks.
- Lack of specific performance metrics makes it difficult to assess the true value-for-money proposition upfront.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- Focus on improving existing systems can leverage proven technologies for near-term gains.
- The contract is managed by the Defense Microelectronics Activity, an entity focused on critical technology needs.
Sector Analysis
This contract operates within the aerospace and defense sector, specifically focusing on engineering services for advanced microelectronics. The market for such specialized services is characterized by high barriers to entry due to technical expertise and security requirements. Comparable spending benchmarks would typically involve other DoD contracts for aircraft system upgrades and sustainment, often running into tens or hundreds of millions of dollars.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The prime contractor, Northrop Grumman, is a large aerospace and defense company, and any subcontracting would be at their discretion based on project needs.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Microelectronics Activity and the relevant Department of Defense contracting and program management offices. Accountability measures would be defined in the contract terms, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases, though detailed performance data may be sensitive.
Related Government Programs
- Aircraft Systems Modernization Programs
- Defense Microelectronics Initiatives
- Avionics Engineering Services
- Aerospace Technology Development Contracts
Risk Flags
- Cost-plus contract type may lead to cost overruns.
- Complexity of microelectronics integration.
- Limited public detail on specific performance metrics.
- Potential for scope creep in advanced technology projects.
Tags
defense, microelectronics, aircraft-systems, engineering-services, northrop-grumman, department-of-defense, defense-microelectronics-activity, cost-plus-fixed-fee, full-and-open-competition, advanced-technology, alabama
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS TO ADD CAPABILITY, IMPROVE PERFORMANCE, RELIABILITY, MAINTAINABILITY OF A MICROELECTRONICS-BASED AIRCRAFT 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 $45.1 million.
What is the period of performance?
Start: 2025-07-10. End: 2026-07-31.
What is Northrop Grumman's track record with similar DoD microelectronics contracts?
Northrop Grumman Systems Corporation has a long history of supporting the Department of Defense across various platforms, including aircraft systems. While specific details on their past microelectronics-focused contracts for aircraft system enhancements are not publicly detailed in this data, the company is a major defense contractor known for its work in aerospace, defense electronics, and information systems. Their extensive experience suggests a strong capability to handle complex projects. However, a deeper dive into their performance history on similar cost-plus contracts, including any past cost overruns or performance issues, would be necessary for a comprehensive assessment. Publicly available contract databases and DoD Inspector General reports could offer further insights into their performance on related endeavors.
How does the $45.1 million value compare to similar aircraft system enhancement contracts?
The $45.1 million award for a 386-day contract focused on microelectronic capability solutions for an aircraft system is substantial, reflecting the specialized nature of the work. Without specific details on the scope of 'progressing microelectronic capability solutions,' direct comparisons are difficult. However, major aircraft system upgrades, avionics modernization, and sustainment contracts within the DoD frequently range from tens to hundreds of millions of dollars. For instance, contracts for upgrading fighter jet avionics or enhancing the reliability of large transport aircraft can easily exceed this amount. The value here appears consistent with significant, targeted technological enhancements rather than a full system overhaul. Benchmarking would require identifying contracts with similar technical objectives and durations.
What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government may end up paying more than anticipated if the contractor's costs are higher than projected. While the 'fixed fee' component provides a defined profit margin, the 'cost plus' element means the government bears the risk of increased direct and indirect costs incurred by the contractor. This structure can potentially incentivize less cost-consciousness from the contractor compared to fixed-price contracts. Effective oversight, detailed cost tracking, and robust negotiation are crucial to mitigate these risks. The Defense Microelectronics Activity will need strong program management to ensure costs remain reasonable and that the fixed fee remains appropriate for the work performed.
How effective is the Defense Microelectronics Activity in managing such advanced technology contracts?
The Defense Microelectronics Activity (DMEA) is specifically chartered to address the unique microelectronics needs of the Department of Defense, including research, development, acquisition, and sustainment. Its mission implies a specialized understanding of the technologies involved. Managing advanced technology contracts requires deep technical expertise, agile acquisition processes, and strong program oversight to navigate rapid technological evolution and potential cost escalations. DMEA's focused mandate suggests it is well-positioned to oversee this contract. However, the ultimate effectiveness depends on the specific program managers assigned, the clarity of contract requirements, and the rigor of their oversight mechanisms, including performance monitoring and financial controls.
What is the historical spending trend for similar engineering services within the DoD's Defense Microelectronics Activity?
Historical spending data for the Defense Microelectronics Activity (DMEA) on similar engineering services would provide valuable context. While this specific contract is for $45.1 million, understanding the typical scale and frequency of DMEA's awards for advanced technology support is important. If DMEA consistently awards contracts in this range for microelectronics enhancement, it suggests this is a standard investment level. Conversely, if this award is significantly larger or smaller than historical norms, it might indicate a shift in priorities or a unique project scope. Analyzing DMEA's annual reports or contract award databases over several fiscal years would reveal trends in their spending on engineering services and technology development.
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
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: $45,134,321
Exercised Options: $45,134,321
Current Obligation: $45,134,321
Subaward Activity
Number of Subawards: 57
Total Subaward Amount: $58,333,599
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: 2025-07-10
Current End Date: 2026-07-31
Potential End Date: 2026-07-31 00:00:00
Last Modified: 2026-01-05
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