DoD's $20.8M contract for torpedo electronics research awarded to Northrop Grumman, spanning over 7 years
Contract Overview
Contract Amount: $20,792,935 ($20.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 1998-07-31
End Date: 2005-09-30
Contract Duration: 2,618 days
Daily Burn Rate: $7.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE
Sector: Defense
Official Description: 199812!1700!3619!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002498C6107 !A!*!* !19980731!20000731!020649336!008255408!008255408!N!31442!NORTHROP GRUMMAN CORPORATION !895 OCEANIC DR !ANNAPOLIS !MD!21401!01600!003!24!ANNAPOLIS !ANNE ARUNDEL !MARYLAND !0001!+000001594844!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION !2FTL!MK48 TORPEDO (ADCAP) !3812!3!*!*!*!B!A!*!A !U!V!2!002!B!* !Z!W!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!
Place of Performance
Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21404
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $20.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 199812!1700!3619!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002498C6107 !A!*!* !19980731!20000731!020649336!008255408!008255408!N!31442!NORTHROP GRUMMAN CORPORATION !895 OCEANIC DR !ANNAPOLIS !MD!21401!01600!003!24!ANNAPOLIS !ANNE A… Key points: 1. Contract awarded for applied research in electronics and communication equipment for the MK48 torpedo. 2. Significant duration of over 7 years suggests a long-term research and development effort. 3. Awarded under full and open competition, indicating a potentially competitive bidding process. 4. Contract type is Cost Plus Incentive, which can incentivize contractor efficiency but also carries cost overrun risks. 5. The specific focus on torpedo electronics points to a specialized niche within defense R&D. 6. Northrop Grumman's extensive experience in defense contracting likely played a role in this award.
Value Assessment
Rating: fair
The contract value of $20.8 million over more than 7 years averages to approximately $2.97 million per year. This figure needs to be benchmarked against similar applied research contracts in advanced electronics for defense systems. Without specific comparable data, it's difficult to definitively assess value for money. The Cost Plus Incentive fee structure suggests that the government aimed to control costs while allowing for flexibility in research, but it also introduces the risk of costs exceeding initial estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' suggesting that multiple bidders had the opportunity to submit proposals. The presence of two bids indicates some level of competition, though the exact number of solicitations and the nature of the competition (e.g., number of proposals received) are not detailed. A competitive process is generally expected to yield better pricing and innovation.
Taxpayer Impact: A full and open competition is favorable for taxpayers as it increases the likelihood of receiving competitive pricing and innovative solutions, potentially leading to cost savings or enhanced capabilities for the defense system.
Public Impact
The primary beneficiaries are the Department of Defense, specifically naval forces, who will receive advancements in torpedo electronics. The services delivered involve applied research and development for electronics and communication equipment. The geographic impact is primarily within the United States, with the contractor located in Maryland. Workforce implications include highly skilled engineers and researchers in the defense technology sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive contracts can lead to cost overruns if not managed tightly.
- The long duration of the contract may present challenges in adapting to rapidly evolving technological landscapes.
- Reliance on a single contractor for specialized R&D could limit future competitive options if not carefully monitored.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- Northrop Grumman is a major defense contractor with a strong track record in complex systems.
- The contract focuses on applied research, indicating investment in future technological capabilities.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on Research, Development, Test, and Evaluation (RDTE) for electronics and communication equipment. The market for defense electronics is highly specialized, driven by government procurement and technological advancements. Comparable spending benchmarks would involve other RDTE contracts for advanced weapon systems or communication technologies within the Department of Defense.
Small Business Impact
There is no indication that this contract involved small business set-asides. Given the specialized nature of applied research in advanced electronics for torpedoes, it is likely that the primary contractor, Northrop Grumman, possesses the unique capabilities and scale required. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the Cost Plus Incentive fee structure, which links contractor profit to performance and cost targets. Transparency is generally maintained through contract reporting requirements, though specific details of research progress and expenditures may be sensitive.
Related Government Programs
- MK48 Torpedo Program
- Naval Sea Systems Command (NAVSEA) Contracts
- Defense Research and Development Contracts
- Electronics and Communication Equipment Procurement
- Applied Research in Weapon Systems
Risk Flags
- Cost Plus Incentive Fee contract type requires careful monitoring to prevent cost overruns.
- Long contract duration may pose risks related to technological obsolescence or changing requirements.
- Specialized nature of R&D could limit the number of truly competitive bidders.
Tags
defense, department-of-defense, naval-sea-systems-command, northrop-grumman-corporation, applied-research, electronics-communication-equipment, mk48-torpedo, cost-plus-incentive, full-and-open-competition, maryland, rdte, weapon-systems
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 199812!1700!3619!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002498C6107 !A!*!* !19980731!20000731!020649336!008255408!008255408!N!31442!NORTHROP GRUMMAN CORPORATION !895 OCEANIC DR !ANNAPOLIS !MD!21401!01600!003!24!ANNAPOLIS !ANNE ARUNDEL !MARYLAND !0001!+000001594844!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION !2FTL!MK48 TORPEDO (ADCAP) !3812!3!*!*!*!B!A!*!A !U!V!2!0
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 $20.8 million.
What is the period of performance?
Start: 1998-07-31. End: 2005-09-30.
What is Northrop Grumman's track record with similar defense electronics R&D contracts?
Northrop Grumman Corporation is a major aerospace and defense technology company with a long history of developing and producing complex systems for the U.S. military. They have extensive experience in areas relevant to this contract, including advanced electronics, communications, and weapon systems like torpedoes. Their track record includes numerous large-scale R&D and production contracts with the Department of Defense. While specific performance metrics for past contracts are not detailed here, their position as a prime contractor on significant defense programs suggests a generally reliable performance history. However, like any large contractor, they may have faced challenges or scrutiny on specific projects, which would require a deeper dive into individual contract histories.
How does the $20.8 million value compare to other applied research contracts for torpedo systems?
Benchmarking the $20.8 million value requires comparing it to similar applied research contracts specifically for torpedo systems or related advanced naval ordnance electronics. Without access to a comprehensive database of such contracts, a direct comparison is challenging. However, considering the duration of over 7 years, the annual average spending is approximately $2.97 million. This figure appears moderate for specialized R&D within the defense sector, where costs can vary widely based on technological complexity and scope. Contracts for cutting-edge research or system upgrades can range from a few million to tens or even hundreds of millions of dollars. This contract's value suggests a focused research effort rather than a full system development or upgrade.
What are the primary risks associated with a Cost Plus Incentive (CPI) contract for R&D?
Cost Plus Incentive (CPI) contracts, like the one awarded to Northrop Grumman, carry specific risks for the government. The primary risk is cost overrun; while the incentive fee structure aims to control costs by rewarding the contractor for meeting or beating targets, it doesn't guarantee it. If the research proves more complex or expensive than anticipated, costs can escalate significantly. Another risk is the potential for the contractor to focus on achieving the incentive targets rather than the optimal technical solution, or to cut corners on quality to manage costs. Effective government oversight is crucial to mitigate these risks, ensuring that the research objectives are met efficiently and that the incentive structure truly aligns contractor and government interests.
How effective is 'full and open competition' in ensuring value for money in defense R&D?
Full and open competition is generally considered the most effective method for ensuring value for money in defense R&D, as it maximizes the pool of potential bidders and fosters a competitive environment. This process encourages companies to offer their best pricing and most innovative solutions to win the contract. However, the effectiveness can be influenced by the complexity and specificity of the R&D requirement. If the requirement is highly specialized, the number of capable bidders might be limited, potentially reducing the competitive pressure. Furthermore, the evaluation criteria used by the agency play a critical role; a focus solely on price might compromise technical quality, while an overemphasis on technical merit without sufficient price consideration could lead to higher costs. For this specific contract, the fact that it was competed suggests an effort to achieve value, but the ultimate success depends on the rigor of the competition and the government's negotiation and oversight.
What are the historical spending patterns for applied research in torpedo electronics by the DoD?
Historical spending patterns for applied research in torpedo electronics by the DoD are not directly available from the provided data. However, it is understood that the Department of Defense consistently invests in R&D for its weapon systems to maintain technological superiority. Torpedo technology, particularly for platforms like the MK48, is a critical naval capability that requires ongoing research to counter evolving threats and improve performance. Spending in this area would likely fluctuate based on strategic priorities, technological advancements, and the lifecycle of existing systems. Major defense contractors like Northrop Grumman are typically awarded significant portions of this R&D funding due to their specialized expertise and established infrastructure.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE (V)
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 895 OCEANIC DR, ANNAPOLIS, MD, 03
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 1998-07-31
Current End Date: 2005-09-30
Potential End Date: 2005-09-30 00:00:00
Last Modified: 2012-01-31
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