Northrop Grumman awarded $30.2M for R&D in Florida, highlighting long-term defense investments
Contract Overview
Contract Amount: $30,220,988 ($30.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2008-05-06
End Date: 2013-06-30
Contract Duration: 1,881 days
Daily Burn Rate: $16.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 6
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RESEARCH AND DEVELOPMENT
Place of Performance
Location: APOPKA, ORANGE County, FLORIDA, 32703
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $30.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: RESEARCH AND DEVELOPMENT Key points: 1. Contract awarded via full and open competition after source exclusion, suggesting a deliberate selection process. 2. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 3. A duration of 1881 days indicates a significant, long-term research and development effort. 4. The award to Northrop Grumman, a major defense contractor, aligns with established industry players in this sector. 5. The specific NAICS code (541712) points to specialized R&D in physical, engineering, and life sciences. 6. The contract was awarded by the Defense Contract Management Agency, indicating a focus on defense-related research.
Value Assessment
Rating: fair
Benchmarking the value of this specific R&D contract is challenging without detailed project scope and deliverables. However, the $30.2 million award over approximately five years suggests a substantial investment. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility in research, carries inherent risks of cost escalation. Comparing this to similar R&D efforts within the Department of Defense would provide better context on whether the pricing reflects market rates for specialized scientific endeavors.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, specific sources were excluded, likely due to specialized requirements or existing relationships. The number of bidders (6) suggests a moderate level of competition, but the exclusion of sources may limit the full spectrum of potential bidders. This approach can sometimes lead to less aggressive pricing compared to truly open competition.
Taxpayer Impact: While competition was present, the exclusion of certain sources might have prevented taxpayers from benefiting from the most competitive bids available in the broader market.
Public Impact
The primary beneficiaries are likely the Department of Defense, which gains access to advanced research and development capabilities. The services delivered are specialized research and development in physical, engineering, and life sciences. The geographic impact is concentrated in Florida, where the contract work is presumably performed. The contract supports a highly skilled workforce in scientific and engineering fields, contributing to the technological advancement of the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize profit, requiring robust oversight.
- The exclusion of sources in the competition process raises questions about whether the most cost-effective solutions were explored.
- Long contract durations (1881 days) can sometimes lead to scope creep or outdated technologies if not managed proactively.
Positive Signals
- Awarded through a competitive process, even with source exclusions, indicates an effort to find suitable providers.
- The significant investment suggests a commitment to critical research and development for national security.
- Northrop Grumman's established presence in the defense sector implies a level of expertise and capability.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. The defense industry heavily relies on R&D to maintain technological superiority. Spending in this area is crucial for innovation in areas like aerospace, materials science, and advanced computing. Comparable spending benchmarks would typically be found within the Department of Defense's R&D budget allocations for similar scientific endeavors.
Small Business Impact
There is no indication that this contract involved small business set-asides, as the prime contractor is Northrop Grumman, a large aerospace and defense corporation. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The focus appears to be on large-scale R&D capabilities typically held by major industry players.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring compliance with contract terms and performance standards. Accountability measures are inherent in the CPFF structure, requiring detailed reporting and justification of costs. Transparency is generally maintained through contract databases, though specific project details might be sensitive for national security reasons.
Related Government Programs
- Department of Defense Research and Development Programs
- Aerospace Engineering Services
- Advanced Technology Development Contracts
- Scientific Research Services
Risk Flags
- Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
- Exclusion of sources in competition may limit price discovery.
- Long contract duration requires proactive management to prevent scope creep or obsolescence.
Tags
research-and-development, department-of-defense, northrop-grumman, cost-plus-fixed-fee, definitive-contract, full-and-open-competition-after-exclusion-of-sources, florida, scientific-research, engineering-services, defense-contract-management-agency, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. RESEARCH AND DEVELOPMENT
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 $30.2 million.
What is the period of performance?
Start: 2008-05-06. End: 2013-06-30.
What is Northrop Grumman's track record with Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?
Northrop Grumman has a long history of engaging in Cost Plus Fixed Fee (CPFF) contracts with the Department of Defense (DoD). CPFF contracts are common for research and development efforts where the scope of work can evolve. While this contract structure allows for flexibility and innovation, it also requires diligent oversight to manage costs effectively. Northrop Grumman's extensive experience in complex defense programs suggests they are well-versed in the requirements and reporting associated with CPFF agreements. However, like any large contractor, their history with CPFF contracts may include instances of cost overruns or performance challenges, necessitating careful review of specific program performance data and DoD oversight reports to fully assess their track record on such agreements.
How does the $30.2 million value compare to other R&D contracts in physical, engineering, and life sciences awarded by the DoD?
The $30.2 million award for R&D in physical, engineering, and life sciences is a significant but not exceptionally large sum within the context of the Department of Defense's overall R&D budget. The DoD invests billions annually in research and development across numerous scientific disciplines. Contracts of this magnitude are typical for specific, focused research projects or the development of advanced technologies. To provide a precise comparison, one would need to analyze a broader dataset of similar contracts awarded over a comparable period, considering factors like contract duration, specific research areas (e.g., materials science vs. software engineering), and the complexity of the deliverables. However, it represents a substantial commitment to advancing specific scientific capabilities.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?
The primary risk with a CPFF contract for R&D is the potential for cost overruns. Because the contractor is reimbursed for all allowable costs plus a fixed fee, there is less incentive to control expenses compared to fixed-price contracts. This can lead to the government paying more than initially anticipated if the project scope expands or unforeseen challenges arise. Mitigation strategies include robust government oversight, detailed cost tracking and reporting requirements, clear definition of allowable costs, and strong contract management by the procuring agency. The fixed fee itself acts as a ceiling on the profit, but the total cost can still escalate. Regular performance reviews and milestone assessments are crucial to identify and address potential cost issues early.
What does the 'after exclusion of sources' clause imply for the competition and potential value for taxpayers?
The 'after exclusion of sources' clause in a 'Full and Open Competition' award implies that while the competition was intended to be broad, certain potential bidders were deliberately excluded from the process. This exclusion is typically based on specific technical capabilities, security clearances, or other stringent requirements deemed essential for the contract. While it ensures that the selected bidders meet critical criteria, it can limit the overall pool of competition. This may mean that taxpayers do not benefit from the most aggressive pricing that might have emerged from a completely unrestricted bidding process. The rationale for exclusion must be well-documented and justified to ensure fairness and optimal value.
How does the geographic location (Florida) influence the execution and oversight of this R&D contract?
The geographic location in Florida influences the contract's execution by concentrating the R&D activities and associated workforce within that state. This can leverage existing regional expertise in aerospace, defense, or specific scientific fields prevalent in Florida. For oversight, the Defense Contract Management Agency (DCMA) would likely have a local presence or assigned personnel to monitor contractor performance, facilities, and financial reporting directly. Proximity can facilitate more direct communication and site visits, potentially improving oversight efficiency. However, it also means that any disruptions specific to the region (e.g., natural disasters) could impact contract performance.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 6
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $30,220,988
Exercised Options: $30,220,988
Current Obligation: $30,220,988
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-05-06
Current End Date: 2013-06-30
Potential End Date: 2013-06-30 00:00:00
Last Modified: 2015-10-20
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