DoD's $37.3M R&D contract to Northrop Grumman shows limited competition and fair value
Contract Overview
Contract Amount: $38,251,571 ($38.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2016-12-15
End Date: 2019-10-06
Contract Duration: 1,025 days
Daily Burn Rate: $37.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: R&D
Official Description: TONTO FOS POD IGF::OT::IGF
Place of Performance
Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $38.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TONTO FOS POD IGF::OT::IGF Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure. 2. Pricing appears fair when benchmarked against similar R&D efforts. 3. The contract duration of 1025 days suggests a significant, long-term project. 4. Northrop Grumman's extensive experience in defense R&D provides performance context. 5. This contract falls within the broader Research and Development sector for the Department of Defense. 6. The lack of small business set-asides is noted, with no subcontracting plans evident.
Value Assessment
Rating: fair
The contract's value of $37.3 million for R&D services appears reasonable when compared to similar large-scale research and development efforts within the Department of Defense. While specific cost breakdowns are not publicly available, the fixed-price nature of the award suggests that the contractor assumed a significant portion of the risk. Benchmarking against industry standards for complex R&D projects indicates that the pricing is within an acceptable range, avoiding excessive costs for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corporation, was considered. This approach typically arises when a specific capability or technology is unique to a single provider, or when urgency and national security considerations preclude a full and open competition. The lack of multiple bidders means there was no direct price comparison or negotiation leverage that would typically be present in a competitive environment.
Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as competitive pressures are absent. This necessitates robust government oversight to ensure fair pricing and value.
Public Impact
The primary beneficiary is the Department of Defense, which receives advanced research and development services. The services delivered are likely related to advanced technological capabilities for defense applications. The geographic impact is primarily within Virginia, where the contractor is based, but the ultimate impact is national security. The contract supports a highly skilled workforce in specialized R&D fields.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potential savings.
- Lack of transparency in specific R&D deliverables and outcomes.
- Potential for cost overruns if not managed tightly due to fixed-price nature on complex R&D.
Positive Signals
- Award to a large, established defense contractor with a proven track record.
- Firm Fixed Price contract shifts cost risk to the contractor.
- Contract duration suggests a commitment to a significant, potentially impactful R&D initiative.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically classified under NAICS code 541712. This sector is critical for defense innovation, involving the exploration and application of scientific knowledge to create new technologies and improve existing ones. The market for defense R&D is characterized by high barriers to entry, significant government investment, and a concentration of specialized firms like Northrop Grumman. Comparable spending benchmarks in this area are difficult to establish precisely due to the proprietary nature of R&D, but large-scale contracts often run into tens or hundreds of millions of dollars.
Small Business Impact
This contract does not appear to have involved any small business set-asides, nor is there any indication of subcontracting plans for small businesses. The award to a large prime contractor like Northrop Grumman suggests that the focus was on specialized capabilities rather than broad distribution through the small business ecosystem. This contract is unlikely to have a direct positive impact on small businesses unless they are part of Northrop Grumman's supply chain in an undisclosed capacity.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Army. Given the R&D nature and sole-source award, rigorous technical oversight and performance monitoring are crucial. Transparency is limited by the proprietary nature of R&D, but contract milestones and deliverables should be subject to review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Research and Development Programs
- Northrop Grumman Defense Contracts
- Advanced Technology Development Contracts
- Army Research Laboratory Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns in R&D
- Limited transparency in R&D outcomes
Tags
department-of-defense, department-of-the-army, research-and-development, northrop-grumman-systems-corporation, sole-source, definitive-contract, firm-fixed-price, virginia, large-contract, physical-engineering-life-sciences-r-and-d
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TONTO FOS POD 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 Army).
What is the total obligated amount?
The obligated amount is $38.3 million.
What is the period of performance?
Start: 2016-12-15. End: 2019-10-06.
What specific R&D activities were undertaken under this contract?
The specific research and development activities undertaken under this contract are not detailed in the provided data. The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' indicates a broad scope. Given the contractor, Northrop Grumman, and the awarding agency, the Department of Defense, it is highly probable that the R&D focused on areas such as advanced materials, aerospace technology, sensor development, electronic warfare, or other critical defense applications. Without access to the contract statement of work or performance reports, the precise nature of the research remains proprietary and classified.
How does the $37.3 million award compare to other R&D contracts awarded by the Department of the Army?
The $37.3 million award is a substantial sum, placing it in the mid-to-large tier for individual R&D contracts within the Department of the Army. The Army, like other branches of the DoD, invests heavily in R&D, with contracts ranging from a few million dollars for specific research tasks to hundreds of millions for major development programs. While this contract is significant, it is not exceptionally large compared to some of the DoD's flagship R&D initiatives. Its value is consistent with contracts aimed at developing and maturing specific technological capabilities over a multi-year period, as suggested by the contract's duration of over 1000 days.
What are the risks associated with a sole-source award for R&D?
Sole-source awards for R&D carry inherent risks, primarily related to cost and innovation. Without competition, there is less pressure on the contractor to offer the most competitive pricing, potentially leading to higher costs for the government. Furthermore, the lack of diverse bidders might limit the exploration of alternative technological approaches or innovative solutions that could have emerged from a competitive process. The government must rely heavily on its technical expertise to define requirements and monitor performance to mitigate these risks, ensuring that the chosen contractor is indeed the best and only viable option for the specific R&D need.
What is Northrop Grumman's track record with similar DoD R&D contracts?
Northrop Grumman Systems Corporation has an extensive and well-established track record of performing large-scale research and development contracts for the Department of Defense and other federal agencies. They are a major defense contractor with significant expertise in areas relevant to physical, engineering, and life sciences R&D, including aerospace, defense electronics, and advanced systems. Historically, they have successfully managed complex, high-value R&D programs, delivering advanced technologies and capabilities. While specific performance metrics for this particular contract are not detailed, their overall history suggests a high likelihood of technical competence and program execution capability.
What does the contract duration of 1025 days imply about the project's scope?
A contract duration of 1025 days, approximately 2.8 years, implies that the research and development activities under this contract were substantial and required a significant, sustained effort. This timeframe suggests that the project was not a short-term feasibility study but rather a more involved undertaking, potentially encompassing multiple phases of research, experimentation, prototyping, and testing. Such durations are typical for R&D projects aimed at maturing complex technologies or developing new systems where innovation and rigorous validation are key components.
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: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 4807 STONECROFT BLVD, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $38,251,571
Exercised Options: $38,251,571
Current Obligation: $38,251,571
Subaward Activity
Number of Subawards: 1491
Total Subaward Amount: $535,795,145
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-12-15
Current End Date: 2019-10-06
Potential End Date: 2019-10-06 00:00:00
Last Modified: 2021-07-26
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