DoD awards Northrop Grumman $27.7M for ICBM software sustainment, raising value concerns
Contract Overview
Contract Amount: $27,746,098 ($27.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2015-09-30
End Date: 2020-01-31
Contract Duration: 1,584 days
Daily Burn Rate: $17.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT::IGF ENGINEERING SERVICES IN SUPPORT OF ICBM OPERATIONAL SOFTWARE SUSTAINMENT PROGRAM (IOSSP) SOFTWARE SUSTAINMENT
Place of Performance
Location: HILL AFB, DAVIS County, UTAH, 84056
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $27.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF ENGINEERING SERVICES IN SUPPORT OF ICBM OPERATIONAL SOFTWARE SUSTAINMENT PROGRAM (IOSSP) SOFTWARE SUSTAINMENT Key points: 1. High contract value for sustainment services. 2. Single awardee suggests potential lack of competition. 3. Long contract duration may indicate ongoing need. 4. Engineering services sector is critical for defense.
Value Assessment
Rating: questionable
The contract value of $27.7M over approximately 4 years for software sustainment appears high. Benchmarking against similar ICBM sustainment contracts is needed to assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific award type (delivery order) and the single awardee warrant further investigation into the competitive landscape.
Taxpayer Impact: Taxpayer funds are being used for critical defense infrastructure sustainment. Ensuring competitive pricing is essential to maximize value.
Public Impact
Ensures continued operational capability of Intercontinental Ballistic Missiles (ICBMs). Supports national security by maintaining strategic deterrence. Impacts the defense industrial base and specialized engineering workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in cost-plus contracts.
- Risk of vendor lock-in for specialized software.
- Long-term sustainment costs can escalate.
Positive Signals
- Critical national security function.
- Awarded under full and open competition.
- Supports existing strategic assets.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting critical defense systems. Spending benchmarks for similar software sustainment programs for major weapon systems are typically in the millions to billions, depending on complexity and duration.
Small Business Impact
The data does not indicate any specific subcontracting goals for small businesses on this contract. Further analysis would be needed to determine if small businesses were involved or had opportunities.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency, suggesting a level of oversight. However, the cost-plus contract type necessitates robust monitoring to control expenditures and ensure performance.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High contract value.
- Cost-plus contract type.
- Long contract duration.
- Potential for single-source dependency in future.
- Lack of specific small business participation noted.
Tags
engineering-services, department-of-defense, ut, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::CT::IGF ENGINEERING SERVICES IN SUPPORT OF ICBM OPERATIONAL SOFTWARE SUSTAINMENT PROGRAM (IOSSP) SOFTWARE SUSTAINMENT
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $27.7 million.
What is the period of performance?
Start: 2015-09-30. End: 2020-01-31.
What is the total cost of ownership for this software sustainment program over its lifecycle, and how does it compare to industry benchmarks?
Determining the total cost of ownership requires analyzing not only the current award but also any follow-on contracts, sustainment activities, and potential upgrades. Benchmarking against similar long-term sustainment programs for complex defense systems is crucial. Without lifecycle cost data, it's difficult to definitively assess value, but the current $27.7M award suggests significant ongoing investment.
What are the specific risks associated with relying on a single contractor for critical ICBM software sustainment over an extended period?
Reliance on a single contractor for critical software sustainment poses risks of vendor lock-in, reduced negotiation leverage, and potential knowledge loss if the contractor's personnel turnover is high. It also limits opportunities for innovation from competing firms. Mitigating these risks requires strong contract management, clear performance metrics, and potentially developing in-house expertise or fostering a competitive environment for future contracts.
How effectively has the cost-plus fixed fee structure controlled costs and ensured efficient delivery of software sustainment services for this program?
Cost-plus contracts, while offering flexibility for evolving requirements, inherently carry a higher risk of cost overruns compared to fixed-price contracts. The effectiveness of this structure depends heavily on the government's ability to establish realistic cost estimates, monitor expenditures closely, and incentivize efficiency. Without detailed performance and cost data, it's challenging to definitively assess effectiveness, but the potential for cost escalation remains a key concern.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $29,218,890
Exercised Options: $29,218,890
Current Obligation: $27,746,098
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA821415D0001
IDV Type: IDC
Timeline
Start Date: 2015-09-30
Current End Date: 2020-01-31
Potential End Date: 2020-01-31 00:00:00
Last Modified: 2022-06-01
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