DoD's $84M LRIP Contract with Northrop Grumman: R&D Spending in Physical Sciences
Contract Overview
Contract Amount: $84,273,840 ($84.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2010-09-28
End Date: 2016-06-30
Contract Duration: 2,102 days
Daily Burn Rate: $40.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: R&D
Official Description: LOW RATE INITIAL PRODUCTION (LRIP) PHASE
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $84.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LOW RATE INITIAL PRODUCTION (LRIP) PHASE Key points: 1. Contract awarded for Research and Development in Physical, Engineering, and Life Sciences. 2. Significant value of $84.27 million for a Low Rate Initial Production phase. 3. No competition was utilized for this definitive contract award. 4. The contract spans over 2102 days, indicating a long-term development effort.
Value Assessment
Rating: questionable
The contract value of $84.27 million for LRIP is substantial. Without comparable LRIP contracts in this specific R&D niche, a precise pricing assessment is difficult. The firm fixed price structure aims to control costs, but the lack of competition raises concerns about potential overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price discovery and potentially reduces the incentive for the contractor to offer the most competitive pricing. The rationale for not competing is not provided.
Taxpayer Impact: The lack of competition in a contract of this magnitude raises concerns about taxpayer value. Without competitive bidding, there's a risk that funds could be spent less efficiently than if multiple vendors had vied for the contract.
Public Impact
Taxpayers may not be receiving the best value due to the absence of competitive bidding. The long duration of the contract suggests a significant investment in developing new technologies. The specific R&D area could lead to advancements with broad applications, but the cost-effectiveness is unclear.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns in R&D
- Limited transparency on pricing justification
Positive Signals
- Firm fixed price contract type
- Focus on critical R&D
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Spending in this sector is crucial for innovation but can be highly variable and difficult to benchmark due to its specialized nature and long development cycles.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, limiting opportunities for them.
Oversight & Accountability
The contract was awarded by the Department of Defense through the Defense Contract Management Agency. Oversight would focus on ensuring the R&D progresses as planned and within the firm fixed price, though the lack of competition complicates cost oversight.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competitive pressure on pricing.
- High contract value for R&D phase raises cost concerns.
- Limited transparency on pricing justification.
- Potential for scope creep in long-term R&D projects.
- No indication of small business participation.
Tags
research-and-development-in-the-physical, department-of-defense, fl, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $84.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LOW RATE INITIAL PRODUCTION (LRIP) PHASE
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 $84.3 million.
What is the period of performance?
Start: 2010-09-28. End: 2016-06-30.
What was the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically involves unique capabilities, critical national security needs, or the absence of viable alternatives. Without further documentation, it's impossible to detail the specific rationale. To ensure fair and reasonable pricing, the agency likely relied on historical data, independent cost estimates, or price analysis techniques, but the effectiveness of these measures is harder to gauge without competition.
How does the $84.27 million LRIP cost compare to industry benchmarks for similar R&D projects, considering the specific technologies involved?
Benchmarking R&D contracts, especially for LRIP phases, is challenging due to the proprietary nature of technologies and the unique development paths. Without knowing the specific 'Physical, Engineering, and Life Sciences' domain and the technological maturity, a direct comparison is difficult. However, $84 million for LRIP suggests a significant investment, and the lack of competition means a direct cost-efficiency comparison against alternatives is not readily available.
What are the expected long-term benefits and potential return on investment for the taxpayer from this R&D expenditure, given the sole-source nature of the contract?
The long-term benefits are tied to the successful development of the technologies funded by this R&D contract. These could range from enhanced defense capabilities to advancements with commercial applications. However, the sole-source award introduces uncertainty regarding the optimal use of taxpayer funds. The return on investment is contingent on the successful transition of the R&D into usable products or capabilities, and the lack of competition may have inflated the initial investment.
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 › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6133110R0010
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $84,384,403
Exercised Options: $84,384,403
Current Obligation: $84,273,840
Subaward Activity
Number of Subawards: 36
Total Subaward Amount: $79,373,748
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-09-28
Current End Date: 2016-06-30
Potential End Date: 2016-06-30 00:00:00
Last Modified: 2023-06-14
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