Department of Defense awards $10.9M engineering services contract to Northrop Grumman Systems Corporation
Contract Overview
Contract Amount: $10,948,604 ($10.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-12-12
End Date: 2019-12-11
Contract Duration: 364 days
Daily Burn Rate: $30.1K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF
Place of Performance
Location: POINT MUGU NAWC, VENTURA County, CALIFORNIA, 93042
Plain-Language Summary
Department of Defense obligated $10.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Duration of 364 days suggests a focused scope of work. 3. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. Northrop Grumman is a large, established defense contractor. 5. The contract falls under Engineering Services, a broad category. 6. Awarded by the Department of the Navy, indicating a specific military need.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without more detailed service descriptions and comparable contract data. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D or uncertain scope work, carries inherent risks of cost escalation compared to fixed-price contracts. Without specific performance metrics or a clear comparison to similar engineering services procured by the Navy or other DoD branches, it's difficult to definitively assess value for money. The lack of competition further complicates a robust value assessment.
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. This typically occurs when only one responsible source can provide the required services, or in cases of urgent need. The lack of competition means that the Navy did not benefit from the price discovery and potential cost savings that a competitive bidding process could have provided. This approach limits the government's ability to negotiate the best possible price.
Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available, as the government did not leverage multiple bids to drive down costs.
Public Impact
The primary beneficiaries are the Department of the Navy, receiving specialized engineering services. The services delivered are engineering support, likely related to naval systems or platforms. The contract is associated with California, indicating a potential geographic impact for workforce or facilities. Workforce implications include employment for engineers and technical staff at Northrop Grumman.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential taxpayer savings.
- Cost Plus Fixed Fee contract type introduces risk of cost overruns.
- Limited public information on specific deliverables makes performance assessment difficult.
- Lack of competition hinders transparency in pricing and service justification.
Positive Signals
- Award to a large, experienced defense contractor like Northrop Grumman suggests a focus on capability and reliability.
- Engineering services are critical for maintaining and advancing defense capabilities.
- The contract duration indicates a defined period of support, allowing for planning.
Sector Analysis
Engineering services represent a significant segment of the federal contracting market, particularly within the defense sector. Companies like Northrop Grumman are key players in providing specialized technical expertise for complex defense systems. This contract likely fits within the broader category of defense engineering support, which can encompass design, development, testing, and sustainment of military platforms and technologies. Benchmarking against similar engineering service contracts within the DoD would provide further context on pricing and scope.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss: false' and 'sb: false'. The prime contractor, Northrop Grumman, is a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Northrop Grumman voluntarily engages small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Inspector General for the Department of Defense may also have jurisdiction for audits and investigations. Transparency is limited due to the sole-source nature and lack of detailed public reporting on specific performance metrics or cost breakdowns. Accountability would be managed through contract clauses and performance reviews by the Navy.
Related Government Programs
- Defense Engineering Services
- Naval Systems Support
- Aerospace and Defense Contracting
- Cost Plus Fixed Fee Contracts
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Limited public information on specific services
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, northrop-grumman, sole-source, cost-plus-fixed-fee, california, delivery-order, large-contractor
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF
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 $10.9 million.
What is the period of performance?
Start: 2018-12-12. End: 2019-12-11.
What specific engineering services were provided under this contract?
The provided data indicates the contract was for 'Engineering Services' (NAICS 541330) awarded to Northrop Grumman Systems Corporation by the Department of the Navy. However, the specific nature of these services is not detailed in the provided data. Engineering services in the defense sector can range widely, including but not limited to systems engineering, design, analysis, testing, integration, and technical support for naval platforms, weapons systems, or related infrastructure. Without further documentation, such as the Statement of Work (SOW) or contract modifications, the precise deliverables remain unspecified.
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and value?
Cost Plus Fixed Fee (CPFF) contracts are characterized by the government reimbursing the contractor for allowable costs plus a fixed fee representing profit. This contract type is often used when the scope of work is not well-defined or involves research and development, where precise cost estimation is difficult. While it allows flexibility and encourages innovation, it carries a higher risk of cost overruns for the government compared to fixed-price contracts, as the contractor is incentivized to incur costs to complete the work, and the profit margin is fixed regardless of the final cost. Value for money can be harder to ascertain with CPFF due to the cost-reimbursement nature, making robust oversight crucial.
What are the implications of awarding this contract on a sole-source basis?
A sole-source award means the contract was not competed among multiple potential bidders. This typically happens when only one vendor possesses the unique capability or technology required, or in urgent situations. The primary implication for taxpayers is the potential for higher costs, as the government does not benefit from the competitive pressure that drives down prices. It also reduces transparency in the procurement process and limits the government's leverage in negotiating terms and pricing. While sometimes necessary, sole-source awards warrant careful justification and oversight to ensure fair pricing and necessity.
What is Northrop Grumman Systems Corporation's track record with the Department of Defense?
Northrop Grumman Systems Corporation is a major defense contractor with an extensive history of working with the Department of Defense (DoD) across various branches and agencies. They are involved in developing and producing a wide range of defense systems, including aircraft, spacecraft, electronics, and cybersecurity solutions. Their track record with the DoD is substantial, encompassing numerous large-scale contracts for complex military programs. While specific performance details for every contract are not publicly available, their continued role as a prime contractor indicates a generally accepted capability and reliability in meeting DoD requirements.
How does this contract's value compare to similar engineering services contracts?
Directly comparing the $10.9 million value of this specific contract to similar engineering services contracts is difficult without more granular data on the scope of work, duration, and specific services rendered. The Department of Defense procures a vast array of engineering services, varying significantly in complexity and cost. Factors such as the specific naval systems involved, the level of expertise required, and the geographic location can influence pricing. A comprehensive benchmark would require analyzing contracts with similar NAICS codes (541330), similar agencies (e.g., other DoD branches), and comparable contract types (CPFF) and durations. However, $10.9 million for a year-long engineering support contract to a major defense firm is within a plausible range for specialized defense work.
What are the potential risks associated with this contract?
The primary risks associated with this contract stem from its sole-source nature and the Cost Plus Fixed Fee (CPFF) structure. The sole-source award means there was no competitive bidding, potentially leading to suboptimal pricing and reduced incentive for the contractor to be cost-efficient. The CPFF structure, while offering flexibility, increases the risk of cost overruns, as the contractor is reimbursed for costs incurred plus a fixed fee. Without detailed performance metrics and robust oversight, there's a risk that the project may exceed its estimated budget without a commensurate increase in value or effectiveness. Additionally, the lack of specific public detail on the services limits the ability to assess performance risks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6893616R0069
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 925 OYSTER BAY RD, BETHPAGE, NY, 11714
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $10,948,604
Exercised Options: $10,948,604
Current Obligation: $10,948,604
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6893619D0007
IDV Type: IDC
Timeline
Start Date: 2018-12-12
Current End Date: 2019-12-11
Potential End Date: 2019-12-11 00:00:00
Last Modified: 2025-09-09
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