Naval Sea Systems Command Awards Northrop Grumman $174.7M for Engineering Services
Contract Overview
Contract Amount: $291,440,252 ($291.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2006-01-04
End Date: 2019-11-25
Contract Duration: 5,073 days
Daily Burn Rate: $57.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: 200608!063534!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C6311 !A!N! !N! !P00001!20060104!20150930!174786913!001922749!016435559!N!NORTHROP GRUMMAN SHIP SYSTEMS !1000 ACCESS RD !PASCAGOULA !MS!39568!26512!067!36!FOREST BEACH !ONONDAGA !NEW YORK !+000000925925!N!N!000000000000!AD94!RDTE/OTHER DEFENSE-DEMO/VALID !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !3! ! !C! ! !99990909!B! ! !B! !A!N!R!2!006!B! !C!Y!Z! ! !N!C!N! ! ! !Z!D!A!A!000!A!B!N! ! ! ! !1700!N00024!0001! !
Place of Performance
Location: BETHPAGE, NASSAU County, NEW YORK, 11714
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $291.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200608!063534!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C6311 !A!N! !N! !P00001!20060104!20150930!174786913!001922749!016435559!N!NORTHROP GRUMMAN SHIP SYSTEMS !1000 ACCESS RD !PASCAGOULA !MS!39568!26512!067!36!FOREST BEACH !ONON… Key points: 1. Contract awarded to Northrop Grumman for engineering services. 2. Significant value of $174.7 million over a 10-year period. 3. Competition type is 'Full and Open', suggesting a competitive bidding process. 4. Sector is Defense, specifically Naval Systems Command. 5. The contract type is 'Cost Plus Award Fee', which can lead to cost overruns.
Value Assessment
Rating: fair
The contract value of $174.7 million for engineering services over approximately 10 years appears substantial. Benchmarking against similar large-scale defense engineering contracts would be necessary for a precise valuation, but the duration and scope suggest a significant investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition', indicating that multiple bidders were likely considered. This method generally promotes price discovery and competitive pricing, though the final negotiated price depends on the specific terms and award fee structure.
Taxpayer Impact: The substantial value of this contract means taxpayer funds are being allocated to defense engineering. The effectiveness of the competition and the final negotiated price will determine the overall value for taxpayers.
Public Impact
Impacts the defense industrial base, particularly naval shipbuilding and support. Supports jobs within Northrop Grumman and its subcontractors. Contributes to the technological advancement and maintenance of naval assets. Potential for follow-on contracts or related work within the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure can incentivize cost overruns.
- Long contract duration (10 years) may not adapt well to rapidly changing technology.
- Lack of specific details on deliverables and performance metrics.
Positive Signals
- Awarded under full and open competition.
- Significant investment in critical defense capabilities.
- Established contractor with a track record in defense.
Sector Analysis
This contract falls within the Defense sector, specifically for engineering services supporting naval systems. Spending in this area is crucial for maintaining military readiness and technological superiority. Benchmarks for similar large-scale engineering contracts within the DoD are typically in the tens to hundreds of millions of dollars.
Small Business Impact
While Northrop Grumman is a large prime contractor, the contract details do not specify subcontracting goals for small businesses. Further investigation would be needed to determine the extent of small business participation in this contract.
Oversight & Accountability
The Department of Defense, through the Naval Sea Systems Command, is responsible for oversight. The effectiveness of oversight will depend on robust contract management, performance monitoring, and adherence to the award fee criteria.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Award Fee (CPAF) contract type can lead to higher costs than fixed-price contracts.
- Long contract duration (over 10 years) may not be agile enough for evolving technological needs.
- Potential for scope creep or undefined requirements over the contract's extended period.
- Lack of explicit small business subcontracting goals mentioned in the data.
- Performance metrics and award fee criteria are not detailed, making objective assessment difficult.
Tags
engineering-services, department-of-defense, ny, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $291.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200608!063534!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C6311 !A!N! !N! !P00001!20060104!20150930!174786913!001922749!016435559!N!NORTHROP GRUMMAN SHIP SYSTEMS !1000 ACCESS RD !PASCAGOULA !MS!39568!26512!067!36!FOREST BEACH !ONONDAGA !NEW YORK !+000000925925!N!N!000000000000!AD94!RDTE/OTHER DEFENSE-DEMO/VALID !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !3! ! !C! ! !999
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 $291.4 million.
What is the period of performance?
Start: 2006-01-04. End: 2019-11-25.
What specific engineering services are being procured, and how do they align with current naval modernization priorities?
The contract specifies 'Engineering Services' under NAICS code 541330. While the data doesn't detail the specific services, they likely encompass design, development, testing, and sustainment engineering for naval platforms and systems. Alignment with modernization priorities would require examining the specific statements of work and program objectives associated with this contract.
How effectively did the 'Full and Open Competition' process ensure competitive pricing, given the Cost Plus Award Fee structure?
Full and open competition is designed to maximize bidder participation and drive competitive pricing. However, the Cost Plus Award Fee (CPAF) structure introduces complexity. While the 'cost plus' element covers expenses, the 'award fee' provides incentives for performance. The effectiveness in ensuring competitive pricing hinges on the clarity of performance metrics, the fairness of the award fee determination, and the initial baseline cost estimates.
What is the projected return on investment or strategic value derived from this $174.7 million expenditure over the contract's lifespan?
The strategic value lies in maintaining and advancing the capabilities of the U.S. Navy's fleet. Quantifying ROI is challenging for defense contracts, but success would be measured by enhanced operational readiness, technological superiority, and cost-effectiveness in system sustainment. The long-term value depends on the successful execution of engineering tasks and their contribution to mission accomplishment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 6
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 GRUMMAN RD WEST, BETHPAGE, NY, 11714
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-01-04
Current End Date: 2019-11-25
Potential End Date: 2019-11-25 00:00:00
Last Modified: 2020-10-28
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