Northrop Grumman awarded $2.69M contract for aging and surveillance systems by Missile Defense Agency

Contract Overview

Contract Amount: $2,687,862 ($2.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2025-03-01

End Date: 2026-08-31

Contract Duration: 548 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ORION AGING AND SURVEILLANCE

Place of Performance

Location: MAGNA, SALT LAKE County, UTAH, 84044

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $2.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ORION AGING AND SURVEILLANCE Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. The contract duration of 548 days suggests a focused scope of work. 3. Engineering services are critical for maintaining and advancing complex defense systems. 4. The contract is a delivery order under a larger unspecified contract. 5. The geographic location of performance is Utah, a state with significant defense industry presence.

Value Assessment

Rating: questionable

The contract value of $2.69 million for engineering services over approximately 18 months is difficult to benchmark without knowing the specific deliverables and the nature of the 'aging and surveillance' systems. As a sole-source award, there is no direct comparison to assess pricing competitiveness. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can lead to higher costs if not carefully managed and monitored for efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. This approach bypasses the competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The justification for a sole-source award would need to be robust, likely citing unique capabilities or proprietary technology held by Northrop Grumman.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete and can result in higher prices for taxpayers compared to competitively sourced contracts.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Missile Defense Agency, which will receive engineering services for critical surveillance systems. The services delivered are essential for the continued operation and potential upgrades of aging defense infrastructure. The geographic impact is concentrated in Utah, where the performance is expected to take place. This contract supports specialized engineering roles, potentially impacting the workforce within the aerospace and defense sector in Utah.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Cost-plus-fixed-fee contract type can incentivize higher costs if not managed stringently.
Lack of transparency regarding the specific 'aging and surveillance' systems and their criticality.
The contract is a delivery order, suggesting it's part of a larger, potentially less transparent, contracting vehicle.

Positive Signals

Award to an established contractor with presumed expertise in defense systems.
Engineering services are crucial for maintaining national security infrastructure.
Contract duration appears reasonable for the scope of engineering support.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for maintaining and upgrading complex surveillance and missile defense systems. The market for such specialized engineering services is dominated by large defense contractors with deep technical expertise and established relationships with government agencies. Benchmarking spending in this niche requires comparing similar sole-source or competitively awarded engineering support contracts for advanced defense platforms.

Small Business Impact

The contract data indicates that small business participation (ss and sb fields) is false, and the contract type is not a small business set-aside. This suggests that small businesses are unlikely to be directly involved as prime contractors. Subcontracting opportunities for small businesses are not specified in the provided data but would depend on Northrop Grumman's subcontracting plan, if any, for this specific delivery order.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential involvement from the Missile Defense Agency's Inspector General. The cost-plus-fixed-fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency would be enhanced through regular reporting requirements and audits, though the sole-source nature limits public scrutiny of the initial award decision.

Related Government Programs

Missile Defense Systems Engineering
Aerospace Engineering Services
Defense Surveillance Technology
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award limits competition.
Cost-plus-fixed-fee contract type carries inherent cost risk for the government.
Lack of specific system details hinders full assessment.
Contract is a delivery order, potentially obscuring total contract value and scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ORION AGING AND SURVEILLANCE

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 $2.7 million.

What is the period of performance?

Start: 2025-03-01. End: 2026-08-31.

What specific 'aging and surveillance' systems are covered under this contract, and what is their criticality to national security?

The provided data does not specify the exact 'aging and surveillance' systems. However, given the award to the Missile Defense Agency (MDA), these systems are likely related to the detection, tracking, and potential interception of ballistic missiles. Criticality to national security would be extremely high, as these systems form a core component of U.S. strategic defense capabilities. Further details would typically be found in the contract's statement of work (SOW) or technical exhibits, which are not publicly available in this dataset. Understanding the specific systems would allow for a more precise assessment of the engineering services required and their associated risks.

What is the historical spending pattern for similar engineering services contracts awarded by the Missile Defense Agency to Northrop Grumman?

Analyzing historical spending patterns for similar contracts requires access to a broader dataset of MDA procurements. However, Northrop Grumman is a major defense contractor with a long history of supporting MDA programs. It is probable that they have received numerous contracts for engineering, integration, and sustainment services related to various missile defense elements over the years. The value and duration of those past contracts would provide context for this $2.69 million delivery order. Without specific historical data, it's difficult to determine if this award represents a significant increase or decrease in spending for comparable services, or if it aligns with typical contract values for this type of support.

What is the justification for the sole-source award, and were any alternative sources considered?

The justification for a sole-source award is typically documented in a Justification and Approval (J&A) document. Common reasons include the existence of unique capabilities, proprietary data, or urgent and compelling needs where competition is not feasible. For Northrop Grumman, it could be argued that they possess unique expertise or intellectual property related to specific aging and surveillance systems within the MDA's portfolio. The data provided does not include the J&A, but a sole-source award implies that either no other responsible sources were found capable of meeting the requirement, or the requirement was so specialized that only one source could fulfill it. The absence of competition means taxpayers do not benefit from the price reductions that competitive bidding often yields.

How does the cost-plus-fixed-fee (CPFF) contract type influence risk and potential cost overruns for this specific contract?

The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the financial risk to the government, as the contractor is incentivized to incur costs to complete the work, while their profit (the fee) remains constant regardless of the total cost. For this $2.69 million contract, potential cost overruns could occur if the scope of engineering services is underestimated, unforeseen technical challenges arise, or if cost controls are not rigorously applied by the government. The fixed fee provides some cost certainty for the contractor's profit, but the total contract cost can fluctuate significantly based on actual expenses.

What are the performance metrics and oversight mechanisms in place to ensure the effectiveness of the engineering services provided?

Performance metrics and oversight mechanisms are crucial for CPFF contracts, especially sole-source awards. While not detailed in the provided data, typical oversight would involve regular progress reports from Northrop Grumman, technical reviews by MDA engineers, and potentially independent audits of costs. Performance metrics would likely be defined in the contract's Statement of Work (SOW), outlining deliverables, quality standards, and timelines. The effectiveness of the services would be measured against these metrics. The contract's duration of 548 days suggests a need for consistent monitoring to ensure milestones are met and the engineering support contributes to the overall readiness and sustainment of the missile defense systems.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ085921R0001

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 5000 S 8400 W, MAGNA, UT, 84044

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,612,547

Exercised Options: $3,612,547

Current Obligation: $2,687,862

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HQ085922D0002

IDV Type: IDC

Timeline