DoD Awards Northrop Grumman $34.6M Contract for Defense Systems, Ending in 2007
Contract Overview
Contract Amount: $34,632,382 ($34.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2000-04-28
End Date: 2007-12-31
Contract Duration: 2,803 days
Daily Burn Rate: $12.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278
Plain-Language Summary
Department of Defense obligated $34.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract awarded to a major defense contractor, indicating significant program value. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The cost-plus award fee structure may incentivize performance but requires careful oversight. 4. The contract duration of over 7 years points to a long-term program requirement.
Value Assessment
Rating: fair
The contract type is Cost Plus Award Fee (CPAF), which can lead to higher costs if not managed effectively. Benchmarking against similar CPAF contracts for defense systems is necessary to assess if the final award fee was justified and if the overall cost was reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the CPAF structure means the final price is influenced by performance incentives, making direct price comparison challenging without detailed award fee data.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs. The CPAF structure, however, introduces potential for increased costs based on performance, requiring robust oversight to ensure taxpayer value.
Public Impact
This contract supports critical defense systems, impacting national security. The long contract duration suggests a sustained need for these defense capabilities. Awarding to a large, established contractor like Northrop Grumman implies a focus on proven capabilities and reliability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee contracts can be susceptible to cost overruns.
- Long contract duration increases exposure to changing technological needs and economic conditions.
- Lack of specific performance metrics makes it difficult to assess award fee justification.
Positive Signals
- Awarded under full and open competition, suggesting competitive pricing.
- Contract awarded to a reputable, experienced defense contractor.
- Definitive contract indicates a clear agreement on terms and scope.
Sector Analysis
This contract falls within the Defense sector, specifically for systems likely related to aerospace or advanced technology. Spending benchmarks in this sector are highly variable, but contracts of this magnitude often involve complex, high-value systems requiring specialized expertise.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corporation and does not specify any small business participation. Large prime contracts often involve subcontracting opportunities, but direct award to a major corporation suggests limited direct impact on small businesses for the prime role.
Oversight & Accountability
The Cost Plus Award Fee structure necessitates strong oversight from the Defense Contract Management Agency (DCMA) to ensure performance targets are met and award fees are justified. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost-plus award fee structure can lead to higher costs.
- Long contract duration (2000-2007) may not reflect current technological needs.
- Lack of specific details on performance metrics for award fee calculation.
- Potential for scope creep over the contract's extended period.
- No indication of small business subcontracting participation.
Tags
department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.
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 $34.6 million.
What is the period of performance?
Start: 2000-04-28. End: 2007-12-31.
What specific defense systems were procured under this contract, and how did their capabilities align with evolving military needs during the contract period?
The specific defense systems procured are not detailed in the provided data. Understanding the exact nature of these systems is crucial for assessing their value and relevance. Military needs evolve rapidly, and a contract spanning nearly eight years requires continuous evaluation to ensure the procured systems remained effective and aligned with strategic objectives throughout their lifecycle.
How was the 'award fee' component determined, and what were the key performance indicators (KPIs) that influenced the final amount paid to Northrop Grumman?
The determination of the award fee and the specific KPIs are not detailed in the provided data. For a Cost Plus Award Fee contract, these elements are critical for assessing contractor performance and ensuring taxpayer value. Without knowing the metrics and the evaluation process, it's impossible to judge if the awarded fees were justified or if they incentivized the most critical aspects of the contract.
Given the contract's duration and cost-plus nature, what mechanisms were in place to manage potential cost growth and ensure the government received the best possible value?
The contract utilized a Cost Plus Award Fee (CPAF) structure, which inherently carries a risk of cost growth. While full and open competition was employed initially, effective management would rely on robust oversight by the Defense Contract Management Agency (DCMA). This includes monitoring expenditures, verifying costs, and rigorously evaluating performance against defined criteria to control the 'cost' and 'award' components, thereby aiming for value.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 1 SPACE PARK BLVD, REDONDO BEACH, CA, 90278
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2000-04-28
Current End Date: 2007-12-31
Potential End Date: 2007-12-31 00:00:00
Last Modified: 2020-09-02
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