DoD's $99M OPIR Sensor Exploitation Task Order Awarded to Northrop Grumman Faces Competition Concerns
Contract Overview
Contract Amount: $99,035,623 ($99.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2013-04-01
End Date: 2018-03-30
Contract Duration: 1,824 days
Daily Burn Rate: $54.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: IGF::OT::IGF THE PURPOSE OF TASK ORDER 7250 IS TO IDENTIFY AND OPERATIONALIZE OVERHEAD PERSISTENT INFRARED (OPIR) AND OTHER SENSOR EXPLOITATION CAPABILITIES WHICH PROVIDE EARLY INTERCEPT OPPORTUNITIES AND INCREASE RAID HANDLING OF THE BALLISTIC MISSILE DEFENSE SYSTEM (BMDS).
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $99.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF THE PURPOSE OF TASK ORDER 7250 IS TO IDENTIFY AND OPERATIONALIZE OVERHEAD PERSISTENT INFRARED (OPIR) AND OTHER SENSOR EXPLOITATION CAPABILITIES WHICH PROVIDE EARLY INTERCEPT OPPORTUNITIES AND INCREASE RAID HANDLING OF THE BALLISTIC MISSILE DEFENSE SYSTEM (BMDS). Key points: 1. The task order focuses on enhancing ballistic missile defense capabilities through advanced sensor exploitation. 2. Northrop Grumman, a major defense contractor, secured the award. 3. The contract type is Cost Plus Award Fee, which can incentivize performance but also carries cost risks. 4. The sector is Research and Development, specifically in physical and engineering sciences.
Value Assessment
Rating: questionable
The Cost Plus Award Fee structure allows for costs plus a fee that is adjusted based on performance. Without detailed performance metrics and fee structures, it's difficult to assess if the pricing is truly competitive or if it allows for excessive profit margins.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although advertised as full and open competition, the award to a single large contractor suggests limited effective competition or a specific capability requirement that favored Northrop Grumman. The price discovery mechanism relies heavily on the negotiation process and performance incentives.
Taxpayer Impact: Taxpayer funds are being used for advanced defense technology. The effectiveness of the competition and the final negotiated price will determine the overall value for taxpayers.
Public Impact
Enhances national security by improving ballistic missile defense. Supports technological advancement in sensor exploitation and data analysis. Potential for job creation within the defense industry and related research fields. Invests in critical infrastructure for early warning and threat response.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure can lead to cost overruns.
- Limited visibility into specific performance metrics and fee adjustments.
- Potential for contractor lock-in due to specialized technology.
Positive Signals
- Addresses a critical national security need for missile defense.
- Leverages advanced sensor technology for improved threat detection.
- Awarded under full and open competition, theoretically allowing for best value.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on advanced sensor exploitation for defense applications. Spending in this area is crucial for maintaining technological superiority but can be subject to cost overruns and long development cycles.
Small Business Impact
The data indicates this was a large contract awarded to a major corporation, Northrop Grumman. There is no explicit mention of small business participation, suggesting that small businesses may not have been primary awardees or subcontractors on this specific task order.
Oversight & Accountability
Oversight would typically involve regular reporting from the contractor, performance reviews by the Missile Defense Agency, and potentially audits to ensure funds are used appropriately and objectives are met. The Cost Plus Award Fee structure requires diligent oversight to manage performance incentives and costs.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Cost Plus Award Fee structure can lead to higher costs than fixed-price contracts.
- Lack of detailed performance metrics makes value assessment difficult.
- Potential for limited future competition if capabilities become highly specialized.
- Long duration of the contract (over 4 years) increases exposure to changing requirements and economic factors.
Tags
research-and-development-in-the-physical, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $99.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF THE PURPOSE OF TASK ORDER 7250 IS TO IDENTIFY AND OPERATIONALIZE OVERHEAD PERSISTENT INFRARED (OPIR) AND OTHER SENSOR EXPLOITATION CAPABILITIES WHICH PROVIDE EARLY INTERCEPT OPPORTUNITIES AND INCREASE RAID HANDLING OF THE BALLISTIC MISSILE DEFENSE SYSTEM (BMDS).
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 (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $99.0 million.
What is the period of performance?
Start: 2013-04-01. End: 2018-03-30.
What specific performance metrics are used to determine the award fee, and how do these metrics ensure value for money in R&D?
The specific performance metrics are not detailed in the provided data. However, for a Cost Plus Award Fee contract in R&D, metrics often relate to technical milestones, schedule adherence, and innovation. Effective oversight by the agency is crucial to ensure these metrics genuinely drive value and prevent cost overruns, ensuring taxpayer funds are used efficiently for desired technological advancements.
Given the 'full and open competition' designation, what factors led to a single award to Northrop Grumman, and what are the potential risks to future competition?
A single award under full and open competition could indicate that Northrop Grumman was the only offeror meeting all technical requirements, possessed unique capabilities, or submitted the most advantageous proposal. This can pose a risk of market concentration and potential future sole-source situations if competitors cannot bridge the capability gap, potentially leading to higher prices.
How does the 'Research and Development in the Physical, Engineering, and Life Sciences' classification impact the oversight and effectiveness of this task order?
This classification implies a focus on innovation and exploration, which inherently involves higher risk and uncertainty than fixed-price contracts for established services. Oversight must be adaptive, focusing on progress towards research goals and managing evolving technical challenges rather than strict adherence to pre-defined outputs. Effectiveness is measured by the advancement of OPIR and sensor exploitation capabilities, contributing to missile defense readiness.
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 › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 1555 N NEWPORT RD, COLORADO SPRINGS, CO, 80916
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: $99,655,449
Exercised Options: $99,655,449
Current Obligation: $99,035,623
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9500110D0001
IDV Type: IDC
Timeline
Start Date: 2013-04-01
Current End Date: 2018-03-30
Potential End Date: 2018-03-30 00:00:00
Last Modified: 2018-08-01
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