DoD's $12.5M contract for air defense sustainment services awarded to Northrop Grumman
Contract Overview
Contract Amount: $12,506,798 ($12.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-03-07
End Date: 2027-01-07
Contract Duration: 671 days
Daily Burn Rate: $18.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: SUSTAINMENT SERVICES REQUIRED TO MAINTAIN THE CURRENT OPERATIONAL STATUS OF THE FORWARD AREA AIR DEFENSE SYSTEM.
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $12.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SUSTAINMENT SERVICES REQUIRED TO MAINTAIN THE CURRENT OPERATIONAL STATUS OF THE FORWARD AREA AIR DEFENSE SYSTEM. Key points: 1. Contract focuses on maintaining the operational status of a critical air defense system. 2. Awarded via full and open competition, suggesting a robust market for these services. 3. Duration of 671 days indicates a medium-term need for sustainment. 4. Cost Plus Fixed Fee contract type may incentivize cost management by the contractor. 5. Northrop Grumman's role as incumbent or experienced provider likely influenced the award. 6. The specific National Defense code (541715) points to R&D in physical and engineering sciences. 7. This contract supports the Department of the Army's readiness and operational capabilities.
Value Assessment
Rating: good
Benchmarking the value of this $12.5 million contract is challenging without specific performance metrics or detailed cost breakdowns. However, the contract type (Cost Plus Fixed Fee) suggests that the government aims to control costs while ensuring the contractor is adequately compensated for their efforts. The duration of 671 days for sustainment services appears reasonable for maintaining complex defense systems. Further analysis would require comparing the proposed fixed fee and estimated costs against historical sustainment contracts for similar systems or against industry standards for R&D support services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. The presence of a competitive bidding process is generally favorable for price discovery and ensuring the government receives the best value. The number of bidders is not specified, but the 'full and open' designation implies a market with sufficient capacity to support competitive solicitations for these specialized sustainment services.
Taxpayer Impact: Taxpayers benefit from a competitive process that is expected to drive down costs and ensure efficient allocation of resources for critical defense sustainment.
Public Impact
The primary beneficiaries are the U.S. Army, ensuring the operational readiness of its Forward Area Air Defense System. Services delivered include sustainment activities crucial for maintaining the current operational status of defense equipment. Geographic impact is likely concentrated where the Forward Area Air Defense Systems are deployed and maintained. Workforce implications include specialized technical and engineering roles required for defense system sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not closely monitored.
- Reliance on a single contractor for sustainment could pose risks if performance issues arise.
- The specific nature of 'sustainment services' requires clear performance metrics to ensure value for money.
Positive Signals
- Awarded through full and open competition, indicating a healthy market and potential for competitive pricing.
- Northrop Grumman's likely experience with this system suggests a reduced risk of technical or execution challenges.
- The contract duration provides a stable period for essential system maintenance and support.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541715). This sector is characterized by innovation and specialized technical expertise. The defense industry, a significant consumer of R&D services, often contracts for sustainment and modernization of complex systems. Comparable spending benchmarks would involve analyzing other sustainment contracts for advanced defense platforms within the Department of Defense.
Small Business Impact
The data indicates this contract was awarded under 'full and open competition' and does not specify any small business set-aside. Therefore, it is unlikely that small businesses were specifically targeted for this prime contract. However, Northrop Grumman, as the prime contractor, may engage small businesses for subcontracting opportunities to fulfill specific aspects of the sustainment services, contributing to the broader small business ecosystem.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Army, with specific contracting officers and program managers responsible for monitoring performance, costs, and adherence to contract terms. The Cost Plus Fixed Fee structure necessitates diligent financial oversight to ensure the fixed fee is justified and costs are reasonable. Transparency is typically maintained through contract reporting mechanisms, and potential issues could be addressed by the Defense Contract Audit Agency or relevant Inspector General offices.
Related Government Programs
- Air Defense Systems Sustainment
- Northrop Grumman Defense Contracts
- Department of the Army R&D Spending
- Forward Area Air Defense System (FAADS) Program
- Cost Plus Fixed Fee Contracts in Defense
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
- Reliance on sustainment services highlights the importance of contractor performance and potential risks of service disruption.
- The specific system being sustained (Forward Area Air Defense System) may have unique technical complexities.
Tags
defense, department-of-defense, department-of-the-army, northrop-grumman-systems-corporation, sustainment-services, air-defense, research-and-development, cost-plus-fixed-fee, full-and-open-competition, virginia, operational-readiness
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SUSTAINMENT SERVICES REQUIRED TO MAINTAIN THE CURRENT OPERATIONAL STATUS OF THE FORWARD AREA AIR DEFENSE SYSTEM.
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 $12.5 million.
What is the period of performance?
Start: 2025-03-07. End: 2027-01-07.
What is Northrop Grumman's track record with sustainment services for defense systems, particularly air defense?
Northrop Grumman Systems Corporation has a significant history of providing complex sustainment, modernization, and support services for various defense platforms, including air and missile defense systems. Their extensive experience in aerospace and defense suggests a strong capability to manage the technical and logistical demands of maintaining operational readiness for systems like the Forward Area Air Defense System. While specific performance data for this exact contract is not yet available, the company's established presence and portfolio in defense sustainment indicate a generally reliable track record. Further investigation into past performance reviews and contract awards related to similar systems would provide a more granular assessment of their capabilities and potential risks.
How does the $12.5 million value compare to similar air defense sustainment contracts?
Directly comparing the $12.5 million value of this specific contract requires access to a database of similar sustainment contracts for air defense systems, including factors like system complexity, duration, and scope of services. However, for a medium-term sustainment effort (671 days) for a critical defense system, this amount appears to be within a reasonable range, especially considering the specialized nature of the work and the potential for advanced technology involved. Contracts for sustainment can vary widely based on the specific system's age, technological sophistication, and the level of support required (e.g., depot-level maintenance, field support, engineering services). Without more granular data on comparable contracts, it's difficult to definitively benchmark this value, but it does not immediately suggest an outlier.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for sustainment services?
The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Northrop Grumman, is the potential for the contractor to incur costs exceeding initial estimates, while the government is obligated to pay the actual allowable costs plus a pre-determined fixed fee. This structure can incentivize contractors to be efficient, but it also means the government bears the risk of cost overruns. For sustainment services, if unforeseen technical issues or supply chain disruptions arise, the total cost to the government could increase beyond projections. Effective oversight, clear definition of allowable costs, and robust negotiation of the fixed fee are crucial to mitigate these risks and ensure value for taxpayer money.
What is the expected program effectiveness based on the contract's focus on 'maintaining current operational status'?
The contract's explicit goal of 'maintaining the current operational status' of the Forward Area Air Defense System suggests that the primary measure of effectiveness will be the system's readiness and availability. This implies that the program aims to prevent degradation of performance, ensure reliability, and keep the system functional for its intended missions. Success will likely be measured by metrics such as system uptime, Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR), and the successful completion of scheduled maintenance and necessary repairs. If the contractor effectively fulfills these sustainment requirements, the program's effectiveness will be demonstrated through the consistent availability of a capable air defense asset for the U.S. Army.
How has spending on sustainment services for air defense systems evolved within the Department of the Army?
Spending on sustainment services for air defense systems within the Department of the Army has generally been a consistent and significant component of the overall defense budget. As weapon systems age, the need for maintenance, repair, and upgrades increases, driving sustainment costs. The Army continually evaluates its air defense capabilities, leading to potential shifts in spending priorities between different systems or types of sustainment (e.g., organic depot maintenance versus contractor logistics support). Factors such as technological advancements, geopolitical threats, and budget allocations influence these spending patterns. Analyzing historical spending trends for specific air defense platforms or categories would reveal fluctuations and strategic shifts in how the Army prioritizes and funds the upkeep of its air defense assets.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $64,986,572
Exercised Options: $12,506,798
Current Obligation: $12,506,798
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $448,500
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T19D0178
IDV Type: IDC
Timeline
Start Date: 2025-03-07
Current End Date: 2027-01-07
Potential End Date: 2030-01-07 12:01:00
Last Modified: 2026-01-07
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)