Northrop Grumman awarded $24.8M for advanced undersea payload development for extra-large unmanned underwater vehicles

Contract Overview

Contract Amount: $24,809,970 ($24.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2017-12-06

End Date: 2021-07-31

Contract Duration: 1,333 days

Daily Burn Rate: $18.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: HUNTER PROGRAM SEEKS TO DEVELOP AN INNOVATIVE CONCEPT FOR THE DELIVERY OF ADVANCED UNDERSEA PAYLOADS FROM EXTRA-LARGE UNMANNED UNDERWATER VEHICLES (XLUUVS). - PHASE 1 BASE

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21409

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: HUNTER PROGRAM SEEKS TO DEVELOP AN INNOVATIVE CONCEPT FOR THE DELIVERY OF ADVANCED UNDERSEA PAYLOADS FROM EXTRA-LARGE UNMANNED UNDERWATER VEHICLES (XLUUVS). - PHASE 1 BASE Key points: 1. Contract focuses on innovative concept development for undersea payloads, indicating a forward-looking R&D investment. 2. The contract was awarded on a cost-plus-fixed-fee basis, which can incentivize contractor efficiency but also carries cost overrun risks. 3. Competition was full and open, suggesting a robust market search and potential for competitive pricing. 4. The duration of the contract (1333 days) suggests a complex, multi-phase development process. 5. This award falls under R&D for physical sciences, aligning with strategic defense modernization efforts. 6. The absence of small business set-aside or subcontracting requirements may limit broader economic participation.

Value Assessment

Rating: fair

The contract value of $24.8 million for R&D in advanced undersea payloads appears reasonable given the specialized nature of the work and the contractor's expertise. Benchmarking against similar R&D contracts for complex defense systems is challenging due to unique technical requirements. The cost-plus-fixed-fee structure necessitates close monitoring to ensure value for money, as it allows for cost reimbursement plus a predetermined profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. The presence of four bidders suggests a competitive environment for this specialized R&D effort. This level of competition is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a competitive process, potentially driving down costs compared to less competitive award types.

Public Impact

The primary beneficiary is the Department of Defense, specifically its undersea warfare capabilities. The contract aims to deliver advanced undersea payloads, enhancing the operational effectiveness of extra-large unmanned underwater vehicles (XLUUVs). The geographic impact is likely concentrated around defense research facilities and the contractor's operational sites, primarily in Maryland. Workforce implications include specialized engineers and scientists in the fields of naval systems, robotics, and payload integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed diligently.
The specialized nature of the R&D may limit the number of truly competitive bidders in the future.
Lack of small business involvement could be a missed opportunity for innovation and economic inclusion.

Positive Signals

Full and open competition suggests a healthy market and potential for competitive pricing.
Awarding to a known entity like Northrop Grumman suggests confidence in their technical capabilities for this complex R&D.
Focus on innovative concepts for XLUUV payloads aligns with future defense technology roadmaps.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences related to defense applications. The market for advanced undersea technologies, particularly for unmanned systems, is a growing and strategically important area within the broader defense industry. Spending in this niche is driven by evolving geopolitical landscapes and the need for technological superiority in maritime domains. Comparable spending benchmarks are difficult to establish due to the highly specialized and often classified nature of such R&D.

Small Business Impact

This contract did not include a small business set-aside, nor are there explicit indications of significant subcontracting opportunities for small businesses. The primary contractor, Northrop Grumman, is a large defense corporation. This suggests that the direct economic benefits to the small business ecosystem may be limited for this specific award, although large prime contractors often engage small businesses in other capacities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring compliance with contract terms, monitoring performance, and verifying costs. The cost-plus-fixed-fee structure requires rigorous financial oversight to prevent unnecessary expenditures. Transparency is generally limited for defense R&D contracts due to national security considerations.

Related Government Programs

Unmanned Underwater Vehicle (UUV) Development Programs
Advanced Payload Integration Contracts
Naval Systems Research and Development
Defense Advanced Research Projects Agency (DARPA) Initiatives

Risk Flags

Cost Overrun Risk (CPFF)
Technical Feasibility Uncertainty
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. HUNTER PROGRAM SEEKS TO DEVELOP AN INNOVATIVE CONCEPT FOR THE DELIVERY OF ADVANCED UNDERSEA PAYLOADS FROM EXTRA-LARGE UNMANNED UNDERWATER VEHICLES (XLUUVS). - PHASE 1 BASE

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 $24.8 million.

What is the period of performance?

Start: 2017-12-06. End: 2021-07-31.

What is Northrop Grumman's track record with similar advanced payload development contracts for unmanned systems?

Northrop Grumman has a long history of developing complex systems for the U.S. military, including significant work in naval aviation, submarines, and autonomous systems. While specific details on 'advanced undersea payloads' for XLUUVs are often proprietary, the company has demonstrated capabilities in areas such as sensor integration, weapon systems, and communication packages for various platforms. Their experience with large, complex defense contracts suggests a capacity to manage the technical and logistical challenges associated with this HUNTER PROGRAM. Past performance reviews and contract awards in related fields would provide further insight into their specific expertise relevant to this project.

How does the $24.8 million contract value compare to similar R&D efforts in advanced undersea technologies?

Direct comparisons for highly specialized R&D like advanced undersea payloads for XLUUVs are challenging due to the unique nature of the technology and the often classified or proprietary details of such programs. However, R&D contracts for complex defense systems can range from tens to hundreds of millions of dollars, depending on the scope, duration, and technological maturity. The $24.8 million awarded to Northrop Grumman appears to be for an initial or developmental phase, focusing on concept innovation. Larger sums are typically allocated for full-scale development, testing, and production phases of such advanced systems. This value suggests a focused effort on a specific aspect of payload development.

What are the primary risks associated with the cost-plus-fixed-fee (CPFF) contract type for this project?

The primary risk with a CPFF contract is the potential for cost overruns. While the fixed fee provides the contractor with a defined profit margin, the government bears the risk of reimbursing all allowable costs. If the project encounters unforeseen technical challenges or requires more resources than initially estimated, the total cost to the government can escalate beyond initial projections. Effective oversight by the Defense Contract Management Agency (DCMA) is crucial to mitigate this risk by scrutinizing costs, ensuring efficiency, and preventing scope creep without proper adjustments. The contractor is incentivized to complete the work, but the government assumes the cost uncertainty.

How does this contract contribute to the overall effectiveness and modernization of U.S. undersea warfare capabilities?

This contract is a critical component of modernizing U.S. undersea warfare capabilities by focusing on the development of advanced payloads for Extra-Large Unmanned Underwater Vehicles (XLUUVs). XLUUVs represent a significant shift towards autonomous and persistent maritime operations, capable of extended missions without direct human control. The payloads developed under this contract will determine the specific functions these XLUUVs can perform, such as advanced intelligence, surveillance, and reconnaissance (ISR), mine countermeasures, anti-submarine warfare, or even strike capabilities. By investing in innovative payload concepts, the DoD aims to enhance the versatility, reach, and lethality of its undersea assets, providing a strategic advantage in contested maritime environments.

What has been the historical spending trend for R&D related to unmanned undersea vehicles and their payloads?

Historical spending on Unmanned Underwater Vehicles (UUVs) and their associated payloads has shown a consistent upward trend over the past two decades, driven by increasing recognition of their strategic importance and technological advancements. Early investments focused on smaller, specialized UUVs for mine detection and reconnaissance. More recently, significant funding has been directed towards larger, more capable platforms like XLUUVs, necessitating substantial R&D for sophisticated payloads. While specific figures fluctuate annually and are often embedded within broader defense budgets, the overall trajectory indicates a sustained commitment to developing and fielding advanced autonomous undersea systems. This specific contract aligns with that ongoing investment pattern.

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: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: HR001117S0022

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1580B W NURSERY RD MS B585, 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: $25,323,796

Exercised Options: $25,323,796

Current Obligation: $24,809,970

Actual Outlays: $4,576,680

Subaward Activity

Number of Subawards: 141

Total Subaward Amount: $53,232,963

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline