Northrop Grumman awarded over $22.5M for Air Dominance Engineering & Logistical Support Services

Contract Overview

Contract Amount: $22,552,461 ($22.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2012-12-15

End Date: 2017-01-28

Contract Duration: 1,505 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIR DOMINANCE ENGINEERING&LOGISTICAL SUPPORT SERVICES

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AIR DOMINANCE ENGINEERING&LOGISTICAL SUPPORT SERVICES Key points: 1. Contract value represents significant investment in critical defense engineering capabilities. 2. Competition dynamics suggest a robust market for specialized defense logistics. 3. Performance period of over 4 years indicates a long-term need for these services. 4. Contract type (Cost Plus Fixed Fee) may allow for cost overruns. 5. Geographic concentration in Maryland points to a key hub for defense operations. 6. No small business set-aside indicates focus on large prime contractors.

Value Assessment

Rating: fair

The total award of $22.55 million over a 4-year period for engineering and logistical support services appears to be within a reasonable range for specialized defense contracts of this nature. Benchmarking against similar contracts is challenging without more specific service details, but the duration and scope suggest a substantial requirement. The Cost Plus Fixed Fee (CPFF) contract type, while common in complex defense procurements, carries inherent risks of cost escalation if not managed tightly. Further analysis would be needed to compare specific labor rates and overhead allocations to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of 4 bidders (implied by 'no': 4) suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and potentially achieving better value for the government, as contractors are incentivized to offer competitive proposals to secure the award.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces. A competitive award process increases the likelihood that the government is receiving services at a fair market price, minimizing the risk of overpayment.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units requiring air dominance engineering and logistical support. Services delivered include critical engineering expertise and logistical management for air power systems. Geographic impact is concentrated around the contractor's operations in Maryland, a significant defense industry hub. Workforce implications include employment for engineers, logisticians, and support staff within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs if not managed effectively.
Lack of specific performance metrics makes it difficult to assess value for money definitively.
Concentration in a single geographic area may limit broader economic impact.
No small business participation noted, potentially missing opportunities for smaller innovative firms.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Long contract duration (over 4 years) indicates sustained need and potential for stable support.
Northrop Grumman is a major defense contractor with established expertise in this domain.
Services support critical national defense capabilities (Air Dominance).

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense applications. The aerospace and defense industry is characterized by high R&D investment, complex supply chains, and significant government procurement. Spending in this area is driven by national security priorities and technological advancements in military aviation. Comparable spending benchmarks would typically involve other large-scale engineering and logistical support contracts awarded to major defense contractors for similar platforms or capabilities.

Small Business Impact

The absence of a small business set-aside for this contract indicates that the primary award was made to a large business prime contractor. While this contract did not directly set aside funds for small businesses, large prime contractors like Northrop Grumman often engage small businesses as subcontractors. The extent of small business subcontracting would need to be reviewed to understand the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including reporting requirements and performance standards. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Air Force Weapon Systems Support
Defense Logistics Agency Operations
Aerospace Engineering Services
Naval Air Systems Command Contracts
Combat Air Patrol Support

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Limited public detail on specific performance metrics hinders value assessment.
Potential for cost overruns requires diligent government oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AIR DOMINANCE ENGINEERING&LOGISTICAL SUPPORT SERVICES

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 $22.6 million.

What is the period of performance?

Start: 2012-12-15. End: 2017-01-28.

What is Northrop Grumman's track record with similar large-scale defense engineering contracts?

Northrop Grumman has a long and extensive track record of performing large-scale defense engineering and logistical support contracts for the U.S. military. They are a major defense prime contractor involved in numerous complex programs across various branches of the armed forces, including aircraft development, missile systems, and space technology. Their history includes managing multi-billion dollar programs, demonstrating significant capacity and expertise in handling intricate technical requirements, supply chain management, and program execution. While specific performance metrics for past contracts are often proprietary or classified, their continued success in winning competitive bids for critical defense systems suggests a generally positive performance history and a strong reputation within the defense industrial base.

How does the $22.55 million award compare to other engineering services contracts within the Department of Defense?

The $22.55 million award for Air Dominance Engineering & Logistical Support Services is a substantial, but not exceptionally large, contract within the context of the Department of Defense's overall spending. The DoD procures billions of dollars in engineering and support services annually. Contracts of this magnitude are common for specialized support of major weapon systems or specific operational capabilities over a multi-year period. Larger contracts, often in the hundreds of millions or billions, typically involve full system development, sustainment of entire fleets, or major platform upgrades. This contract appears to represent a focused investment in a particular area of air power support, likely for a specific set of systems or operational functions, making it a significant but not outlier-level award.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Northrop Grumman, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable. If the project encounters unforeseen technical challenges, scope creep, or inefficiencies, the total cost to the government can increase significantly beyond initial estimates. This places the burden of cost control largely on the government's oversight and management of the contractor's expenditures. For the contractor, the risk is lower as their profit is guaranteed, provided they meet the contract's terms and conditions.

How effective is full and open competition in ensuring value for money in defense engineering contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in defense engineering contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment where contractors are incentivized to offer their best technical solutions at the most competitive prices. This process allows the government to compare multiple proposals, evaluate trade-offs between cost and performance, and select the offer that provides the greatest overall value. While it requires significant government effort in defining requirements and evaluating proposals, it typically leads to better pricing, encourages innovation, and reduces the risk of contractors exploiting a lack of competition to inflate prices. The presence of multiple bidders, as indicated here, strengthens this value proposition.

What are the historical spending patterns for air dominance engineering and logistical support?

Historical spending patterns for air dominance engineering and logistical support within the Department of Defense have consistently been substantial, reflecting the high cost and critical nature of maintaining air superiority. This spending encompasses research and development, procurement of advanced aircraft and related technologies, and ongoing sustainment, maintenance, and operational support. Budgets allocated to these areas often fluctuate based on geopolitical threats, technological advancements, and strategic defense reviews. Contracts like this one, focused on specific engineering and logistical functions, represent a segment of this broader, long-term investment. Over the past decade, spending in advanced aerospace and defense services has remained a significant portion of the defense budget, driven by the need to modernize fleets and counter evolving threats.

What is the significance of the contract being awarded to Northrop Grumman Systems Corporation?

The significance of this contract being awarded to Northrop Grumman Systems Corporation lies in their established position as a major defense contractor with deep expertise in aerospace and defense systems. Northrop Grumman is a key player in developing and supporting advanced military aircraft, including fighter jets, bombers, and surveillance platforms. Their involvement suggests the contract pertains to complex, high-technology systems where specialized engineering knowledge and robust logistical capabilities are paramount. Awarding the contract to a company of this caliber indicates the government's reliance on established industry leaders for critical national security functions, leveraging their infrastructure, technical workforce, and proven program management experience to ensure the effective operation and sustainment of air dominance capabilities.

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: N0002409R3282

Offers Received: 4

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: $27,194,285

Exercised Options: $27,194,285

Current Obligation: $22,552,461

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