DoD's $12.1M contract for advanced microelectronics capability solutions awarded to Northrop Grumman
Contract Overview
Contract Amount: $12,133,476 ($12.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-09-25
End Date: 2027-03-31
Contract Duration: 552 days
Daily Burn Rate: $22.0K/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 RADARS.
Place of Performance
Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90277
Plain-Language Summary
Department of Defense obligated $12.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR RADARS. Key points: 1. Contract aims to enhance radar capabilities through progressive microelectronic solutions. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. Duration of 552 days indicates a medium-term project. 4. Cost Plus Fixed Fee (CPFF) contract type carries inherent cost-reimbursement risks. 5. Northrop Grumman, a major defense contractor, is the sole awardee. 6. Focus on advanced technology suggests potential for innovation and future defense applications.
Value Assessment
Rating: fair
The contract's value of $12.1 million for advanced microelectronic capability solutions is moderate for a defense contract of this nature. Without specific performance metrics or detailed cost breakdowns, it's challenging to benchmark the value for money definitively. The CPFF structure requires careful oversight to ensure costs remain reasonable and that the fixed fee adequately compensates the contractor for the effort without incentivizing excessive spending. Comparison to similar contracts for microelectronics development or radar component enhancement would be necessary for a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and innovation. The Defense Microelectronics Activity's choice of full and open competition suggests they sought the best possible solution and value from the market.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and a high-quality product or service, maximizing the return on investment.
Public Impact
The Department of Defense benefits from enhanced radar capabilities, crucial for national security. The contract supports the development of advanced microelectronic solutions, potentially leading to next-generation defense technologies. The primary geographic impact is within the defense sector, supporting military readiness. 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) contract type can lead to cost overruns if not managed diligently.
- Lack of specific performance metrics makes it difficult to assess value for money upfront.
- Sole awardee to Northrop Grumman, a large prime contractor, may limit broader industry participation.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- Focus on advanced technology development aligns with modernization goals.
- Northrop Grumman has a significant track record in defense contracting.
Sector Analysis
The defense microelectronics sector is a critical component of national security, focusing on the design, development, and manufacturing of advanced semiconductor technologies for military applications. This contract fits within the broader engineering services and specialized technology development segments of the defense industrial base. Spending in this area is often driven by the need for technological superiority and the rapid obsolescence of existing systems. Comparable spending benchmarks would typically involve R&D contracts for next-generation sensors, electronic warfare systems, and integrated circuit development for defense platforms.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole award to a large prime contractor, Northrop Grumman, there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in this award notice. The focus on advanced microelectronics might require specialized capabilities that larger firms are better positioned to provide directly, potentially limiting direct small business prime opportunities.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Microelectronics Activity (DEMA) within the Department of Defense. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures against the estimated costs and ensure the fixed fee remains appropriate. Accountability measures would involve performance reviews, milestone tracking, and adherence to technical specifications. Transparency is typically managed through contract reporting requirements and potential audits by the Defense Contract Audit Agency (DCAA) or the Inspector General.
Related Government Programs
- Advanced Technology Support Program (ATSP)
- Defense Microelectronics Activity Contracts
- Radar Systems Development
- Microelectronics Research and Development
- Department of Defense Engineering Services
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
- Sole awardee to a large prime contractor may limit broader small business participation.
- Specific performance metrics and deliverables are not detailed in the award notice, making upfront value assessment challenging.
Tags
defense, department-of-defense, northrop-grumman, microelectronics, radar, engineering-services, full-and-open-competition, cost-plus-fixed-fee, advanced-technology, california, delivery-order, medium-contract-value
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR RADARS.
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 $12.1 million.
What is the period of performance?
Start: 2025-09-25. End: 2027-03-31.
What is Northrop Grumman's track record with similar advanced technology development contracts for the DoD?
Northrop Grumman Systems Corporation has an extensive track record in developing and delivering advanced technologies for the Department of Defense, including complex electronic systems, radar components, and microelectronics. They have consistently secured large-value contracts across various defense programs. Their experience spans research and development, system integration, and sustainment for numerous platforms. While specific data on past ATSP-like contracts isn't provided here, their portfolio suggests a strong capability in handling sophisticated technological requirements. Past performance reviews and contract close-out data would offer deeper insights into their success rates, cost control, and adherence to schedules on similar projects.
How does the $12.1 million value compare to similar microelectronics capability solution contracts?
The $12.1 million contract value for advanced microelectronic capability solutions is within a moderate range for specialized defense technology development. Contracts in this domain can vary significantly, from smaller R&D grants in the millions to large-scale production or integration efforts costing hundreds of millions or even billions. For context, contracts focused on next-generation semiconductor fabrication or advanced sensor integration might command higher figures. However, for acquiring specific progressive microelectronic capabilities for radar systems, $12.1 million represents a substantial investment. A direct comparison would require analyzing contracts with similar scopes, technological maturity levels, and specific deliverables within the defense microelectronics sector.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced technology?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract, like this one for advanced microelectronics, is that the government bears the cost risk. While the contractor's profit is fixed, they are reimbursed for allowable costs incurred. This structure can incentivize less cost-consciousness from the contractor, potentially leading to cost overruns if not rigorously managed. The government might end up paying more than anticipated if the contractor's actual costs exceed initial estimates significantly. Effective oversight, detailed cost tracking, and clear definition of 'allowable costs' are critical to mitigate these risks and ensure the fixed fee remains fair compensation for the effort expended.
What is the expected impact of these advanced microelectronic solutions on radar system performance?
The contract aims to acquire 'progressive microelectronic capability solutions for radars.' This implies that the developed microelectronics are intended to enhance the performance, efficiency, or functionality of existing or future radar systems. Potential impacts could include improved signal processing, reduced size, weight, and power (SWaP) requirements, enhanced resistance to electronic countermeasures, increased operational range, or the ability to detect smaller or faster targets. The specific nature of the 'progressive' capabilities will dictate the precise performance gains, which are likely tied to advancements in areas like gallium nitride (GaN) or silicon carbide (SiC) semiconductors, advanced packaging, or novel circuit designs tailored for radar applications.
How has spending on defense microelectronics evolved over the past five years?
Spending on defense microelectronics has generally seen an upward trend over the past five years, driven by the increasing reliance on advanced electronics for modern military capabilities and concerns about supply chain security, particularly regarding foreign-sourced components. The DoD has prioritized investments in domestic microelectronics manufacturing, research and development, and secure supply chains. This includes funding for initiatives aimed at developing next-generation chips, enhancing radiation hardening, and ensuring the integrity of the semiconductor supply chain. While specific aggregate spending figures fluctuate annually based on budget allocations and program priorities, the strategic importance placed on this sector indicates sustained or increasing investment.
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: $12,133,476
Exercised Options: $12,133,476
Current Obligation: $12,133,476
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $238,167
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: 2025-09-25
Current End Date: 2027-03-31
Potential End Date: 2027-03-31 00:00:00
Last Modified: 2025-09-25
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