DoD awards $21.4M for infrared countermeasures engineering support to Northrop Grumman

Contract Overview

Contract Amount: $21,416,142 ($21.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-06-30

End Date: 2025-09-30

Contract Duration: 1,553 days

Daily Burn Rate: $13.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COMMON INFRARED COUNTERMEASURES (CIRCM) - ATW FLARE/IRCM ENGINEERING SUPPORT TASK ORDER

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: COMMON INFRARED COUNTERMEASURES (CIRCM) - ATW FLARE/IRCM ENGINEERING SUPPORT TASK ORDER Key points: 1. Contract awarded for critical infrared countermeasures (CIRCM) engineering support. 2. Northrop Grumman, a major defense contractor, is the awardee. 3. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The duration of the task order is approximately 4.25 years. 5. The contract type is Cost Plus Fixed Fee (CPFF), which allows for cost reimbursement plus a fixed fee. 6. This award represents a significant investment in maintaining and enhancing defense capabilities. 7. The North American Industry Classification System (NAICS) code suggests a focus on system manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this specific task order is challenging without access to the parent IDIQ contract's ceiling and historical performance. However, the Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs compared to fixed-price contracts if cost controls are not rigorously managed. The fixed fee component provides some predictability for the contractor's profit, but the overall cost is subject to actual expenses incurred. Further analysis would require comparing the proposed labor rates and indirect costs against industry standards for similar engineering support services in the defense sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, indicating that it was not competed. This approach is often used when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of fulfilling the requirement, potentially due to prior development or integration efforts. The lack of competition means that the government did not solicit bids from multiple vendors, which can limit price discovery and potentially lead to higher costs than if a competitive process had been employed.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. The government relies on negotiation and oversight to ensure fair pricing.

Public Impact

The Department of the Army benefits from continued engineering support for its Common Infrared Countermeasures (CIRCM) systems. This contract ensures the sustainment and potential enhancement of critical defense technology designed to protect aircraft from missile threats. The geographic impact is primarily within the United States, supporting defense operations and potentially involving personnel at various military installations. Workforce implications include the employment of specialized engineers and technical staff by Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Cost Plus Fixed Fee contracts require robust oversight to prevent cost overruns.
Reliance on a single source could create vendor lock-in and limit future flexibility.

Positive Signals

Ensures continuity of critical engineering support for advanced defense systems.
Leverages specialized expertise of a known contractor with experience in CIRCM.
Supports the operational readiness of military aircraft by maintaining advanced countermeasures.

Sector Analysis

The defense sector, particularly aerospace and defense systems manufacturing, is characterized by high R&D investment and long product lifecycles. Contracts for specialized engineering support are common to maintain and upgrade complex systems like infrared countermeasures. The market is dominated by a few large prime contractors, and competition for specific task orders can be limited, especially when they relate to proprietary technologies or integrated systems. Spending benchmarks for similar engineering support services can vary widely based on system complexity and required expertise.

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 defense corporation. While there may be subcontracting opportunities for small businesses, the primary award is not directed towards them. The impact on the small business ecosystem is indirect, depending on Northrop Grumman's subcontracting strategy.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the contracting officer and program management office within the Department of the Army. Accountability measures will focus on tracking incurred costs against the contract ceiling and ensuring the fixed fee is earned based on performance milestones. Transparency is typically managed through contract reporting requirements and audits. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Common Infrared Countermeasures (CIRCM)
Aircraft Survivability Equipment
Defense Engineering Services
Northrop Grumman Defense Contracts
Department of the Army Procurement

Risk Flags

Sole-source award
Cost-reimbursable contract type
Potential for cost overruns
Lack of competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. COMMON INFRARED COUNTERMEASURES (CIRCM) - ATW FLARE/IRCM ENGINEERING SUPPORT TASK ORDER

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 $21.4 million.

What is the period of performance?

Start: 2021-06-30. End: 2025-09-30.

What is Northrop Grumman's track record with similar engineering support contracts for the Department of Defense?

Northrop Grumman has a long and extensive history of providing engineering, manufacturing, and support services to the Department of Defense across various platforms and systems. They are a major defense contractor with significant experience in areas such as aerospace, defense electronics, and information systems. For infrared countermeasures and aircraft survivability systems specifically, Northrop Grumman has been a key player, often involved in the development, production, and sustainment of these critical technologies. Their track record generally includes successful delivery on complex programs, though like any large contractor, they may have faced scrutiny or challenges on specific contracts related to cost, schedule, or performance. Detailed performance reviews for individual contracts would be necessary for a comprehensive assessment.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for this type of service?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined, or when there is a high degree of uncertainty in the costs. It allows the government to reimburse the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility for the contractor to adapt to changing requirements but can potentially lead to higher overall costs for the government if not managed carefully, as the government bears the cost risk. It differs from Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) by having a fixed profit rather than one that can be adjusted based on performance targets. For engineering support, CPFF can be advantageous when innovation or problem-solving is paramount and difficult to pre-price.

What are the primary risks associated with a sole-source award for critical defense systems engineering?

The primary risks associated with a sole-source award for critical defense systems engineering include a lack of price competition, which can lead to inflated costs for the government and taxpayers. There's also a risk of reduced innovation and efficiency, as the contractor may face less pressure to optimize processes or develop cost-saving solutions without competitive alternatives. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future. Dependence on a single supplier can also pose supply chain risks if that supplier experiences financial difficulties or operational disruptions. Finally, the absence of a competitive bidding process can raise concerns about fairness and transparency in the procurement.

What is the historical spending pattern for CIRCM engineering support by the Department of the Army?

Historical spending on Common Infrared Countermeasures (CIRCM) engineering support by the Department of the Army reflects a sustained commitment to aircraft survivability. While specific figures for 'engineering support' as a distinct category can be difficult to isolate without detailed contract data, the overall investment in CIRCM programs has been substantial over the years. This includes research, development, procurement, and sustainment activities. Spending typically fluctuates based on program phases, modernization efforts, and operational demands. The Army has consistently prioritized advanced threat detection and countermeasures to protect its rotary-wing and fixed-wing aircraft fleets, indicating a steady, albeit variable, expenditure stream for related engineering and technical services.

How does the $21.4 million award compare to the total contract value or ceiling of the parent IDIQ contract?

The $21.4 million value of this specific delivery order represents a portion of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Without knowing the total ceiling or value of the parent IDIQ contract, it is difficult to definitively assess how significant this award is in the overall context. IDIQ contracts are designed to provide a flexible ordering mechanism over a period of time, with a maximum potential value. This task order could represent a small fraction of the total potential value, or it could be one of several substantial orders placed against the IDIQ. A comprehensive understanding requires examining the parent contract's terms, including its total authorized ceiling and the period of performance for placing orders.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008

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

Financial Breakdown

Contract Ceiling: $22,356,458

Exercised Options: $21,416,142

Current Obligation: $21,416,142

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $119,893

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ19D0110

IDV Type: IDC

Timeline