Northrop Grumman awarded $21.1M for R&D services, with a 1711-day period of performance
Contract Overview
Contract Amount: $21,128,600 ($21.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2014-09-23
End Date: 2019-05-31
Contract Duration: 1,711 days
Daily Burn Rate: $12.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 8
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF BASE AWARD- 15 MTH PERIOD OF PERFORMANCE
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $21.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF BASE AWARD- 15 MTH PERIOD OF PERFORMANCE Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Cost-plus-fixed-fee contract type may incentivize cost overruns if not closely monitored. 3. The contract duration of 1711 days indicates a long-term need for these R&D services. 4. Performance is in Maryland, a hub for defense and aerospace contractors. 5. The specific NAICS code (541712) points to specialized R&D in physical, engineering, and life sciences. 6. No small business set-aside was utilized, indicating the primary contractor was selected based on capability.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more specific details on the R&D deliverables. However, the $21.1 million award over approximately 4.7 years suggests a significant investment. The cost-plus-fixed-fee structure requires careful oversight to ensure costs remain reasonable and that the fixed fee adequately compensates the contractor for their efforts without excessive profit. Comparing this to similar large-scale R&D contracts within the Department of Defense would provide a clearer picture of its value proposition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 8 bidders suggests a competitive environment for this type of R&D service. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government, as contractors vie for the award.
Taxpayer Impact: The full and open competition likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award.
Public Impact
The primary beneficiary is the Department of Defense, which receives advanced research and development services. The services delivered are likely to contribute to advancements in physical, engineering, or life sciences relevant to national security. The geographic impact is concentrated in Maryland, supporting the local economy and specialized workforce. This contract supports a highly skilled workforce in research and development roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can lead to increased costs if not managed diligently.
- Long contract durations may require adjustments for evolving technological landscapes.
- Lack of small business participation could limit opportunities for smaller innovative firms.
Positive Signals
- Awarded through full and open competition, ensuring a broad range of potential solutions.
- Northrop Grumman is a major defense contractor with a proven track record in R&D.
- The contract addresses a specific R&D need within the Department of the Army.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for such services is characterized by high barriers to entry due to specialized expertise and facilities. Major defense contractors like Northrop Grumman are key players in this space, often competing for large, long-term government contracts. Spending in this sector is critical for maintaining technological superiority and addressing future defense challenges.
Small Business Impact
This contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified (sb: false). This suggests that the primary contract was awarded to a large business based on its capabilities and capacity to perform the complex R&D requirements. While this ensures a capable prime contractor, it may limit direct opportunities for small businesses to participate in this specific award, though they might be involved as subcontractors to the prime.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Army. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to track expenditures and ensure the fixed fee remains appropriate. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office would have jurisdiction to investigate any potential fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development Programs
- Army Advanced Technology Development
- Northrop Grumman Defense Contracts
- Federal R&D Spending
Risk Flags
- Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
- Long period of performance may necessitate adaptation to evolving technological needs.
- No explicit small business subcontracting goals noted.
Tags
department-of-defense, department-of-the-army, northrop-grumman-systems-corporation, research-and-development, physical-engineering-life-sciences, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, maryland, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF BASE AWARD- 15 MTH PERIOD OF PERFORMANCE
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 $21.1 million.
What is the period of performance?
Start: 2014-09-23. End: 2019-05-31.
What specific research and development activities are encompassed by this contract?
The contract's NAICS code, 541712, specifies 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' While the exact nature of the R&D is not detailed in the provided data, it implies work in areas such as materials science, advanced manufacturing, propulsion systems, sensor technology, or other engineering and scientific disciplines critical to defense applications. The 'Research and Development in the Physical, Engineering, and Life Sciences' category covers fundamental research, applied research, and experimental development. Given the contractor and agency, it is highly probable that the R&D efforts are geared towards enhancing military capabilities, developing new defense technologies, or improving existing systems.
How does the $21.1 million award compare to typical R&D spending for similar projects within the Department of Defense?
The $21.1 million award over a period of approximately 4.7 years (1711 days) represents a substantial investment, averaging around $4.5 million per year. This figure is within the range of many large-scale, long-term R&D contracts awarded by the Department of Defense. However, the 'typical' spending can vary dramatically based on the specific technological domain, the phase of R&D (basic, applied, or developmental), and the complexity of the research. Contracts for cutting-edge areas like AI, cyber, or advanced materials can easily reach tens or hundreds of millions of dollars. Without knowing the precise scope, it's difficult to definitively benchmark, but it signifies a significant commitment to a particular R&D objective.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for this R&D effort?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the government agrees to pay all allowable costs incurred by the contractor, the contractor's profit is fixed. This structure can incentivize contractors to incur higher costs if they believe it will lead to a larger overall profit margin, especially if the fixed fee is not carefully calibrated against the expected effort and risk. For R&D, where outcomes can be uncertain, managing scope creep and ensuring cost efficiency is paramount. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value.
What is Northrop Grumman's track record with similar R&D contracts for the Department of Defense?
Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in research and development across various domains, including aerospace, defense electronics, and information systems. They have a long history of securing and executing large, complex R&D contracts with the Department of Defense and its various branches, including the Department of the Army. Their track record typically involves developing and integrating advanced technologies for military applications. While specific performance metrics for past R&D contracts are not provided here, their status as a prime contractor on numerous high-value programs suggests a generally reliable performance history, though like any large contractor, they may have faced challenges on specific projects.
How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' sector evolved over the past decade?
Federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' sector (NAICS 541712 and related codes) has generally seen fluctuations but has remained a significant portion of the overall federal R&D budget. Agencies like the Department of Defense (DoD), National Science Foundation (NSF), and Department of Energy (DOE) are major contributors. Historically, defense-related R&D has seen periods of increased investment during times of heightened geopolitical tension or technological competition, followed by potential reductions during budget consolidation. Overall, the trend has been towards prioritizing areas like artificial intelligence, cybersecurity, advanced materials, and biotechnology, reflecting evolving national security and economic priorities. Specific year-over-year changes can be influenced by appropriations cycles and administration priorities.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 8
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
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: $21,128,600
Exercised Options: $21,128,600
Current Obligation: $21,128,600
Subaward Activity
Number of Subawards: 69
Total Subaward Amount: $28,031,151
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-09-23
Current End Date: 2019-05-31
Potential End Date: 2019-05-31 00:00:00
Last Modified: 2025-12-31
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