DoD's $13.8M AI contract to Northrop Grumman for R&D in physical sciences, awarded via full and open competition
Contract Overview
Contract Amount: $13,852,711 ($13.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-02-07
End Date: 2028-02-06
Contract Duration: 1,460 days
Daily Burn Rate: $9.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 20
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: ARTIFICIAL INTELLIGENCE REINFORCEMENTS (AIR)
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $13.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ARTIFICIAL INTELLIGENCE REINFORCEMENTS (AIR) Key points: 1. Contract focuses on advanced research and development in physical sciences, aligning with DARPA's mission. 2. Awarded to a major defense contractor, suggesting a focus on complex, high-stakes technological advancement. 3. The contract duration of 1460 days indicates a long-term commitment to the research objectives. 4. Cost Plus Fixed Fee pricing structure allows for flexibility in research while managing contractor profit. 5. The contract is not set aside for small businesses, indicating a focus on large-scale capabilities. 6. Geographic location in Maryland suggests proximity to key defense research hubs.
Value Assessment
Rating: good
Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and the lack of directly comparable public data. However, the $13.8 million award over approximately four years for advanced AI research by DARPA appears reasonable given the complexity and potential impact of such work. The Cost Plus Fixed Fee (CPFF) structure is common for R&D where exact costs are difficult to predict, but it necessitates careful oversight to ensure efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit proposals. The presence of 20 proposals suggests a robust competitive environment for this research area. A high number of bidders generally benefits the government by fostering price discovery and encouraging innovative solutions, potentially leading to better value.
Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used to secure the best possible research outcomes and technological advancements by allowing a wide range of qualified contractors to compete.
Public Impact
The primary beneficiaries are the Department of Defense and the nation through advancements in artificial intelligence for defense applications. The contract will deliver research and development services in the physical, engineering, and life sciences, focusing on AI. The geographic impact is primarily within Maryland, a hub for defense research and development. Workforce implications include highly skilled researchers, engineers, and scientists employed by Northrop Grumman and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require diligent oversight to prevent cost overruns and ensure efficient resource utilization.
- The specialized nature of AI R&D can make performance metrics difficult to define and measure objectively.
- Reliance on a single large contractor for critical AI research may raise concerns about long-term dependency and innovation diversity.
Positive Signals
- Awarded through full and open competition, indicating a broad search for the best technical solutions.
- Northrop Grumman is a well-established defense contractor with a track record in advanced technology development.
- The contract's focus on AI aligns with national security priorities, suggesting strategic importance.
- A significant number of proposals (20) indicates strong market interest and potential for innovation.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on Artificial Intelligence (AI) applications in physical sciences. The market for defense-related AI R&D is substantial and growing, driven by the need for technological superiority. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of AI research, but significant government investment is directed towards AI capabilities across various agencies, including DARPA.
Small Business Impact
This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses in the provided data. The focus on advanced R&D by a large prime contractor suggests that the primary work will likely be performed by the contractor's internal specialized teams. This may limit direct opportunities for small businesses unless they are specifically sought out as subcontractors for niche expertise.
Oversight & Accountability
Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Defense Advanced Research Projects Agency (DARPA) contracting officers and technical representatives. Accountability measures will be tied to the achievement of research milestones and deliverables outlined in the contract. Transparency is generally limited for specific R&D projects due to national security and proprietary concerns, but contract award details are publicly available.
Related Government Programs
- Artificial Intelligence Research
- Defense Advanced Research Projects Agency (DARPA) Contracts
- Northrop Grumman Defense Contracts
- Research and Development in Physical Sciences
- Cost Plus Fixed Fee Contracts
Risk Flags
- R&D Uncertainty
- Cost Control Oversight Needed (CPFF)
- Technical Feasibility Risk
Tags
research-and-development, artificial-intelligence, department-of-defense, darpa, northrop-grumman-systems-corporation, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, maryland, large-business, fy2024
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ARTIFICIAL INTELLIGENCE REINFORCEMENTS (AIR)
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 Advanced Research Projects Agency).
What is the total obligated amount?
The obligated amount is $13.9 million.
What is the period of performance?
Start: 2024-02-07. End: 2028-02-06.
What is Northrop Grumman's track record with similar AI R&D contracts from DARPA?
Northrop Grumman has a significant history of engaging with DARPA on advanced research and development projects, including those involving artificial intelligence and complex systems. While specific details on past AI R&D contracts with DARPA are often proprietary or classified, the company's extensive experience in aerospace, defense, and technology suggests a strong capability to undertake such work. Their portfolio includes contributions to autonomous systems, advanced computing, and data analytics, all relevant to AI research. DARPA typically selects contractors with proven expertise and a history of successful innovation, making Northrop Grumman a logical choice for complex AI initiatives.
How does the $13.8 million value compare to other AI R&D contracts awarded by DARPA?
The $13.8 million value for this four-year AI R&D contract appears to be within a moderate range for DARPA projects. DARPA funding can vary significantly, with some foundational research efforts costing a few million dollars and larger, more ambitious programs potentially reaching tens or even hundreds of millions over their lifecycle. Contracts for specific technological advancements, especially in rapidly evolving fields like AI, often fall into this multi-million dollar bracket. The value reflects the specialized expertise, personnel, and resources required for cutting-edge research, and it is not unusually high or low when considered against the typical scope of DARPA's targeted R&D initiatives.
What are the primary risks associated with this specific contract?
Key risks for this contract include the inherent uncertainty in R&D, where breakthroughs are not guaranteed, potentially leading to unmet objectives. The Cost Plus Fixed Fee (CPFF) structure, while flexible, carries a risk of cost escalation if not managed diligently, requiring robust government oversight. Technical risks are also present, as developing novel AI capabilities can encounter unforeseen scientific or engineering challenges. Furthermore, reliance on a single large contractor, even with competition, could pose risks related to knowledge transfer and long-term strategic alignment if the technology becomes critical.
How effective is the Cost Plus Fixed Fee (CPFF) structure for managing AI R&D projects?
The CPFF structure is often employed for R&D contracts where the scope of work is not precisely defined at the outset, allowing for flexibility as research progresses. It provides the contractor with assurance of cost recovery plus a fixed fee, incentivizing them to perform the work. However, its effectiveness hinges on strong government oversight to monitor costs, ensure efficiency, and prevent scope creep. For AI R&D, where innovation is paramount, CPFF can be effective in encouraging exploration. The government's role is crucial in setting clear performance goals and actively managing the contractor's expenditures to ensure value for money.
What are the historical spending patterns for AI R&D within the Department of Defense?
The Department of Defense (DoD) has consistently increased its investment in Artificial Intelligence (AI) R&D over the past decade, recognizing its critical importance for future military capabilities. Spending spans across various agencies, including DARPA, the military services, and defense research laboratories. Historical patterns show a shift from basic research towards more applied AI, including areas like machine learning, computer vision, autonomous systems, and data analysis. Budgets have grown substantially, reflecting a strategic priority to maintain technological superiority. This $13.8 million contract aligns with this broader trend of significant and growing DoD investment in AI.
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 › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HR001123S0009
Offers Received: 20
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580A W NURSERY RD, 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: $28,871,785
Exercised Options: $17,191,963
Current Obligation: $13,852,711
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-02-07
Current End Date: 2028-02-06
Potential End Date: 2028-02-06 00:00:00
Last Modified: 2025-09-09
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