DoD awards $188.7M for GMD BOOST VEHICLES to Northrop Grumman, a sole-source R&D contract

Contract Overview

Contract Amount: $188,708,231 ($188.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-09-28

End Date: 2027-02-20

Contract Duration: 1,971 days

Daily Burn Rate: $95.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: R&D

Official Description: GMD BOOST VEHICLES

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $188.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GMD BOOST VEHICLES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Research and Development focus suggests potential for innovation but also inherent risks. 3. Long performance period (2021-2027) indicates a significant, ongoing program requirement. 4. Fixed Price Incentive contract type aims to balance cost control with performance incentives. 5. Contract awarded to a large, established defense contractor. 6. Geographic location of performance is Arizona.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized R&D focus. Without competitive bids, it's difficult to ascertain if the $188.7 million represents optimal value for money. The fixed-price incentive structure attempts to mitigate cost overruns, but the initial award price is not publicly benchmarked against similar R&D efforts in the GMD program or related missile defense technologies. Further analysis would require access to cost breakdowns and independent cost estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically justified when only one vendor possesses the necessary specialized capabilities, technology, or intellectual property. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government compared to a competed procurement.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. The government relies on the contractor's proposed pricing and negotiation to ensure a fair price, which can be less effective than market-driven competition.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, receiving advanced GMD BOOST VEHICLES. The contract supports the development and enhancement of critical missile defense capabilities. Performance is concentrated in Arizona, potentially impacting the local economy and workforce in that region. The contract likely involves highly skilled engineers and scientists, contributing to the specialized defense technology sector workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and competitive pressure on pricing.
R&D contracts inherently carry risks of cost overruns and schedule delays.
Long contract duration may increase exposure to changing technological landscapes or program needs.
Fixed-price incentive contracts can still lead to significant cost increases if targets are not met efficiently.

Positive Signals

Award to a known, large defense contractor suggests a degree of reliability and established expertise.
Fixed-price incentive contract structure provides some mechanism for cost control and performance alignment.
Focus on R&D indicates investment in future technological capabilities for national security.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The Missile Defense Agency's work on Ground-Based Missile Defense (GMD) systems is a critical component of national security. Spending in this area is highly specialized, often involving long development cycles and significant investment in advanced technologies. Comparable spending benchmarks are difficult to establish due to the unique nature of GMD components and the sole-source awards common in highly specialized defense R&D.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to Northrop Grumman, a large prime contractor, suggests that the primary focus is on leveraging established capabilities rather than fostering small business participation through set-asides. This contract is unlikely to have a direct positive impact on the small business ecosystem unless Northrop Grumman voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Missile Defense Agency. Given the R&D nature and sole-source award, oversight would likely focus on technical progress, adherence to contract milestones, and cost management through the fixed-price incentive structure. Transparency may be limited due to the sensitive nature of defense R&D and the sole-source procurement. The Inspector General of the Department of Defense would have jurisdiction for audits and investigations.

Related Government Programs

Missile Defense Systems
Ground-Based Midcourse Defense (GMD)
Ballistic Missile Defense
Advanced Technology Development
Department of Defense Research and Development

Risk Flags

Sole-source award
Research and Development contract
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $188.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GMD BOOST VEHICLES

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 (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $188.7 million.

What is the period of performance?

Start: 2021-09-28. End: 2027-02-20.

What is Northrop Grumman's track record with similar GMD or missile defense contracts?

Northrop Grumman is a major defense contractor with extensive experience in aerospace and defense systems, including significant involvement in missile defense programs. They are a key player in the Ground-Based Strategic Deterrent (GBSD) program and have historically been involved in various aspects of missile defense, including sensors, interceptors, and command and control systems. Their track record with the Missile Defense Agency (MDA) and other branches of the DoD is substantial, often involving large, complex, and long-term R&D and production contracts. While specific performance metrics for past GMD contracts are not detailed here, their position as a prime contractor in this domain suggests a history of delivering complex technological solutions, albeit often with the challenges inherent in cutting-edge defense development.

How does the $188.7 million value compare to other R&D contracts for GMD components?

Direct comparison of the $188.7 million value to other GMD R&D contracts is difficult without more specific data on the scope and nature of 'BOOST VEHICLES' and comparable contract details. GMD program components can range widely in cost, from software development to hardware prototypes. However, given that this is a sole-source award to a major contractor for a significant period (2021-2027), the amount is substantial and indicative of a critical development effort. Typically, R&D contracts for advanced defense systems can run into hundreds of millions or even billions of dollars over their lifecycle. The value here should be assessed in the context of the specific technological advancements sought and the limited competitive landscape for such specialized capabilities.

What are the primary risks associated with this fixed-price incentive contract for R&D?

This contract combines elements of fixed-price and incentive contracts, aiming to control costs while encouraging performance. For R&D, the primary risks include technical uncertainty, where the desired outcomes may prove unattainable or require significantly more resources than initially estimated. The 'incentive' aspect means that cost targets are set, and deviations can impact profit margins for the contractor and potentially increase the final cost to the government if targets are missed but performance is still achieved. The fixed-price nature, even with incentives, can be challenging for R&D where scope and cost are inherently unpredictable. Risks also include potential schedule delays due to unforeseen technical hurdles and the possibility that the final product may not meet evolving operational requirements by the contract's end date.

What is the historical spending trend for GMD BOOST VEHICLES or similar R&D efforts?

Historical spending data specifically for 'GMD BOOST VEHICLES' is not publicly available in a granular format. However, the overall Ground-Based Midcourse Defense (GMD) program has seen consistent and significant investment from the Department of Defense over many years. The Missile Defense Agency's budget typically includes substantial allocations for research, development, testing, and evaluation (RDT&E) of GMD components. Spending trends for such programs are often characterized by multi-year investments, with fluctuations based on technological advancements, threat assessments, and program priorities. Large sole-source R&D contracts are common in this domain, reflecting the specialized nature of the work and the long-term commitment required for developing and fielding complex defense systems.

How does the sole-source nature of this award impact accountability and oversight?

A sole-source award inherently reduces the level of direct accountability that competition provides. When a contract is competed, multiple bidders are held accountable for their proposals and performance. In a sole-source scenario, the government relies heavily on its negotiation capabilities and the contractor's willingness to be transparent about costs and progress. Accountability often shifts towards ensuring the contractor meets the specific technical requirements and milestones outlined in the contract, with oversight mechanisms like Earned Value Management (EVM) and regular progress reviews being crucial. Oversight bodies, such as the DoD Inspector General, play a vital role in scrutinizing sole-source awards to ensure fair pricing and prevent waste, fraud, and abuse, but the initial lack of competitive pressure means these oversight functions are even more critical.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ085621R0006

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

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: $196,297,968

Exercised Options: $196,297,968

Current Obligation: $188,708,231

Actual Outlays: $62,459,022

Subaward Activity

Number of Subawards: 304

Total Subaward Amount: $66,741,061

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ085621D0001

IDV Type: IDC

Timeline