Northrop Grumman received over $12M for R&D services from the Office of Naval Research

Contract Overview

Contract Amount: $12,097,948 ($12.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2002-10-21

End Date: 2006-04-26

Contract Duration: 1,283 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200301!000081!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001402C0473 !A!N! !N! !20021021!20040425!008324949!004179453!016435559!N!NORTHROP GRUMMAN SPACE & MISSI!GARY HAWKINS !REDONDO BEACH !CA!90278!60018!037!06!REDONDO BEACH !LOS ANGELES !CALIFORNIA!+000000102000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!002!E! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200301!000081!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001402C0473 !A!N! !N! !20021021!20040425!008324949!004179453!016435559!N!NORTHROP GRUMMAN SPACE & MISSI!GARY HAWKINS !REDONDO BEACH !CA!90278!60018!037!06!REDONDO BEACH !LOS A… Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Significant duration of 1283 days suggests a complex, long-term project. 3. Contract type is Cost Plus Fixed Fee, which can carry higher risk for the government if not managed closely. 4. The contract was awarded under full and open competition after exclusion of sources, indicating a competitive process. 5. Northrop Grumman Systems Corporation is a large, established defense contractor with extensive experience. 6. The contract value of over $12 million places it in the mid-to-large tier for R&D contracts.

Value Assessment

Rating: fair

The contract value of $12,097,948.15 for a period of over 3.5 years for R&D services appears within a reasonable range for a large defense contractor like Northrop Grumman. However, the Cost Plus Fixed Fee (CPFF) pricing structure warrants careful monitoring to ensure cost efficiencies. Without specific benchmarks for this particular type of R&D, a definitive value-for-money assessment is challenging, but the scale of the award suggests a significant undertaking.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This suggests that while the competition was intended to be broad, specific sources may have been excluded for defined reasons. The number of bidders is not explicitly stated, but the 'full and open' designation implies a competitive process was initiated, which generally aids in price discovery.

Taxpayer Impact: A competitive award process, even with exclusions, is generally favorable for taxpayers as it aims to secure the best value through market forces.

Public Impact

The Office of Naval Research benefits from advanced research and development capabilities. Services delivered likely contribute to advancements in defense technology and scientific understanding. The geographic impact is centered around Northrop Grumman's Redondo Beach, CA facility, a hub for aerospace and defense work. Workforce implications include employment for highly skilled scientists, engineers, and support staff within Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without direct financial penalty, potentially leading to overspending if not rigorously managed.
The exclusion of sources, even within a full and open framework, could limit the competitive landscape and potentially impact final pricing.
The long duration of the contract may present challenges in adapting to evolving technological requirements or market conditions.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests a high level of technical capability and reliability.
The contract's focus on R&D indicates investment in future technological advancements for national security.
The competitive award process, despite exclusions, suggests an effort to obtain value.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation. The market for defense R&D is dominated by large, specialized contractors. Comparable spending benchmarks for advanced R&D projects can vary widely based on complexity and duration, but multi-million dollar awards are common for significant technological advancements.

Small Business Impact

There is no indication of small business set-asides for this contract. As a large prime contract awarded to Northrop Grumman, it is unlikely to directly benefit small businesses unless they are engaged as subcontractors. The subcontracting plan, if any, would determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms and performance standards. The Cost Plus Fixed Fee structure necessitates robust financial oversight to monitor expenditures and ensure the fixed fee remains appropriate. Transparency is generally maintained through contract reporting mechanisms, though specific project details may be sensitive.

Related Government Programs

Naval Research Programs
Defense Applied Research
Aerospace R&D
Advanced Technology Development

Risk Flags

Cost Plus Fixed Fee pricing structure requires diligent oversight to manage costs.
Potential for scope creep or evolving requirements in long-duration R&D projects.
Exclusion of sources in competition may limit full market price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200301!000081!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001402C0473 !A!N! !N! !20021021!20040425!008324949!004179453!016435559!N!NORTHROP GRUMMAN SPACE & MISSI!GARY HAWKINS !REDONDO BEACH !CA!90278!60018!037!06!REDONDO BEACH !LOS ANGELES !CALIFORNIA!+000000102000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B

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 $12.1 million.

What is the period of performance?

Start: 2002-10-21. End: 2006-04-26.

What is the specific nature of the 'Research and Development in the Physical, Engineering, and Life Sciences' being conducted under this contract?

The provided data does not specify the exact nature of the R&D. The contract falls under the 'RDTE/OTHER DEFENSE-APPLIED RESEARCH' category (NAICS 541710), which is broad. Given the contractor (Northrop Grumman) and the awarding agency (Office of Naval Research), it is highly probable that the research pertains to advanced materials, propulsion systems, sensor technology, electronic warfare, or other critical defense applications. The 'exclusion of sources' in the competition might hint at specialized capabilities required, further narrowing the potential research areas to highly technical or classified domains.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar R&D projects?

Cost Plus Fixed Fee (CPFF) contracts are common for R&D where the scope of work is not precisely defined at the outset, making it difficult to establish a firm fixed price. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. This structure shifts some cost risk to the government compared to Firm Fixed Price (FFP) contracts. For R&D, other common types include Cost Plus Incentive Fee (CPIF), which adds performance incentives, or Cost No Fee (CNF) for early-stage research. CPFF is generally considered less cost-effective for the government than FFP if the scope is well-defined, but it allows for flexibility in R&D.

What does 'full and open competition after exclusion of sources' imply about the bidding process?

This phrase indicates that the solicitation was made available to all responsible sources (full and open competition). However, specific sources were excluded from consideration. This exclusion must be justified by the agency, often due to reasons such as national security, proprietary data, or the need for highly specialized capabilities that only certain entities possess. While it aims for broad competition, the exclusions mean not every potential bidder was considered, which could potentially limit the range of proposals and pricing received compared to a purely unrestricted competition.

What is Northrop Grumman's track record with the Office of Naval Research and similar R&D contracts?

Northrop Grumman is a major defense contractor with a long history of performing complex R&D for the Department of Defense, including the Office of Naval Research (ONR). They consistently win large contracts across various defense technology areas. Their track record typically involves significant contributions to naval aviation, space systems, and advanced electronics. While specific performance metrics for this particular contract are not detailed here, Northrop Grumman's overall performance with ONR and other agencies is generally characterized by technical expertise, though like any large contractor, they may have faced scrutiny on specific projects regarding cost or schedule.

How does the $12M contract value compare to historical spending by the Office of Naval Research on R&D?

The $12.1 million award is a substantial sum, but within the typical range for significant R&D projects undertaken by the Office of Naval Research. ONR funds a wide spectrum of research, from basic science to applied technology development, with contract values ranging from thousands to hundreds of millions of dollars. This particular contract, spanning over three years, represents a mid-to-large investment in a specific R&D area. ONR's annual R&D spending is in the billions, making this contract a notable but not exceptionally large component of their overall research portfolio.

What are the potential risks associated with a CPFF contract of this magnitude and duration?

The primary risks with a CPFF contract of this size ($12M+) and duration (over 3.5 years) include cost overruns and potential inefficiencies. Since the contractor is reimbursed for costs plus a fixed fee, there is less direct financial incentive to control costs compared to fixed-price contracts. The government bears the risk of cost increases. For long-duration projects, there's also the risk that the technology or requirements may evolve, making the initial research scope less relevant or requiring costly modifications. Effective government oversight and robust Earned Value Management (EVM) are crucial to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1 SPACE PARK BLVD, REDONDO BEACH, CA, 90278

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline