DoD Awards Northrop Grumman $144M for Trident II Underwater Launcher Support
Contract Overview
Contract Amount: $144,235,862 ($144.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2008-10-01
End Date: 2012-04-17
Contract Duration: 1,294 days
Daily Burn Rate: $111.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: US UNDERWATER LAUNCHER SYSTEM SUPPORT, TRIDENT II (D-5)
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94086
Plain-Language Summary
Department of Defense obligated $144.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: US UNDERWATER LAUNCHER SYSTEM SUPPORT, TRIDENT II (D-5) Key points: 1. Contract awarded to a single, large defense contractor. 2. Focus on specialized engineering services for a critical weapons system. 3. Potential for cost overruns due to cost-plus contract type. 4. Limited competition raises questions about price reasonableness.
Value Assessment
Rating: questionable
The contract type (Cost Plus Incentive Fee) allows for cost overruns, and the total award value of $144M for 1294 days of support suggests a high per-unit cost. Benchmarking is difficult without specific deliverables.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for essential support services for a strategic weapons system means taxpayers may be paying a premium.
Public Impact
Ensures continued operational readiness of the Trident II (D-5) missile system. Supports critical national defense capabilities. Impacts the strategic deterrence posture of the United States.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Supports critical national defense infrastructure
- Ensures operational readiness of strategic assets
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending benchmarks for specialized weapons system support are highly variable and often driven by unique requirements and limited contractor availability.
Small Business Impact
This contract does not appear to involve small business participation, as it is a sole-source award to a large prime contractor. There is no indication of subcontracting opportunities for small businesses.
Oversight & Accountability
Oversight is crucial given the sole-source nature and cost-plus contract type. The Department of the Navy is responsible for ensuring performance and managing costs effectively to protect taxpayer interests.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type increases risk of cost overruns.
- Lack of transparency in specific service details and pricing.
- High dollar value for specialized, non-competed services.
Tags
engineering-services, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $144.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. US UNDERWATER LAUNCHER SYSTEM SUPPORT, TRIDENT II (D-5)
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 $144.2 million.
What is the period of performance?
Start: 2008-10-01. End: 2012-04-17.
What specific engineering services are included in this $144M contract, and how do they contribute to the Trident II (D-5) system's lifecycle?
The contract covers engineering services for the underwater launcher system of the Trident II (D-5) missile. This likely includes maintenance, repair, technical support, system upgrades, and performance analysis. These services are vital for ensuring the continued operational readiness and effectiveness of the submarine-based strategic deterrent.
Given the sole-source award, what mechanisms are in place to ensure Northrop Grumman is providing these services at a fair and reasonable price?
While the contract is sole-source, the Department of the Navy should employ robust cost analysis and price negotiation techniques. This includes reviewing Northrop Grumman's cost proposals, historical pricing data, and market research where possible. Incentive fee structures aim to align contractor performance with cost and schedule objectives.
How does the cost-plus incentive fee structure impact the government's ability to control costs for this long-term support contract?
Cost-plus contracts inherently shift some cost risk to the government. The incentive fee component aims to mitigate this by rewarding the contractor for meeting or exceeding targets for cost, schedule, or performance. However, effective oversight is paramount to prevent excessive spending and ensure the incentives are properly structured.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0003009Q0004
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 401 E HENDY AVE MS 33-3, SUNNYVALE, CA, 94086
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $188,796,276
Exercised Options: $151,731,909
Current Obligation: $144,235,862
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-10-01
Current End Date: 2012-04-17
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2016-08-08
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