Northrop Grumman received $30.4M for advanced missile and space systems development, awarded non-competitively

Contract Overview

Contract Amount: $30,429,509 ($30.4M)

Contractor: Teledyne, Inc

Awarding Agency: Department of Defense

Start Date: 2002-10-01

End Date: 2006-05-31

Contract Duration: 1,338 days

Daily Burn Rate: $22.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: R&D

Official Description: 200306!000001!1700!AT722 !NAVAL AIR SYSTEMS COMMAND !N0001902C3116 !A!N! !N!P00001 !20020916!20050228!008391203!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!17066 GOLDENTOP ROAD !SAN DIEGO !CA!92127!59416!073!06!RANCHO BERNARDO !SAN DIEGO !CALIFORNIA!+000000679660!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !2CPK!BQM-74E SSAT !541710!E! !3! ! !A! ! !99990909!B! ! !A! !D!N!V!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.4 million to TELEDYNE, INC for work described as: 200306!000001!1700!AT722 !NAVAL AIR SYSTEMS COMMAND !N0001902C3116 !A!N! !N!P00001 !20020916!20050228!008391203!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!17066 GOLDENTOP ROAD !SAN DIEGO !CA!92127!59416!073!06!RANCHO BERNARDO !SAN D… Key points: 1. Contract awarded for advanced technology development in missile and space systems. 2. Significant funding allocated for research and development activities. 3. Contractor has a substantial presence in the aerospace and defense sector. 4. Performance period spans over three years, indicating a medium-term project. 5. The contract type suggests a focus on innovation and development rather than production. 6. Geographic location of the contractor is in California, a hub for aerospace.

Value Assessment

Rating: fair

The contract value of $30.4 million for advanced technology development in missile and space systems appears reasonable given the R&D nature of the work. However, without specific benchmarks for comparable advanced development contracts in this niche, a precise value-for-money assessment is challenging. The cost-plus incentive fee structure implies that cost control is a shared responsibility, but the final price could fluctuate. Benchmarking against similar sole-source R&D contracts would be necessary for a more definitive valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is often used for specialized research and development where a specific contractor possesses unique capabilities or intellectual property. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not have multiple offers to choose from. This could result in a higher overall expenditure for the government.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically naval air systems, through advancements in missile and space technology. The services delivered involve research and development for advanced technological solutions. The geographic impact is primarily centered around the contractor's location in San Diego, California, and its associated supply chain. Workforce implications include employment for highly skilled engineers and scientists involved in cutting-edge R&D.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits for taxpayers.
Cost-plus incentive fee contracts can lead to cost overruns if not managed carefully.
Lack of competition may reduce the incentive for the contractor to innovate aggressively on cost-efficiency.

Positive Signals

Focus on advanced technology development addresses critical defense needs.
Contractor's established expertise in missile and space systems suggests a high likelihood of successful R&D.
The incentive fee structure aims to align contractor performance with government objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced technology development for missile and space systems. The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' encompasses a broad range of scientific and technical services. Spending in this area is crucial for maintaining technological superiority in defense. Comparable spending benchmarks would typically be found within defense R&D budgets allocated to advanced weapons systems and space exploration initiatives.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'N' for small business status. There is no explicit mention of subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, though the prime contractor may engage small businesses in its broader supply chain.

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. The cost-plus incentive fee structure necessitates close monitoring of costs and performance against established milestones. Transparency is generally maintained through contract reporting requirements, though specific details of R&D progress may be sensitive.

Related Government Programs

Missile Defense Systems
Advanced Aerospace Technology
Naval Warfare Systems
Space Systems Development
Defense Research and Development

Risk Flags

Sole-source award limits price competition.
Cost-plus contracts carry inherent risk of cost overruns.
Advanced R&D projects have uncertain outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.4 million to TELEDYNE, INC. 200306!000001!1700!AT722 !NAVAL AIR SYSTEMS COMMAND !N0001902C3116 !A!N! !N!P00001 !20020916!20050228!008391203!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!17066 GOLDENTOP ROAD !SAN DIEGO !CA!92127!59416!073!06!RANCHO BERNARDO !SAN DIEGO !CALIFORNIA!+000000679660!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !2CPK!BQM-74E SSAT !541710!E! !3! ! !A! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is TELEDYNE, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $30.4 million.

What is the period of performance?

Start: 2002-10-01. End: 2006-05-31.

What is Northrop Grumman Systems Corporation's track record with similar sole-source R&D contracts for the Department of Defense?

Northrop Grumman Systems Corporation has a long history of securing sole-source contracts with the Department of Defense, particularly in areas requiring specialized expertise in advanced technologies like missile and space systems. Their track record often involves complex, high-value R&D projects where they possess unique capabilities or are the incumbent provider. While specific data on all sole-source R&D contracts is not publicly itemized, their consistent role in major defense programs suggests a generally positive performance history. However, like any large defense contractor, they have faced scrutiny on specific contracts regarding cost, schedule, and performance. A detailed review would require examining individual contract performance reports and any associated audits or investigations.

How does the $30.4 million award compare to other advanced technology development contracts in the missile and space sector?

The $30.4 million award for advanced technology development in missile and space systems is a significant but not exceptionally large sum within the context of major defense R&D. Large-scale programs can easily reach hundreds of millions or even billions of dollars. This contract's value suggests a focused development effort on a specific technology or component rather than an entire system. Comparing it directly to other contracts is challenging without knowing the exact scope and technological maturity. However, it falls within the typical range for advanced development contracts that precede full-scale engineering and production phases. The sole-source nature also means it's not directly comparable to competitively bid programs where economies of scale might drive down unit costs.

What are the primary risks associated with this cost-plus incentive fee (CPIF) contract structure for taxpayers?

The primary risks for taxpayers with a Cost-Plus Incentive Fee (CPIF) contract revolve around cost control and potential overruns. While the 'incentive fee' component aims to reward the contractor for meeting or exceeding performance targets and controlling costs, the 'cost-plus' nature means the government ultimately reimburses the contractor's allowable costs. If the contractor's costs escalate beyond initial estimates, even with incentives, the total expenditure can be higher than anticipated. There's also a risk that the contractor might prioritize achieving incentive targets over finding the absolute most cost-effective solutions if the incentive structure isn't perfectly aligned with taxpayer interests. Effective government oversight is crucial to mitigate these risks by scrutinizing costs and ensuring performance metrics are robust.

What is the historical spending pattern for missile and space systems R&D by the Naval Air Systems Command?

The Naval Air Systems Command (NAVAIR) historically allocates substantial funding towards research and development for missile and space systems, reflecting the critical role these technologies play in naval aviation and operations. While specific annual figures fluctuate based on strategic priorities and technological advancements, NAVAIR consistently invests in areas such as advanced missile guidance, propulsion, seeker technologies, and related space-based support systems. This spending is often characterized by a mix of competitively awarded contracts for mature technologies and sole-source awards for highly specialized, cutting-edge R&D where specific expertise is paramount. The overall trend indicates a sustained commitment to maintaining a technological edge in these domains.

How does the geographic concentration of this contract in California impact the broader defense industrial base?

The concentration of this contract, awarded to a company in San Diego, California, highlights the significant role the state plays in the U.S. defense industrial base, particularly in aerospace and advanced technology. California hosts a large ecosystem of defense contractors, research institutions, and skilled labor, fostering innovation and competition. While this specific contract is sole-source, the presence of major players like Northrop Grumman in the region stimulates the local economy and supports a network of subcontractors and suppliers. This geographic concentration can lead to efficiencies through proximity and established relationships but also raises concerns about potential single points of failure or over-reliance on a specific region for critical defense capabilities.

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 › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Parent Company: ATI Inc.

Address: 17066 GOLDENTOP ROAD, SAN DIEGO, CA, 92127

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