DoD's $29M R&D contract for high-speed data backbone awarded to Northrop Grumman

Contract Overview

Contract Amount: $29,113,548 ($29.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2015-09-28

End Date: 2019-06-14

Contract Duration: 1,355 days

Daily Burn Rate: $21.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF - 100 GB/S RF BACKBONE PHASE 2

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $29.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF - 100 GB/S RF BACKBONE PHASE 2 Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Northrop Grumman Systems Corp. secured this definitive contract. 3. The contract duration was 1355 days, spanning from September 2015 to June 2019. 4. This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences category. 5. The contract was awarded under full and open competition. 6. The contract type was Cost Plus Fixed Fee. 7. The contract was awarded by the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and the lack of directly comparable public data. The Cost Plus Fixed Fee (CPFF) structure means costs can fluctuate, making a precise value-for-money assessment difficult without detailed cost breakdowns. However, the fixed fee component provides some incentive for the contractor to manage costs efficiently. The total award amount of approximately $29 million over nearly four years suggests a significant investment in developing advanced technological capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple bidders were likely considered. This approach generally promotes competitive pricing and allows the government to select the most capable and cost-effective solution. The presence of 3 bids suggests a reasonable level of interest and competition for this specialized R&D effort.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value by fostering a competitive environment that can drive down prices and encourage innovation.

Public Impact

This contract supports advancements in physical, engineering, and life sciences research. The research is expected to contribute to the Department of Defense's technological capabilities. The contract was awarded to a major defense contractor, potentially impacting the aerospace and defense sector workforce. The geographic impact is primarily associated with the contractor's operations in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
The specialized nature of R&D makes it difficult to benchmark performance and value against similar contracts.
Long contract durations can sometimes indicate complexity or potential for scope creep.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
The contract aims to advance critical research and development for the Department of Defense.
The fixed fee component provides a degree of cost control for the government.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, aiming to develop next-generation technologies. The market for such specialized R&D is often dominated by large, established defense contractors with significant expertise and resources. Comparable spending benchmarks are difficult to establish due to the unique nature of R&D projects, but significant government investment in defense R&D is common.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor is Northrop Grumman Systems Corp, a large aerospace and defense company. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract award is likely limited, though large prime contractors often engage small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee is justified. Transparency in R&D contracts can be limited due to the proprietary nature of the research, but reporting requirements would be defined in the contract.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Northrop Grumman Defense Contracts

Risk Flags

Cost Overruns Possible with CPFF
R&D Value Assessment Difficulty
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.1 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF - 100 GB/S RF BACKBONE PHASE 2

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $29.1 million.

What is the period of performance?

Start: 2015-09-28. End: 2019-06-14.

What is the specific technological advancement this R&D contract aimed to achieve?

The provided data indicates the contract is for 'IGF::OT::IGF - 100 GB/S RF BACKBONE PHASE 2'. While the exact technical specifications are not detailed, the title suggests a focus on developing or enhancing a high-speed radio frequency (RF) backbone for data transmission, likely for military communications or sensor networks. Phase 2 implies this is a continuation or expansion of prior research. The goal would be to achieve or improve upon 100 Gigabits per second data transfer rates within an RF spectrum, crucial for modern defense applications requiring rapid and high-volume data exchange.

How does the Cost Plus Fixed Fee (CPFF) structure impact the government's financial risk and the contractor's incentive?

The Cost Plus Fixed Fee (CPFF) contract structure involves the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee. This structure is often used for R&D or complex projects where the final costs are uncertain. For the government, the primary financial risk is that the final cost could exceed initial estimates, as the contractor is guaranteed to cover their expenses. However, the fixed fee provides the contractor with an incentive to control costs, as any savings below the estimated cost do not reduce their fee, and any overruns beyond the estimated cost do not increase their fee. This creates a balance, encouraging efficiency while acknowledging inherent project uncertainties.

What is the significance of 'Phase 2' in the contract title?

The designation 'Phase 2' in the contract title, 'IGF::OT::IGF - 100 GB/S RF BACKBONE PHASE 2', strongly suggests that this contract is a continuation or follow-on effort to a previous research and development project (Phase 1). Phase 1 likely established foundational research, proof-of-concept, or initial development of the 100 GB/s RF backbone technology. Phase 2 would then build upon those initial results, aiming to further refine the technology, scale it up, conduct more rigorous testing, or integrate it into a larger system. This phased approach is common in R&D to manage risk and allow for iterative development and learning.

What does the North American Industry Classification System (NAICS) code 541712 signify in the context of this contract?

The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)', accurately categorizes this contract. It signifies that the core activity involves scientific research and experimental development in fields like physics, chemistry, engineering, and various life sciences, excluding the specific domain of biotechnology. For this contract, it confirms the focus is on engineering and physical sciences related to developing the high-speed RF backbone, rather than biological or medical research. This classification helps in understanding the nature of the work and comparing it to other government R&D spending in similar scientific domains.

How does the contract's duration of 1355 days (approx. 3.7 years) compare to typical R&D contracts of this nature?

A contract duration of 1355 days, approximately 3.7 years, is quite typical for complex Research and Development (R&D) projects, especially those involving advanced technology development for the Department of Defense. R&D efforts often require significant time for theoretical work, experimentation, prototyping, testing, and refinement. The 'Phase 2' designation also implies a multi-year effort building on prior work. Shorter durations might be suitable for incremental improvements or testing, but developing novel capabilities like a high-speed RF backbone often necessitates a longer timeframe to achieve meaningful progress and ensure technological maturity.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1 SPACE PARK BLVD, REDONDO BEACH, CA, 90278

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: $29,230,731

Exercised Options: $29,230,731

Current Obligation: $29,113,548

Actual Outlays: $6,785

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $6,966,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline