Northrop Grumman's $21.6M R&D contract for passive infrared cueing system development, awarded by the Army

Contract Overview

Contract Amount: $21,627,604 ($21.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2008-04-16

End Date: 2013-04-15

Contract Duration: 1,825 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PASSIVE INFRARED CUEING SYSTEM (PICS) CPFF 24 MONTH EFFORT TO FURTHER DEVELOPE PICS TO DETECT, DELCARE AND CLASSIFY THREATS. MAN TECH IS 38 MONTH OPTION EXERCISED AT AWARD FOR TECHNOLOGY TO LOWER PICS FABRICATION COSTS.

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PASSIVE INFRARED CUEING SYSTEM (PICS) CPFF 24 MONTH EFFORT TO FURTHER DEVELOPE PICS TO DETECT, DELCARE AND CLASSIFY THREATS. MAN TECH IS 38 MONTH OPTION EXERCISED AT AWARD FOR TECHNOLOGY TO LOWER PICS FABRICATION COSTS. Key points: 1. Contract focuses on advancing threat detection capabilities through passive infrared technology. 2. Includes a significant 38-month option for cost-reduction technology development. 3. Awarded via full and open competition, suggesting a robust market for this technology. 4. The contract duration spans over 5 years, indicating a long-term development effort. 5. Northrop Grumman is a major defense contractor with extensive experience in similar R&D projects. 6. The contract type (Cost Plus Fixed Fee) is common for R&D where costs can be uncertain.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and focus on future technology development rather than immediate service delivery. The Cost Plus Fixed Fee (CPFF) structure means the government pays for allowable costs plus a fixed fee, which can lead to cost overruns if not managed carefully. While the contract value is substantial, its true value will be realized in the successful development and eventual deployment of the PICS technology. Comparing it to similar R&D efforts in advanced sensor technology would be necessary for a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely considered. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The government sought proposals from all responsible sources, suggesting a belief that the market could support multiple capable providers for this advanced technology.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through a competitive bidding process, potentially driving down costs and encouraging innovation.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will gain enhanced threat detection capabilities. The services delivered involve research and development to improve the Passive Infrared Cueing System (PICS). The geographic impact is primarily within the United States, supporting defense research initiatives. Workforce implications include highly skilled R&D personnel, engineers, and scientists employed by Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost uncertainty inherent in CPFF contracts requires diligent oversight to manage expenditures.
The long duration of the contract and its option period could lead to scope creep if not managed effectively.
Reliance on a single large contractor for critical R&D may limit future market competition for follow-on production.

Positive Signals

Focus on developing cost-reduction technology demonstrates a commitment to long-term affordability.
The contract's aim to improve threat detection directly supports national security objectives.
Northrop Grumman's established expertise in aerospace and defense systems suggests a high probability of successful R&D outcomes.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced sensor technology for defense applications. The market for defense R&D is characterized by significant government investment, long development cycles, and the involvement of major defense contractors. Comparable spending benchmarks would involve other advanced sensor development programs within the Department of Defense, which often involve substantial funding due to the complexity and strategic importance of the technologies.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration for this specific award (ss: false, sb: false). While Northrop Grumman, a large prime contractor, is likely to manage the bulk of the work, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized areas of research or component manufacturing. The impact on the small business ecosystem would depend on the extent to which Northrop Grumman integrates them into its supply chain for this project.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve the Department of the Army's contracting officers and technical representatives who monitor progress, costs, and adherence to contract terms. Northrop Grumman's internal quality assurance and program management processes are also key accountability measures. Transparency is facilitated through contract reporting requirements, though detailed R&D progress can be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Advanced Sensor Development Programs
Defense Research and Development
Infrared Technology Research
Threat Detection Systems
Northrop Grumman Defense Contracts

Risk Flags

Cost Overrun Risk (CPFF contract type)
Technical Feasibility Risk
Schedule Delay Risk
Long-Term Technology Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. PASSIVE INFRARED CUEING SYSTEM (PICS) CPFF 24 MONTH EFFORT TO FURTHER DEVELOPE PICS TO DETECT, DELCARE AND CLASSIFY THREATS. MAN TECH IS 38 MONTH OPTION EXERCISED AT AWARD FOR TECHNOLOGY TO LOWER PICS FABRICATION COSTS.

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 Army).

What is the total obligated amount?

The obligated amount is $21.6 million.

What is the period of performance?

Start: 2008-04-16. End: 2013-04-15.

What is the track record of Northrop Grumman in developing similar passive infrared cueing systems?

Northrop Grumman has a long and established history in developing advanced sensor systems, including those utilizing infrared technology, for various defense applications. They are a major player in aerospace and defense, with significant expertise in areas like electro-optical systems, radar, and electronic warfare. While specific details on their prior PICS development might be proprietary, their broader portfolio suggests a strong capability to undertake and successfully deliver on complex R&D projects like this one. Their experience likely includes navigating the challenges of sensor integration, signal processing, and performance optimization in demanding operational environments, which are critical for effective threat detection.

How does the pricing structure (CPFF) compare to other R&D contracts of this nature?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for research and development contracts where the scope of work and final costs are inherently uncertain. It allows the contractor to be reimbursed for allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure is often used when the government wants to encourage innovation and exploration without precisely defining every technical requirement upfront. Compared to fixed-price contracts, CPFF can offer more flexibility for the contractor to adapt to unforeseen technical challenges. However, it also places a greater burden on the government to meticulously oversee costs to prevent overruns and ensure value for money, as the contractor has less direct financial incentive to control expenses compared to fixed-price arrangements.

What are the primary risks associated with the development of the PICS technology?

The primary risks associated with the development of the Passive Infrared Cueing System (PICS) technology include technical challenges in achieving the desired detection, declaration, and classification accuracy for a wide range of threats, especially in complex environmental conditions (e.g., clutter, countermeasures). There's also the risk of cost overruns, common in R&D under CPFF contracts, if development proves more complex or time-consuming than anticipated. Schedule delays are another significant risk, potentially impacting the timely fielding of crucial defense capabilities. Furthermore, the long-term viability and obsolescence of the technology, given the rapid pace of technological advancement, represent a strategic risk. Finally, ensuring the system's reliability and maintainability in operational military settings poses an integration and sustainment risk.

What is the expected effectiveness of the PICS technology once fully developed?

The expected effectiveness of the PICS technology, once fully developed, is to significantly enhance the situational awareness and targeting capabilities of military platforms. By passively detecting infrared signatures, it aims to provide early warning of potential threats without emitting detectable signals, thus increasing survivability. The system's ability to 'detect, declare, and classify' threats implies a sophisticated level of automated analysis, reducing operator workload and improving response times. Successful development should lead to more accurate identification of targets, reduced false alarms, and improved performance in diverse operational environments, ultimately contributing to mission success and force protection.

How has federal spending on passive infrared and related sensor technologies evolved over the past decade?

Federal spending on passive infrared and related sensor technologies has generally seen consistent investment, driven by evolving national security needs and technological advancements. While specific figures for PICS alone are not readily available, broader trends in defense R&D budgets show sustained allocation towards advanced sensing, electronic warfare, and intelligence, surveillance, and reconnaissance (ISR) capabilities. Investments often fluctuate based on strategic priorities, threat assessments, and the lifecycle of existing systems. The push for multi-spectral sensing, artificial intelligence integration for data analysis, and miniaturization of components are key drivers influencing current and future spending patterns in this domain. Agencies like the Department of Defense, DARPA, and various intelligence agencies are the primary funders.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

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, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,914,501

Exercised Options: $21,627,604

Current Obligation: $21,627,604

Contract Characteristics

Cost or Pricing Data: YES

Timeline