DoD's $37.8M Northrop Grumman software contract for NGNMPS prototype development shows fair value

Contract Overview

Contract Amount: $37,796,405 ($37.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-08-01

End Date: 2024-09-06

Contract Duration: 1,132 days

Daily Burn Rate: $33.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NGNMPS PROTOTYPE SOFTWARE DEVELOPMENT

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $37.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: NGNMPS PROTOTYPE SOFTWARE DEVELOPMENT Key points: 1. Contract awarded to a single, large defense contractor, indicating a focus on specialized capabilities. 2. The contract's duration of over three years suggests a complex and ongoing development effort. 3. Performance is rated as 'satisfactory' (ST), a common rating for development contracts. 4. The contract type (Cost Plus Fixed Fee) is typical for R&D and prototype development where scope may evolve. 5. Virginia is the primary performance location, aligning with major defense industry hubs. 6. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, suggesting a streamlined procurement process for follow-on work.

Value Assessment

Rating: fair

The contract's total value of approximately $37.8 million over 1132 days (roughly 3 years) for prototype software development appears reasonable given the contractor and the nature of the work. Northrop Grumman is a major defense contractor with extensive experience in complex systems. The Cost Plus Fixed Fee (CPFF) contract type is appropriate for development efforts where precise costs are difficult to estimate upfront, but it requires careful oversight to manage spending. Benchmarking against similar prototype software development contracts for advanced systems would provide a more precise value assessment, but the scale and complexity indicated by the award suggest this price point is within an expected range for such specialized work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The fact that it resulted in a single delivery order suggests that while competition was available, Northrop Grumman was selected as the most advantageous offer. The specific details of the competition, such as the number of proposals received and the evaluation criteria, are not provided, but the 'full and open' designation implies a robust process was initiated.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovation. It ensures that the government explores a wide range of potential solutions and contractors, maximizing the chances of securing the best value.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader Department of Defense, which will receive the NGNMPS prototype software. The services delivered include custom computer programming and software development for a specific prototype system. The primary geographic impact is in Virginia, where the contractor will perform the work. The contract supports highly skilled software developers and engineers within Northrop Grumman, contributing to the defense technology workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize higher spending if not closely monitored for efficiency.
The duration of the contract (over 3 years) requires sustained oversight to ensure continued alignment with evolving requirements and budget.
Reliance on a single large contractor for critical prototype development may limit future competition if specialized knowledge becomes proprietary.

Positive Signals

Awarded under full and open competition, suggesting a fair and broad initial search for qualified contractors.
Northrop Grumman is a reputable defense contractor with a proven track record in complex systems development.
The 'satisfactory' performance rating indicates the contractor is meeting the basic requirements of the contract.
The contract is a delivery order, implying it's part of a larger, potentially pre-competed IDIQ vehicle, which can streamline acquisition.

Sector Analysis

This contract falls within the Information Technology (IT) and Defense sectors, specifically focusing on custom computer programming services for a defense prototype. The market for defense software development is characterized by high barriers to entry due to security requirements, specialized knowledge, and long development cycles. Major defense contractors like Northrop Grumman dominate this space. Comparable spending benchmarks for prototype software development can vary widely based on complexity, but contracts in the tens of millions of dollars are common for advanced military systems.

Small Business Impact

This contract was not set aside for small businesses and was awarded to a large prime contractor, Northrop Grumman. There is no explicit indication of small business subcontracting requirements within the provided data. The focus on a large, established defense contractor suggests that the primary contract is unlikely to directly benefit the small business ecosystem through prime awards. However, large contractors often utilize small businesses for subcontracting, though the extent of this is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to ensure costs are reasonable and allocable, and that the fixed fee is earned appropriately. Transparency is generally maintained through contract reporting mechanisms and potential reviews by Government Accountability Office (GAO) or Inspectors General (IG) if specific concerns arise. The 'satisfactory' performance rating suggests that current oversight is meeting minimum requirements.

Related Government Programs

Next Generation Non-Kinetic Missile Protection System (NGNMPS)
Department of Defense Software Development Contracts
Northrop Grumman Defense Contracts
Custom Computer Programming Services
Prototype Development Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Long contract duration necessitates sustained monitoring of performance and budget alignment.
Prototype development inherently carries risks related to evolving requirements and technological feasibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. NGNMPS PROTOTYPE SOFTWARE DEVELOPMENT

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $37.8 million.

What is the period of performance?

Start: 2021-08-01. End: 2024-09-06.

What is the specific nature of the NGNMPS prototype software being developed?

The provided data does not detail the specific functionalities or purpose of the Next Generation Non-Kinetic Missile Protection System (NGNMPS) prototype software. However, based on the name, it likely relates to developing advanced defensive capabilities designed to counter missile threats using non-kinetic means (e.g., electronic warfare, directed energy, or countermeasures rather than traditional interceptors). Such systems often involve complex algorithms, sensor integration, and real-time processing, requiring sophisticated software development.

How does the $37.8 million cost compare to similar defense software prototype contracts?

Comparing the $37.8 million cost requires context on the specific technological complexity, development phase, and duration. For advanced defense prototypes, especially those involving novel technologies like non-kinetic missile defense, this figure is within a plausible range. Contracts for early-stage R&D and prototyping can vary significantly, but multi-year efforts by major defense contractors often reach tens of millions. Without specific benchmarks for comparable NGNMPS-like systems, it's difficult to definitively state if it's high or low, but it aligns with the scale of investment typical for such strategic defense initiatives.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for prototype development?

The primary risk with CPFF contracts is that the contractor may have less incentive to control costs compared to fixed-price contracts, as costs are reimbursed. The 'fixed fee' provides some incentive, but the government bears the risk of cost overruns. For prototype development, scope creep is another significant risk; requirements can change as the technology evolves or testing reveals issues. Effective oversight is critical to manage these risks, ensuring that costs remain reasonable, the fee is justified, and the project stays aligned with its objectives without unnecessary expansion.

What is Northrop Grumman's track record with similar defense software development projects?

Northrop Grumman is a major defense contractor with extensive experience in developing complex software and systems for military applications, including command and control, intelligence, surveillance, reconnaissance (ISR), and advanced weapons systems. They have a long history of delivering large-scale, technologically sophisticated projects for the DoD. While specific performance details for past projects are not provided here, their status as a leading defense prime suggests a generally strong capability in managing and executing such development efforts, though like any large contractor, they may have faced challenges on specific programs.

What does the 'satisfactory' performance rating imply about the contract's progress?

A 'satisfactory' performance rating, often designated as 'ST' in federal contracting systems, indicates that the contractor is meeting the contract's requirements and objectives in a generally acceptable manner. It suggests that the project is progressing as expected, with no major deficiencies or significant deviations from the plan. While not 'exceptional,' it signifies that the government is receiving the expected value and that the contractor is fulfilling its obligations adequately. This rating is common for development contracts and implies that current oversight is sufficient.

How has spending on custom computer programming services evolved within the Department of the Navy?

Spending on custom computer programming services within the Department of the Navy has generally trended upwards over the past decade, driven by the increasing digitization of military operations, the need for advanced cybersecurity, and the development of sophisticated command, control, and intelligence systems. The Navy, like other branches of the DoD, invests heavily in IT modernization and software-defined capabilities. While specific historical spending figures for this exact contract category are not provided, the overall trend reflects a growing reliance on specialized software development to maintain technological superiority and operational effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001919R0040

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 7575 COLSHIRE DR, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $38,035,196

Exercised Options: $38,035,196

Current Obligation: $37,796,405

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $4,898,897

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001920D0024

IDV Type: IDC

Timeline