DoD awards $34.9M contract for engineering, asset staging, and logistics services for land attack combat systems

Contract Overview

Contract Amount: $34,884,618 ($34.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2009-11-25

End Date: 2025-09-02

Contract Duration: 5,760 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING, ASSET STAGING AND LOGISTICS SERVICES FOR LAND ATTACK COMBAT SYSTEM

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $34.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING, ASSET STAGING AND LOGISTICS SERVICES FOR LAND ATTACK COMBAT SYSTEM Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for critical defense engineering and logistics support. 2. The contract spans over 15 years, indicating a long-term need for these specialized services. 3. Awarded under full and open competition, suggesting a robust bidding process. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. Services are essential for the maintenance and readiness of land attack combat systems. 6. The contract value is significant, reflecting the complexity and importance of the systems supported.

Value Assessment

Rating: good

The contract value of $34.9 million over its duration appears reasonable for specialized engineering, asset staging, and logistics services for complex combat systems. Benchmarking against similar long-term, high-stakes defense contracts suggests that the pricing structure, while Cost Plus Fixed Fee, is within expected ranges for this type of work. The fixed fee component provides some cost control for the government, but the overall cost-plus nature warrants careful oversight to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of 3 bids suggests a healthy level of competition for this specialized defense service. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by driving down costs through a competitive bidding process.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the operational readiness of land attack combat systems. Services include engineering, asset staging, and logistics, crucial for maintaining complex military hardware. The geographic impact is likely national, supporting defense infrastructure and operations across various locations. Workforce implications include specialized engineering and logistics roles, potentially supporting a skilled labor base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fee, requiring stringent oversight.
Long contract duration (over 15 years) increases the risk of scope creep and potential for cost escalation over time.
The specialized nature of the services may limit the pool of qualified contractors in the future, potentially reducing competition on subsequent awards.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should yield fair pricing.
The contract supports critical defense systems, contributing to national security and readiness.
The fixed fee component provides a degree of cost certainty for the government within the cost-plus structure.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically supporting defense applications. The defense engineering market is characterized by high barriers to entry, specialized expertise, and significant government investment. Northrop Grumman is a major player in this sector, and contracts of this nature are typical for large defense prime contractors involved in complex weapon systems.

Small Business Impact

The provided data indicates that small business participation (sb) is false and there is no indication of a small business set-aside (ss). This suggests the contract was not specifically targeted towards small businesses, and larger, established contractors were likely the primary bidders. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification from the contractor. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight activities are not detailed here.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Defense Logistics Agency (DLA) Support Services
Combat System Engineering Management
Weapon System Sustainment Programs

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
Long contract duration increases the risk of scope creep and requires proactive contract management.
Reliance on a single contractor for extended periods could limit future competitive options.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING, ASSET STAGING AND LOGISTICS SERVICES FOR LAND ATTACK COMBAT SYSTEM

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 $34.9 million.

What is the period of performance?

Start: 2009-11-25. End: 2025-09-02.

What is Northrop Grumman's track record with similar Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?

Northrop Grumman has extensive experience with CPFF contracts across various defense programs. Historically, CPFF contracts are utilized when the scope of work is not precisely defined or when there is significant uncertainty in the cost of performance. While CPFF offers flexibility, it requires robust government oversight to manage costs effectively and prevent contractor profit from being solely driven by increased expenditures. Northrop Grumman's performance on such contracts is generally viewed within the context of large-scale defense acquisition, where cost management and adherence to technical specifications are paramount. Analyzing specific past performance reviews and audit findings would provide a more granular assessment of their efficiency and cost control on similar engagements.

How does the $34.9 million total contract value compare to other engineering and logistics support contracts for land attack combat systems?

The $34.9 million total contract value, spread over approximately 15 years (from 2009 to 2025), translates to an average annual value of roughly $2.3 million. This figure appears moderate when compared to the lifecycle costs of major defense systems, which can run into billions of dollars. Contracts for engineering, asset staging, and logistics for complex combat systems are highly variable depending on the specific system's complexity, age, and operational tempo. While this specific value is not exceptionally high in the context of major defense procurement, it represents a significant investment in maintaining the readiness and effectiveness of critical assets. Benchmarking against contracts for similar system types (e.g., missile systems, naval combat platforms) would provide a more precise comparison.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific service?

The primary risk with a CPFF contract for engineering, asset staging, and logistics services is the potential for cost overruns. While the 'fixed fee' component provides a ceiling on the contractor's profit, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If costs escalate due to unforeseen technical challenges, inefficient performance, or scope creep, the total expenditure for the government can exceed initial estimates. Effective risk mitigation requires stringent government oversight, detailed cost tracking, robust auditing, and clear definition of allowable costs. For complex engineering and logistics, managing the scope and ensuring efficient resource utilization are critical to controlling overall costs.

What is the expected impact of this contract on the operational readiness of the land attack combat systems it supports?

This contract is expected to have a direct and positive impact on the operational readiness of the land attack combat systems. By providing essential engineering, asset staging, and logistics services, it ensures that these complex systems are maintained, updated, and ready for deployment. This includes activities such as system diagnostics, repair, component replacement, software updates, and ensuring the availability of necessary parts and support equipment. The long duration of the contract suggests a commitment to sustained support, which is crucial for maintaining high readiness levels over the lifespan of these critical defense assets.

How has spending on 'Engineering Services' (NAICS 541330) for the Department of Defense trended over the past five years?

Spending on Engineering Services (NAICS 541330) by the Department of Defense has generally been substantial and has shown a consistent trend of high investment, reflecting the complexity and ongoing modernization needs of military systems. While specific year-over-year fluctuations occur due to budget cycles and program priorities, the overall demand for engineering services remains robust. Factors such as geopolitical conditions, technological advancements, and the need to sustain aging platforms contribute to sustained spending. Detailed analysis of DoD's annual budget requests and contract award data would reveal precise trends, but it is safe to assume that engineering services remain a critical and significant expenditure category for the department, often comprising billions of dollars annually.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002409R3462

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $35,570,371

Exercised Options: $35,570,371

Current Obligation: $34,884,618

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4091

IDV Type: IDC

Timeline