DoD's $62.9M R&D contract with Northrop Grumman shows long-term investment in physical sciences

Contract Overview

Contract Amount: $62,907,717 ($62.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2001-09-10

End Date: 2012-01-31

Contract Duration: 3,795 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $62.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract awarded for R&D in physical, engineering, and life sciences, indicating a focus on foundational scientific advancement. 2. The contract duration of nearly 10 years suggests a significant, long-term research objective. 3. Awarded under full and open competition, implying a broad search for the best technical solutions. 4. The cost-plus-fixed-fee (CPFF) structure incentivizes cost control while allowing for flexibility in research scope. 5. Northrop Grumman's extensive experience in defense and aerospace likely positions them well for this complex R&D effort. 6. The contract's value of $62.9 million over its term represents a substantial investment in scientific exploration.

Value Assessment

Rating: good

The contract's value of $62.9 million over almost 10 years averages to approximately $6.3 million per year. This is a significant but not excessive amount for large-scale R&D projects, especially those involving complex engineering and physical sciences. Benchmarking against similar long-term R&D contracts within the Department of Defense would provide further context, but the duration and scope suggest a fair valuation for the potential technological advancements sought.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of Defense sought proposals from all responsible sources. With 5 bidders, this suggests a competitive environment where multiple companies vied for the opportunity. This level of competition is generally favorable for price discovery and ensures that the government receives proposals based on technical merit and value.

Taxpayer Impact: Full and open competition benefits taxpayers by driving down costs through a competitive bidding process and ensuring that the most innovative and cost-effective solutions are considered.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the broader scientific community through the dissemination of research findings. The contract supports advanced research and development in physical, engineering, and life sciences, contributing to technological innovation. The contract was awarded to Northrop Grumman Systems Corporation, a major aerospace and defense contractor. The geographic impact is primarily associated with Northrop Grumman's facilities, with specific locations in Florida noted. This contract likely supports a highly skilled workforce of scientists, engineers, and researchers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 10 years) can sometimes lead to scope creep or evolving requirements that may impact final costs.
Cost-plus-fixed-fee contracts, while allowing flexibility, require diligent oversight to ensure cost efficiency and prevent unnecessary expenditures.
The specific nature of R&D means outcomes are not guaranteed, representing an inherent risk in the investment.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
Northrop Grumman is a well-established contractor with a proven track record in complex R&D and defense programs.
The contract's focus on R&D in physical, engineering, and life sciences aligns with strategic national security and technological advancement goals.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, driving advancements in materials, sensors, propulsion, and other technologies. The market for defense R&D is characterized by long-term investments, high technical barriers to entry, and significant government funding. Comparable spending benchmarks would involve looking at other large, multi-year R&D contracts awarded by the DoD to major defense contractors.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of small business subcontracting goals. This suggests that the primary awardee, Northrop Grumman, is expected to fulfill the contract requirements directly or through its established supply chain, which may or may not include significant small business participation. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the awarding agency (Department of Defense) and its contracting officer's representative (COR). The Defense Contract Management Agency (DCMA) is listed as the servicing agency, indicating their role in contract administration and oversight. Given the CPFF structure and long duration, regular performance reviews, financial audits, and milestone tracking are crucial accountability measures. Transparency would be facilitated through contract reporting mechanisms, though specific details of R&D progress may be sensitive.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Aerospace and Defense Contractor Support
Physical Sciences Research Initiatives
Engineering and Life Sciences Innovation

Risk Flags

Long contract duration may increase risk of scope creep or requirement changes.
CPFF contract type requires diligent oversight to ensure cost control.
R&D outcomes are inherently uncertain, posing a risk to investment realization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.9 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 $62.9 million.

What is the period of performance?

Start: 2001-09-10. End: 2012-01-31.

What specific areas within physical, engineering, and life sciences does this contract focus on?

The provided data categorizes the contract under NAICS code 541710, which covers 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology and Nanotechnology). While the broad category is defined, the specific sub-focus areas within this contract are not detailed in the provided summary. Typically, such contracts could encompass a wide range of disciplines including advanced materials, propulsion systems, sensor technology, cybernetics, artificial intelligence research related to physical systems, and complex simulations. Further details would likely be found in the contract's statement of work (SOW) or technical exhibits, which are not included here. The long duration suggests a foundational or exploratory research objective rather than a specific product development.

How does the $62.9 million value compare to similar long-term R&D contracts in the defense sector?

The $62.9 million value over a nearly 10-year period (3795 days) equates to an average annual spend of approximately $6.3 million. This figure is substantial but falls within the range of significant, long-term R&D investments made by the Department of Defense. Major defense contractors frequently engage in R&D programs of this magnitude, particularly for foundational research or the development of next-generation technologies. For instance, contracts for developing new aircraft systems, advanced missile technologies, or sophisticated electronic warfare capabilities can easily reach hundreds of millions or even billions of dollars over their lifecycles. This specific contract's value appears reasonable for a dedicated, multi-year R&D effort in complex scientific domains, assuming the scope aligns with industry norms for such endeavors.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

Cost Plus Fixed Fee (CPFF) contracts present unique risks, particularly in R&D settings. For the government, the primary risk is that the contractor may not be sufficiently incentivized to control costs, as their profit (the fixed fee) is predetermined. This can lead to cost overruns if not managed diligently. Contractors, on the other hand, bear the risk of underestimating the effort required to achieve the fixed fee, potentially leading to reduced profit margins if costs exceed expectations. In R&D, where the path to success is often uncertain, this can be a significant concern. Effective oversight, detailed milestone tracking, and robust cost accounting are essential to mitigate these risks and ensure value for the taxpayer.

What is the significance of awarding this contract to Northrop Grumman Systems Corporation?

Awarding this significant R&D contract to Northrop Grumman Systems Corporation is significant due to the company's established position as a major defense contractor with extensive expertise in aerospace, defense, and advanced technologies. Their track record suggests they possess the technical capabilities, infrastructure, and personnel necessary to undertake complex research and development projects. This award indicates the Department of Defense's confidence in Northrop Grumman's ability to deliver on challenging scientific and engineering objectives. It also reflects the trend of large, integrated defense companies playing a crucial role in developing cutting-edge technologies essential for national security.

How does the 'full and open competition' aspect influence the outcome for taxpayers?

The 'full and open competition' designation is highly beneficial for taxpayers. It means that the Department of Defense actively sought proposals from all responsible sources, fostering a competitive environment. This process typically drives innovation and encourages bidders to offer their best technical solutions at the most competitive prices to win the contract. When multiple capable companies submit proposals, the government has a stronger basis for negotiation and selection, increasing the likelihood of securing optimal value for the funds expended. This contrasts with sole-source or limited competition scenarios, where the potential for higher pricing or less innovation is greater.

What does the contract duration of nearly 10 years imply about the nature of the R&D?

A contract duration of nearly 10 years (3795 days) strongly implies that the research and development effort is foundational, exploratory, or aimed at achieving a long-term strategic technological objective. Such extended timelines are characteristic of projects that require significant scientific discovery, iterative development, complex system integration, or the maturation of technologies that are not yet fully understood or realizable. It suggests that the program is not focused on immediate product delivery but rather on building knowledge, capabilities, or developing technologies that may have applications far into the future. This long-term perspective is common in areas like advanced materials science, fundamental physics research, or the development of entirely new defense paradigms.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 2000 W NASA BLVD, MELBOURNE, FL, 32902

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