DoD's $34M R&D contract with Northrop Grumman shows long-term engagement in advanced technologies

Contract Overview

Contract Amount: $34,152,698 ($34.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2005-03-07

End Date: 2011-06-30

Contract Duration: 2,306 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 999

Pricing Type: COST NO FEE

Sector: R&D

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $34.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract duration of over 2300 days suggests a sustained need for the research and development services. 2. The 'Cost No Fee' contract type indicates a focus on achieving specific research objectives rather than profit margins. 3. Full and open competition implies a broad search for the best technical solutions and pricing. 4. The contract's focus on R&D in physical, engineering, and life sciences points to investment in foundational technological advancements. 5. Northrop Grumman's role as a major defense contractor suggests alignment with strategic national security objectives. 6. The absence of small business set-asides may indicate a focus on highly specialized capabilities.

Value Assessment

Rating: fair

Assessing the value of this 'Cost No Fee' contract is complex as it prioritizes research outcomes over direct profit. Benchmarking against similar R&D contracts is challenging due to the unique nature of research objectives and the specialized capabilities required. The long duration suggests a significant investment, but without specific performance metrics or cost breakdowns, a definitive value-for-money assessment is difficult. The absence of a fee structure means the government bears the primary financial risk, aiming for technological breakthroughs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that the Department of Defense sought a wide range of potential offerors to ensure the best possible solution for its research needs. The number of bidders is not specified, but this procurement method typically aims to foster a competitive environment, driving innovation and potentially leading to more cost-effective outcomes by leveraging market forces. The broad competition is a positive indicator for price discovery in a specialized R&D field.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple companies to bid, which can lead to lower prices and better technological solutions. This approach ensures that public funds are used efficiently by seeking the most capable contractor at a reasonable cost.

Public Impact

The primary beneficiaries are likely the Department of Defense and the nation's defense capabilities, through advancements in physical, engineering, and life sciences. The services delivered are research and development, aimed at pushing the boundaries of scientific and technological knowledge. The geographic impact is national, focusing on enhancing U.S. technological superiority and security. Workforce implications include highly skilled scientists, engineers, and researchers employed by Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' structure places significant financial risk on the government if research objectives are not met.
The long contract duration (over 6 years) may indicate potential for scope creep or evolving research needs that could impact overall cost.
Lack of specific performance metrics or fee structure makes it difficult to assess contractor incentive for efficiency beyond achieving research goals.

Positive Signals

Awarded through full and open competition, suggesting a robust process to identify the best technical solution.
Northrop Grumman is a well-established defense contractor with a proven track record in R&D, indicating a high likelihood of technical competence.
The contract's focus on R&D aligns with strategic investments in future technological capabilities for national security.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, often involving significant investment in cutting-edge technologies. The market for such R&D is typically dominated by large, specialized aerospace and defense contractors like Northrop Grumman, who possess the necessary expertise and infrastructure. Comparable spending benchmarks in this niche are difficult to establish without knowing the specific research objectives, but R&D contracts can range widely in value.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses. Given the specialized nature of advanced R&D, it is common for prime contractors to leverage their own extensive resources or partner with other large, specialized firms. The absence of small business focus might limit opportunities for smaller innovative companies to directly participate in this specific contract, though they may contribute indirectly through the broader defense industrial base.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The 'Cost No Fee' structure implies that oversight would focus heavily on the progress and validity of research expenditures. Transparency in R&D contracts can be limited due to the proprietary and sensitive nature of the work, but reporting requirements would be defined in the contract terms. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Advanced Technology Development
Research and Development Services
Defense Science and Technology
Engineering Services
Life Sciences Research

Risk Flags

Long contract duration may indicate potential for cost overruns or scope creep.
Cost-reimbursable contract type places financial risk on the government.
Lack of specified performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.2 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 $34.2 million.

What is the period of performance?

Start: 2005-03-07. End: 2011-06-30.

What specific technological advancements or research outcomes were expected from this contract?

The provided data does not specify the exact research outcomes or technological advancements sought under this contract. The National Defense Number (ND) 541710 indicates 'Research and Development in the Physical, Engineering, and Life Sciences,' which is a broad category. Typically, such contracts aim to explore new scientific principles, develop novel materials, create advanced prototypes, or enhance existing systems through scientific inquiry. Without access to the contract's SOW (Statement of Work) or technical reports, detailing the precise expected outcomes is not possible. However, given the contractor and agency, it's reasonable to infer the research was aligned with national defense priorities.

How does the $34 million total award compare to other R&D contracts in similar fields?

Comparing the $34.15 million award to other R&D contracts requires context on the specific research area, duration, and scope. Contracts under NAICS code 541710 can vary significantly. For instance, basic research projects might be smaller, while advanced development of complex systems or platforms could easily exceed this amount. Northrop Grumman, as a major defense contractor, often engages in large-scale R&D efforts. This $34 million figure, spread over approximately six years (from March 2005 to June 2011), suggests a moderate but sustained investment in a particular R&D domain. Without more specific details on the research objectives, a precise benchmark is difficult, but it represents a substantial commitment to advancing scientific knowledge for defense purposes.

What are the key risks associated with a 'Cost No Fee' R&D contract?

The primary risk associated with a 'Cost No Fee' (CNF) contract is that the government bears all the financial risk. The contractor is reimbursed for allowable costs incurred, but receives no additional profit or fee. This structure can reduce the contractor's incentive to control costs aggressively, as their primary motivation is to achieve the research objectives, not necessarily to maximize profit. If the research proves unsuccessful or encounters unforeseen challenges, the government still pays for the incurred costs without the benefit of a successful outcome or a contractor motivated by profit to find efficient solutions. Oversight is critical to ensure costs are reasonable and allocable to the research effort.

What was Northrop Grumman's track record with the Department of Defense prior to and during this contract?

Northrop Grumman is a long-standing and major defense contractor with extensive experience working with the Department of Defense (DoD) across numerous programs and research initiatives. Prior to this specific contract (awarded in 2005), the company had a well-established history of delivering complex systems and R&D services to the DoD. During the period of this contract (2005-2011), Northrop Grumman continued to be a key player in defense acquisition. While specific performance details for this individual contract are not provided, the company's overall relationship with the DoD is characterized by significant, often multi-billion dollar, contracts for aircraft, vũ khí systems, electronics, and R&D. Their track record generally reflects a capacity to handle large, technologically advanced projects.

How does the duration of this contract (over 2300 days) impact its assessment?

The contract duration of over 2300 days (approximately 6.3 years) is significant for an R&D contract. It suggests that the research undertaken was complex, long-term, and potentially involved multiple phases or iterative development. Such extended periods are common in R&D where breakthroughs are not guaranteed and require sustained effort. From an assessment perspective, this duration implies a deep commitment of resources and a potentially evolving research landscape. It necessitates robust program management and oversight to ensure continued relevance and progress. It also means that the initial objectives might have been refined or adapted over time, making a static assessment challenging. The long duration itself doesn't inherently indicate poor value, but it underscores the need for diligent monitoring of progress and alignment with strategic goals.

What does the 'Cost No Fee' (CNF) designation imply about the nature of the research and the contractor's role?

The 'Cost No Fee' (CNF) designation implies that the contractor, Northrop Grumman, is reimbursed only for the allowable costs incurred in performing the research and development work. They do not receive any profit or fee on top of these costs. This contract type is typically used when the government wants to incentivize the contractor to achieve specific research or development objectives, often in areas where profit is not the primary driver or where the risks are high. It suggests the government is primarily interested in the successful completion of the R&D effort itself, perhaps for strategic reasons, rather than expecting the contractor to generate significant profit. The contractor's role is essentially to execute the research plan diligently, with the government bearing the financial risk.

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

Solicitation Procedures: BASIC RESEARCH

Offers Received: 999

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

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

Financial Breakdown

Contract Ceiling: $34,154,542

Exercised Options: $34,154,542

Current Obligation: $34,152,698

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline