DoD Awards Northrop Grumman $107.5M for Satellite Telecommunications Equipment Maintenance

Contract Overview

Contract Amount: $107,501,162 ($107.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2003-12-24

End Date: 2009-06-30

Contract Duration: 2,015 days

Daily Burn Rate: $53.4K/day

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: 200409!000013!2100!W9132V!* !W9132V04C0010 !A!N! !N! ! !20031224!20081231!091808832!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!ELECTRONIC SYSTEMS !LINTHICUM HEIG !MD!21090!47125!003!24!LINTHICUM !ANNE ARUNDEL !MARYLAND !+000001200000!N!N!000088909384!J099!MAINT&REPAIR OF EQ/MISCELLANEOUS EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !CAA !MDA SUPPORT !517410!E! !3! ! ! ! ! !99990909!B! ! !N!Z!C!U!R!1!001!N!1B!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y!2100!W90B03!0001! !

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $107.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200409!000013!2100!W9132V!* !W9132V04C0010 !A!N! !N! ! !20031224!20081231!091808832!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!ELECTRONIC SYSTEMS !LINTHICUM HEIG !MD!21090!47125!003!24!LINTHICUM !ANNE… Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for maintenance and repair of electronic equipment. 2. The contract value is substantial at $107.5 million, indicating significant long-term support needs. 3. The primary risk lies in the potential for cost overruns in a cost-plus contract type. 4. This spending falls within the broader IT and Defense sectors, specifically supporting satellite communications.

Value Assessment

Rating: fair

The contract is a Cost Plus Award Fee type, which can lead to higher costs if performance incentives are not carefully managed. Benchmarking against similar maintenance contracts for complex electronic systems is crucial to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The competition method is not specified, but the contract is awarded to a single entity. Lack of clear competition could limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The taxpayer impact is significant due to the $107.5 million award. Ensuring efficient spending through effective oversight and performance incentives is key to maximizing taxpayer value.

Public Impact

Supports critical Department of Defense satellite telecommunications infrastructure. Ensures operational readiness and effectiveness of electronic communication equipment. Potential for job creation within Northrop Grumman and its subcontractors. Long-term contract duration suggests ongoing reliance on these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contract type increases risk of overspending.
Limited competition information raises concerns about price reasonableness.
Contract duration is lengthy, requiring sustained oversight.

Positive Signals

Awarded to a major defense contractor with established capabilities.
Supports critical national security infrastructure.
Potential for performance-based incentives to drive efficiency.

Sector Analysis

This contract falls under the Information Technology and Defense sectors, specifically focusing on the maintenance and repair of electronic and communication equipment, including satellite telecommunications. Spending benchmarks for similar long-term maintenance contracts for complex defense systems are typically high, reflecting the specialized nature of the services.

Small Business Impact

Analysis of small business participation is not available from the provided data. However, large prime contractors like Northrop Grumman often utilize a network of subcontractors, which could include small businesses.

Oversight & Accountability

Oversight will be critical given the cost-plus award fee structure and the long duration of the contract. The Department of Defense must ensure robust performance monitoring and financial controls to manage costs effectively and hold the contractor accountable.

Related Government Programs

Satellite Telecommunications
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Cost Overruns
Performance Below Expectations
Lack of Competition
Contract Scope Creep
Dependency on Single Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $107.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200409!000013!2100!W9132V!* !W9132V04C0010 !A!N! !N! ! !20031224!20081231!091808832!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!ELECTRONIC SYSTEMS !LINTHICUM HEIG !MD!21090!47125!003!24!LINTHICUM !ANNE ARUNDEL !MARYLAND !+000001200000!N!N!000088909384!J099!MAINT&REPAIR OF EQ/MISCELLANEOUS EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !CAA !MDA SUPPORT !517410!E! !3! ! ! ! ! !99990

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 $107.5 million.

What is the period of performance?

Start: 2003-12-24. End: 2009-06-30.

What specific performance metrics are in place to ensure the value received for the $107.5 million investment in satellite telecommunications maintenance?

The provided data does not detail specific performance metrics. However, for a Cost Plus Award Fee contract, performance is typically measured against pre-defined objectives related to system availability, response times, and quality of repairs. The 'award fee' component suggests that bonuses are tied to exceeding these performance targets, incentivizing the contractor to deliver high-quality services efficiently.

What are the primary risks associated with the 'Cost Plus Award Fee' contract type for this satellite telecommunications maintenance, and how are they being mitigated?

The primary risk is the potential for cost overruns, as the government reimburses Northrop Grumman for allowable costs plus a fee that can be adjusted based on performance. Mitigation strategies typically involve stringent cost accounting standards, detailed audits, and clearly defined performance criteria for the award fee. Effective government oversight is crucial to ensure costs are reasonable and allocable.

How does this contract contribute to the overall effectiveness of the Department of Defense's satellite telecommunications capabilities?

This contract is essential for maintaining the operational readiness and longevity of critical satellite telecommunications equipment. By ensuring timely and effective maintenance and repair, it directly supports the reliable functioning of communication networks vital for command and control, intelligence gathering, and logistical operations, thereby enhancing overall mission effectiveness.

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: ELECTRONIC SYSTEMS, LINTHICUM HEIG, MD

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

Financial Breakdown

Contract Ceiling: $15,805,109

Exercised Options: $1,200,000

Current Obligation: $107,501,162

Contract Characteristics

Cost or Pricing Data: YES

Timeline