DoD's $178.6M EMW RAM contract to Northrop Grumman shows R&D focus in physical sciences

Contract Overview

Contract Amount: $17,862,534 ($17.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2020-03-16

End Date: 2024-06-30

Contract Duration: 1,567 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 999

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ELECTROMAGNETIC MANEUVER WARFARE RESOURCE ALLOCATION MANAGEMENT (EMW RAM)

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $17.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ELECTROMAGNETIC MANEUVER WARFARE RESOURCE ALLOCATION MANAGEMENT (EMW RAM) Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences, excluding nanotechnology and biotechnology. 2. Northrop Grumman Systems Corporation is the sole awardee for this definitive contract. 3. The contract duration is approximately 1567 days, indicating a long-term research initiative. 4. Awarded under full and open competition, suggesting a broad search for qualified contractors. 5. The contract type is Cost Plus Fixed Fee, common for R&D where final costs are uncertain. 6. The contract value of $178.6 million is significant for a single R&D effort. 7. The contract is managed by the Defense Contract Management Agency. 8. The North American Industry Classification System (NAICS) code 541715 points to specific R&D activities.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without detailed cost breakdowns and performance metrics. CPFF contracts inherently carry risk for the government as costs can escalate. However, the fixed fee component provides some cost certainty for contractor profit. The contract's substantial value suggests a significant scope of work, but without comparable R&D contracts in electromagnetic maneuver warfare, a precise value-for-money assessment is difficult. The absence of specific performance data makes it hard to gauge efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that the Department of Defense sought proposals from all responsible sources. This approach is generally preferred as it maximizes the pool of potential offerors and is intended to foster competitive pricing. The number of bidders is not specified, but the open competition suggests a robust process was intended to identify the best technical solution and value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive proposals, potentially leading to better pricing and innovative solutions for complex research and development needs.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advanced research and development in electromagnetic maneuver warfare. The contract supports the development of technologies and strategies crucial for national defense. The geographic impact is primarily within the United States, with potential for technology transfer to defense industrial bases. Workforce implications include highly skilled researchers, engineers, and technical staff employed by Northrop Grumman and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost escalation risk inherent in Cost Plus Fixed Fee (CPFF) contracts, especially for long-duration R&D projects.
Difficulty in precisely measuring R&D outcomes and return on investment for taxpayer funds.
Potential for scope creep in complex research projects, leading to increased costs beyond initial estimates.
Reliance on a single contractor (Northrop Grumman) for a significant R&D initiative, limiting alternative solutions.
The 'definitive contract' nature, while providing flexibility, can sometimes lead to less stringent oversight compared to other contract types if not managed carefully.

Positive Signals

Awarded through full and open competition, suggesting a thorough vetting process and potential for innovation.
Northrop Grumman is a major defense contractor with a proven track record in complex R&D.
The contract addresses a critical area of defense technology (Electromagnetic Maneuver Warfare).
The fixed fee component in the CPFF structure provides some predictability regarding contractor profit.
The long duration (1567 days) allows for in-depth research and development, potentially yielding significant technological advancements.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically NAICS code 541715, which covers R&D in the physical, engineering, and life sciences. The defense industry heavily invests in R&D to maintain technological superiority. Spending in this area is crucial for developing next-generation military capabilities. Comparable spending benchmarks are difficult to establish without specific details on the R&D scope, but significant government R&D contracts often range from tens to hundreds of millions of dollars, reflecting the high cost and complexity of innovation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale R&D effort awarded to a major defense contractor, it is unlikely that small businesses would be the primary awardees. However, Northrop Grumman may engage small businesses as subcontractors to fulfill specific aspects of the research, contributing to the small business ecosystem. Further analysis of subcontracting plans would be needed to assess the direct impact on small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'definitive contract' type, coupled with a Cost Plus Fixed Fee structure, necessitates robust oversight to monitor costs, progress, and adherence to research objectives. Transparency would be enhanced by public reporting of milestones and expenditures, though specific details of R&D progress may be classified. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Electromagnetic Spectrum Operations
Advanced Technology Development Contracts
Northrop Grumman Defense Contracts
Cost Plus Fixed Fee Contracts
National Defense Research Initiatives

Risk Flags

Cost Overrun Potential (CPFF)
R&D Outcome Uncertainty
Long Contract Duration Risks
Reliance on Single Contractor
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ELECTROMAGNETIC MANEUVER WARFARE RESOURCE ALLOCATION MANAGEMENT (EMW RAM)

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 $17.9 million.

What is the period of performance?

Start: 2020-03-16. End: 2024-06-30.

What is Northrop Grumman's track record with similar large-scale R&D contracts for the Department of Defense?

Northrop Grumman Systems Corporation is a major aerospace and defense contractor with extensive experience in research and development for the Department of Defense. They have a history of managing complex, high-value contracts across various domains, including advanced electronics, aerospace systems, and information technology. While specific details on past EMW RAM-related contracts are not provided, their portfolio typically includes significant R&D efforts. Assessing their track record would involve reviewing past performance evaluations, on-time delivery rates, and budget adherence on comparable projects. Given their size and scope, they are generally considered a capable contractor for such endeavors, though specific contract performance can vary.

How does the $178.6 million value compare to other DoD R&D contracts in physical sciences?

The $178.6 million value for this EMW RAM contract is substantial but falls within the typical range for significant R&D initiatives undertaken by the Department of Defense. DoD R&D spending spans a wide spectrum, from smaller, targeted research grants to multi-billion dollar programs. Contracts in the physical, engineering, and life sciences (NAICS 541715) can vary greatly depending on the specific research area, technological maturity, and project duration. For instance, major defense platforms or foundational research in areas like AI or quantum computing might command even larger budgets. This contract's value suggests a focused, long-term effort in a critical, albeit specialized, area of defense technology.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a CPFF contract for R&D, like the EMW RAM contract, center on cost control and the inherent uncertainty of research outcomes. For the government, the main risk is that the actual costs incurred by the contractor could significantly exceed initial estimates, even with a fixed fee. While the fixed fee provides some predictability for the contractor's profit, it doesn't cap the total contract cost. This can lead to cost overruns if the research proves more complex or time-consuming than anticipated. Conversely, contractors may face risks if they underestimate the effort required to achieve the fixed fee, potentially reducing their effective profit margin. Effective oversight is crucial to mitigate these risks.

What are the potential program effectiveness indicators for this EMW RAM contract?

Assessing the effectiveness of this EMW RAM contract hinges on defining and measuring specific research and development outcomes. Potential indicators could include the successful development and demonstration of new electromagnetic maneuver warfare capabilities, prototypes, or technologies that enhance warfighter performance. Key metrics might involve the achievement of technical performance milestones outlined in the contract, successful integration of developed technologies into existing or future systems, and the timely delivery of research reports and findings. Ultimately, effectiveness will be judged by how well the advancements contribute to the DoD's strategic objectives in electromagnetic spectrum operations and national security.

How has DoD spending in R&D for physical sciences (NAICS 541715) trended over the past five years?

DoD spending in R&D for physical sciences (NAICS 541715) has generally shown a consistent or increasing trend over the past five years, reflecting a strategic emphasis on maintaining technological superiority. While specific annual figures fluctuate based on budgetary allocations and evolving defense priorities, the overall investment in fundamental and applied research within these scientific domains remains robust. Factors driving this include the need to counter emerging threats, develop advanced materials, enhance sensor technologies, and improve electronic warfare capabilities. The EMW RAM contract aligns with this broader trend of sustained investment in critical R&D areas.

What is the significance of the contract being a 'definitive contract'?

A 'definitive contract' is a standard, fully negotiated contract that specifies all terms and conditions, including price, quantity, and delivery schedules. In the context of this R&D effort, it signifies that the agreement with Northrop Grumman has been finalized with all key parameters established upfront, unlike a basic ordering agreement or letter contract. While it provides a clear framework, the 'Cost Plus Fixed Fee' (CPFF) pricing structure within this definitive contract means that the final cost is not fixed, but rather determined by allowable costs plus a predetermined fixed fee. This structure is common for R&D where the exact scope and cost are difficult to define precisely at the outset.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001419SB001

Offers Received: 999

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 925 OYSTER BAY RD, BETHPAGE, NY, 11714

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,342,398

Exercised Options: $18,342,398

Current Obligation: $17,862,534

Actual Outlays: $2,404,516

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $31,327,795

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline