DoD Awards Northrop Grumman $110M Contract for Defense Systems, Awarded via Full and Open Competition
Contract Overview
Contract Amount: $110,250,667 ($110.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 1999-11-10
End Date: 2007-04-15
Contract Duration: 2,713 days
Daily Burn Rate: $40.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Place of Performance
Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21409
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $110.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract awarded to a major defense contractor, indicating significant program value. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The contract spans nearly 8 years, implying a long-term need for these defense systems. 4. The 'Cost Plus Incentive Fee' structure aims to incentivize contractor performance and cost control.
Value Assessment
Rating: fair
The contract value of $110.25 million over 2713 days suggests a moderate annual spend. Benchmarking requires specific system details, but the duration and fee structure indicate a complex, potentially high-risk program where cost overruns are a possibility.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to better price discovery and potentially lower costs for the government. The use of a definitive contract implies a well-defined scope of work.
Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it promotes a competitive environment that can drive down prices and improve value for money.
Public Impact
Taxpayers benefit from competitive bidding processes that aim to secure the best value for defense spending. The long contract duration suggests sustained investment in national defense capabilities. Oversight is crucial to ensure the 'Cost Plus Incentive Fee' structure effectively manages costs and incentivizes performance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee structure can lead to cost overruns if not managed tightly.
- Long contract duration increases exposure to potential scope creep or changing requirements.
- Lack of specific product/service details makes detailed cost benchmarking difficult.
Positive Signals
- Awarded via full and open competition, indicating a competitive process.
- Contract awarded to a well-established defense contractor.
- Defined contract type (Definitive Contract) suggests a clear scope.
Sector Analysis
This contract falls within the Defense sector, specifically for the procurement of defense systems. Spending in this sector is substantial, and contracts often involve complex technologies and long development cycles. Benchmarks are highly specific to the type of defense system procured.
Small Business Impact
The data indicates the prime contractor is Northrop Grumman Systems Corporation, a large business. There is no information provided regarding small business participation or subcontracting goals within this contract.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for contract administration and oversight. The 'Cost Plus Incentive Fee' structure requires diligent monitoring to ensure contractor performance and cost control.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPIF structure.
- Long contract duration increases risk of scope creep and requirement changes.
- Lack of specific system details hinders precise value assessment.
- No explicit mention of small business subcontracting goals.
Tags
department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $110.3 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 $110.3 million.
What is the period of performance?
Start: 1999-11-10. End: 2007-04-15.
What specific defense systems were procured under this contract, and how do their costs compare to similar systems developed or acquired by other agencies or nations?
The provided data does not specify the exact defense systems. To assess value, a detailed breakdown of the system's capabilities, technological sophistication, and intended use is necessary. Benchmarking against comparable systems, considering factors like performance, lifespan, and maintenance, would reveal if the $110.25 million award represents a fair market price.
What are the key performance metrics and incentive targets within the Cost Plus Incentive Fee (CPIF) structure, and how effectively do they mitigate cost overrun risks?
The CPIF structure links contractor profit to achieving specific cost and performance targets. Effective metrics would focus on critical aspects like delivery timelines, system reliability, and achieving defined operational capabilities. Robust oversight is essential to ensure these targets are challenging yet achievable, thereby mitigating the inherent risk of cost escalation associated with CPIF contracts.
How has the performance of Northrop Grumman on similar long-term, complex defense contracts influenced the risk assessment for this $110 million award?
Northrop Grumman's track record on past contracts provides valuable insights into their project management capabilities, cost control effectiveness, and ability to meet complex technical requirements. Analyzing their historical performance, including any instances of cost overruns or schedule delays on similar programs, would inform the risk assessment for this contract, helping to gauge the likelihood of successful and cost-effective execution.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE (V)
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 895 OCEANIC DR, ANNAPOLIS, MD, 21401
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 1999-11-10
Current End Date: 2007-04-15
Potential End Date: 2007-04-15 00:00:00
Last Modified: 2024-03-07
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