DoD's $33.7M R&D contract with Northrop Grumman shows long-term investment in physical sciences

Contract Overview

Contract Amount: $33,695,087 ($33.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2003-10-27

End Date: 2009-12-31

Contract Duration: 2,257 days

Daily Burn Rate: $14.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 30

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $33.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Long contract duration (2257 days) indicates a complex, multi-year research effort. 3. Cost Plus Fixed Fee (CPFF) pricing structure may incentivize cost overruns. 4. Research and Development in Physical, Engineering, and Life Sciences (NAICS 541710) is a critical area for defense innovation. 5. Contractor Northrop Grumman Systems Corporation is a major defense contractor with extensive experience. 6. The contract's value, while significant, needs to be benchmarked against similar R&D efforts.

Value Assessment

Rating: fair

The contract value of $33.7 million over approximately 6 years represents a substantial investment in R&D. Benchmarking this against similar large-scale, long-term defense R&D contracts is crucial for a definitive value assessment. The CPFF structure, while common for R&D where scope can evolve, carries inherent risks of cost escalation compared to fixed-price contracts. Without specific deliverables or milestones tied to this funding, assessing true value-for-money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. The presence of 30 bids suggests a competitive marketplace for this type of R&D. This level of competition is generally favorable for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by driving down costs and encouraging innovation from multiple sources.

Public Impact

This contract supports advancements in physical, engineering, and life sciences, potentially leading to new defense technologies. The primary beneficiary is the Department of Defense, seeking to enhance its technological capabilities. The contract is managed by the Defense Contract Management Agency, ensuring oversight. Work is likely concentrated in New York, where Northrop Grumman has significant operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed diligently.
Long contract duration increases the risk of scope creep and evolving requirements.
Lack of specific public details on deliverables makes it hard to assess R&D progress and impact.

Positive Signals

Awarded through full and open competition, indicating a healthy market and potential for innovation.
Contractor is a well-established entity with a proven track record in defense contracting.
Focus on R&D suggests investment in future technological superiority for national security.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, often involving significant investment in cutting-edge technologies. The market for defense R&D is dominated by large aerospace and defense corporations, with substantial government funding allocated annually to maintain technological superiority. Comparable spending benchmarks would involve looking at other large-scale, multi-year R&D contracts awarded by the DoD.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the nature of large-scale R&D and the prime contractor's size, it is likely that small businesses may participate as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. The focus is on prime contract performance by a large, established corporation.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration and oversight. The Cost Plus Fixed Fee (CPFF) structure necessitates close monitoring of costs and performance to ensure adherence to the fixed fee and prevent unnecessary expenditures. Transparency regarding specific R&D milestones and outcomes would enhance accountability, but such details are often sensitive for national security reasons.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Aerospace and Defense R&D
Physical Sciences Research Grants

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure
Long contract duration may indicate potential for scope creep
Limited public information on specific deliverables and outcomes

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $33.7 million.

What is the period of performance?

Start: 2003-10-27. End: 2009-12-31.

What is Northrop Grumman Systems Corporation's track record with similar R&D contracts for the Department of Defense?

Northrop Grumman Systems Corporation is a major defense contractor with a long history of performing complex research and development contracts for the Department of Defense. They have extensive experience in areas such as aerospace, defense electronics, and information systems. Their track record typically involves large, multi-year programs requiring significant technical expertise and program management capabilities. While specific performance metrics for individual contracts are often not publicly disclosed, their continued success in securing large DoD contracts suggests a generally positive performance history. However, like any large contractor, they may have faced challenges or scrutiny on specific projects, which would require a deeper dive into contract performance reports and historical data.

How does the $33.7 million value compare to other R&D contracts in physical sciences awarded by the DoD?

The $33.7 million value for this R&D contract is a significant but not extraordinary amount for a multi-year effort in the physical sciences sector for the Department of Defense. The DoD invests billions annually in R&D, with many individual contracts ranging from tens of millions to hundreds of millions of dollars, and some exceeding a billion. Contracts for fundamental research or early-stage development in areas like advanced materials, propulsion, or sensor technology can vary widely in cost depending on the scope, duration, and complexity. To provide a precise comparison, one would need to analyze a dataset of similar NAICS codes (like 541710) and contract durations awarded within a comparable timeframe to establish a robust benchmark. This contract appears to be a mid-to-large size investment for a specific R&D objective.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D revolve around cost control and potential for overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fixed fee incentivizes the contractor to control costs to maximize their profit margin, there's less inherent pressure to minimize costs compared to fixed-price contracts. If the R&D effort encounters unforeseen technical challenges or scope changes, the allowable costs can increase significantly, leading to a higher overall contract value. The government bears the risk of cost increases, while the contractor's profit is capped. Effective oversight, clear definition of allowable costs, and robust change management processes are crucial to mitigate these risks.

What does the long contract duration (2257 days) imply about the nature of the R&D work?

A contract duration of 2257 days, approximately 6.2 years, strongly implies that the research and development work is complex, long-term, and likely involves multiple phases or iterative development cycles. Such extended timelines are typical for foundational research, the development of novel technologies, or projects requiring extensive testing, validation, and refinement. It suggests that the objectives are not short-term or easily achievable within a year or two. This duration also indicates a significant commitment of resources and a strategic investment by the Department of Defense in achieving specific, advanced technological capabilities that require sustained effort and potentially evolving scientific understanding.

How does the 'Research and Development in the Physical, Engineering, and Life Sciences' category (NAICS 541710) contribute to national security?

Research and Development in the Physical, Engineering, and Life Sciences is fundamental to maintaining and advancing national security. This broad category encompasses innovations in materials science (e.g., stronger, lighter armor), energy (e.g., advanced power sources), electronics (e.g., next-generation sensors and communication), biotechnology (e.g., medical countermeasures, human performance enhancement), and advanced manufacturing. Breakthroughs in these areas can lead to superior military platforms, improved soldier protection, enhanced intelligence gathering capabilities, more effective logistics, and advanced cyber defenses. Investing in this R&D ensures that the U.S. military maintains a technological edge over potential adversaries, deterring conflict and protecting national interests.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 30

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 600 GRUMMAN ROAD WEST, BETHPAGE, NY, 03

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline