DoD awards $35.2M technical assistant contract to Northrop Grumman for engineering services

Contract Overview

Contract Amount: $35,216,698 ($35.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-11-06

End Date: 2026-11-05

Contract Duration: 1,095 days

Daily Burn Rate: $32.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR - TECHNICAL ASSISTANT

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92128

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $35.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LABOR - TECHNICAL ASSISTANT Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. The cost-plus-fixed-fee structure may incentivize cost overruns. 3. Long duration of 3 years suggests a significant, ongoing need for these services. 4. The contract is for engineering services, a critical component of defense operations. 5. Geographic location in California may indicate a concentration of defense industry activity. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's value of $35.2 million over three years for technical assistance in engineering services appears to be within a reasonable range for a large defense contractor. However, without specific benchmarks for similar technical assistant roles or detailed cost breakdowns, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) pricing structure, while common in complex defense contracts, carries inherent risks of cost escalation if not meticulously managed and overseen.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices or fostered innovation through diverse proposals.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the most economical price is achieved.

Public Impact

The Department of the Navy benefits from specialized technical assistance to support its engineering and operational needs. Services delivered likely include technical expertise, analysis, and support for complex defense systems. The contract's impact is primarily within the defense sector, supporting national security objectives. Workforce implications include the employment of highly skilled engineers and technical professionals by Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize increased spending.
Long contract duration may not reflect evolving technological needs.
No small business participation noted, potentially limiting broader economic impact.

Positive Signals

Award to an established contractor like Northrop Grumman suggests access to specialized expertise.
Engineering services are critical for maintaining and advancing defense capabilities.
Contract duration provides stability for critical support functions.

Sector Analysis

The defense engineering services sector is characterized by high barriers to entry, significant R&D investment, and long-term relationships between contractors and government agencies. Major players like Northrop Grumman dominate this space due to their established infrastructure, security clearances, and proven track record. This contract fits within the broader category of professional, scientific, and technical services, which is a substantial segment of federal spending, particularly within the Department of Defense. Benchmarking this specific award against similar sole-source engineering support contracts would provide further context on its pricing and scope.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means that opportunities for small businesses to participate in this significant federal contract are limited. The absence of small business involvement in this particular award could mean that the prime contractor will handle all aspects of the work, potentially missing out on the innovation and specialized capabilities that small businesses often bring to the defense industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the contract's terms and conditions, including performance metrics and reporting requirements. Transparency is generally maintained through contract award databases, though detailed cost justifications for sole-source awards may be less publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Technical Support Services
Aerospace and Defense Contractors
Department of Defense Procurement

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus-fixed-fee structure may incentivize cost overruns.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LABOR - TECHNICAL ASSISTANT

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 $35.2 million.

What is the period of performance?

Start: 2023-11-06. End: 2026-11-05.

What is Northrop Grumman's track record with similar sole-source engineering services contracts awarded by the Department of Defense?

Northrop Grumman Systems Corporation has a long and extensive history of securing contracts, including sole-source awards, from the Department of Defense for a wide array of engineering and technical services. Their track record typically involves supporting complex defense platforms, advanced research and development, and sustainment operations. Analyzing past sole-source awards to Northrop Grumman for similar engineering support would reveal patterns in contract value, duration, and pricing structures. While specific details of past contracts require deep dives into federal procurement databases, it is generally understood that large, established defense contractors like Northrop Grumman are frequently recipients of sole-source awards due to their specialized capabilities, existing infrastructure, and critical role in national security programs. This often stems from the unique nature of the services required, the proprietary technologies involved, or the need for continuity with existing systems.

How does the $35.2 million value compare to other technical assistant contracts for engineering services within the DoD?

Comparing the $35.2 million value of this contract to other technical assistant contracts for engineering services within the DoD requires access to comprehensive historical spending data and a clear definition of 'technical assistant' and 'engineering services' across various solicitations. However, as a general benchmark, $35.2 million over three years for a sole-source award to a major defense contractor like Northrop Grumman is substantial but not extraordinary within the context of large-scale defense procurements. Many complex engineering support contracts can range from tens to hundreds of millions of dollars. The key factors influencing value include the scope of work, the level of expertise required, the duration of the contract, and the specific systems or platforms being supported. Without more granular data on comparable contracts, it's difficult to definitively state if this represents exceptional value or is on the higher end.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for engineering services are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved through a competitive bidding process. The government does not benefit from the market forces that drive efficiency and cost reduction. Secondly, the CPFF structure, while allowing for flexibility in projects with uncertain costs, carries the risk of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize them to incur higher costs if the fee represents a significant portion of the total expected price, or if oversight is insufficient. This structure requires robust government oversight to ensure costs remain reasonable and necessary for the successful completion of the contract objectives.

What is the expected impact of this contract on the specific engineering services market segment within the defense sector?

This contract is likely to reinforce the position of Northrop Grumman within the defense engineering services market, particularly in areas where they possess specialized expertise. As a sole-source award, it signifies a reliance on their unique capabilities or established relationship with the Department of the Navy. This can potentially limit opportunities for other firms, especially smaller businesses, to enter or expand their presence in this specific niche. The significant value of the contract also indicates a substantial demand for these types of engineering services, suggesting a healthy, albeit concentrated, market segment. The long-term nature of the contract implies stability for the awarded services, potentially influencing workforce planning and investment decisions for both the prime contractor and any subcontractors involved.

Are there any historical spending patterns with this contractor or agency that suggest this award is typical or anomalous?

Awarding significant engineering services contracts to major defense contractors like Northrop Grumman is a typical pattern within the Department of Defense. The DoD consistently relies on large, established firms for complex technical support and engineering solutions due to their extensive experience, security clearances, and infrastructure. Sole-source awards, while subject to scrutiny, are also not uncommon, particularly when specific expertise or continuity is paramount. Therefore, this $35.2 million contract to Northrop Grumman for engineering services appears to align with historical spending patterns. Analyzing broader historical data for the Department of the Navy's procurement of engineering services would likely show a consistent trend of awarding substantial contracts to a limited number of prime contractors, including Northrop Grumman, for critical defense programs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003921R4027

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 15120 INNOVATION DR, SAN DIEGO, CA, 92128

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: $36,262,469

Exercised Options: $36,262,469

Current Obligation: $35,216,698

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $319,332

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline