Air Force awards $29.3M engineering services order to Northrop Grumman for ICBM ground support

Contract Overview

Contract Amount: $29,264,021 ($29.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2018-02-01

End Date: 2019-01-31

Contract Duration: 364 days

Daily Burn Rate: $80.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: GROUND SUBSYSTEM SUPPORT CONTRACT, ICBM GROUND DIVISION GENERAL SUSTAINMENT ENGINEERING SERVICES, AWARD OF ORDERING PERIOD 4

Place of Performance

Location: HILL AFB, DAVIS County, UTAH, 84056

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $29.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GROUND SUBSYSTEM SUPPORT CONTRACT, ICBM GROUND DIVISION GENERAL SUSTAINMENT ENGINEERING SERVICES, AWARD OF ORDERING PERIOD 4 Key points: 1. Contract provides essential sustainment engineering for intercontinental ballistic missile (ICBM) ground systems. 2. The award was made under a full and open competition, suggesting a competitive bidding process. 3. Pricing appears reasonable given the specialized nature of ICBM ground support and engineering services. 4. The contract duration is one year, indicating a focused scope for this specific ordering period. 5. Northrop Grumman is a major defense contractor with extensive experience in aerospace and defense systems. 6. This contract supports critical national defense infrastructure, ensuring the readiness of strategic deterrent capabilities.

Value Assessment

Rating: good

The contract value of approximately $29.3 million for one year of engineering services appears to be within a reasonable range for specialized ICBM ground support. Benchmarking against similar complex defense sustainment contracts suggests that the pricing is competitive, especially considering the critical nature of the systems supported. The cost-plus-fixed-fee (CPFF) contract type allows for flexibility while providing a defined profit margin for the contractor, which is common in high-risk, high-complexity defense programs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the competitive nature of the award suggests that the Air Force sought the best value from a range of potential providers. This approach generally leads to more favorable pricing and innovative solutions for the government.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs and improves service quality.

Public Impact

The primary beneficiaries are the Department of the Air Force and the United States' strategic deterrence capabilities. Services delivered include engineering, sustainment, and technical support for ICBM ground subsystems. The geographic impact is primarily within the United States, supporting critical missile sites. Workforce implications include the employment of specialized engineers and technical personnel by Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely managed.
Reliance on a single large contractor for critical sustainment services could pose long-term strategic risks.
The specialized nature of the work may limit the pool of potential future competitors.

Positive Signals

Award to an experienced contractor with a proven track record in complex defense systems.
Full and open competition suggests a robust process for selecting the best value provider.
Contract supports the sustainment of critical national security assets, ensuring operational readiness.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's critical infrastructure. The market for ICBM sustainment is highly specialized, dominated by a few large defense contractors with the necessary security clearances and technical expertise. Spending in this niche is driven by national security requirements and the lifecycle management of aging strategic weapon systems. Comparable spending benchmarks are difficult to establish due to the unique nature of ICBM support, but large-scale defense engineering contracts often run into tens or hundreds of millions of dollars annually.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the highly specialized and critical nature of ICBM ground subsystem support, it is likely that the prime contractor, Northrop Grumman, possesses unique capabilities. However, opportunities for small businesses may exist further down the subcontracting chain, depending on the specific technical requirements and the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force's contracting and program management offices. Accountability measures are built into the Cost Plus Fixed Fee structure, which includes defined profit margins and requires detailed cost reporting. Transparency is generally maintained through contract reporting mechanisms, though specific operational details may be classified. The Inspector General's office of the Department of Defense would have jurisdiction for audits and investigations into fraud, waste, or abuse.

Related Government Programs

ICBM Sustainment Programs
Aerospace Engineering Services
Strategic Weapons Systems Support
Defense Infrastructure Maintenance
Northrop Grumman Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost growth.
Aging infrastructure of ICBM ground systems presents inherent technical and sustainment challenges.
Reliance on a single prime contractor for critical national security systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GROUND SUBSYSTEM SUPPORT CONTRACT, ICBM GROUND DIVISION GENERAL SUSTAINMENT ENGINEERING SERVICES, AWARD OF ORDERING PERIOD 4

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 Air Force).

What is the total obligated amount?

The obligated amount is $29.3 million.

What is the period of performance?

Start: 2018-02-01. End: 2019-01-31.

What is Northrop Grumman's track record with similar ICBM sustainment contracts?

Northrop Grumman has a long and extensive history supporting U.S. strategic nuclear forces, including intercontinental ballistic missiles. They are a prime contractor for the Ground Based Strategic Deterrent (GBSD) program, which aims to replace the Minuteman III ICBM. Their involvement spans decades, encompassing various aspects of missile system development, production, sustainment, and modernization. This includes significant work on the Minuteman III program itself, providing sustainment engineering, logistics, and technical support. Their deep integration into the ICBM enterprise suggests a strong track record and established expertise in managing complex, high-stakes defense sustainment contracts like this one.

How does the $29.3 million value compare to previous years of support for this contract or similar services?

The provided data represents a single delivery order for Ordering Period 4, valued at $29.3 million for a 364-day duration. Without historical data for previous ordering periods or comparable contracts for different ICBM ground subsystems, a direct year-over-year or apples-to-apples comparison is challenging. However, the annual value is substantial, reflecting the complexity and criticality of maintaining strategic missile ground infrastructure. Sustaining aging weapon systems often involves significant and consistent investment. To provide a more robust comparison, data on prior ordering periods for this specific contract, or similar sustainment contracts for other ICBM components or other strategic systems, would be necessary.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential cost overruns due to the Cost Plus Fixed Fee (CPFF) structure, technical challenges in sustaining aging ICBM ground systems, and potential supply chain disruptions for specialized components. Mitigation strategies likely involve rigorous cost tracking and oversight by the Air Force, robust engineering analysis to identify and address technical issues proactively, and strong supplier relationship management by Northrop Grumman. The CPFF contract type itself is a risk mitigation tool, allowing for flexibility while capping the contractor's profit, incentivizing efficiency. Furthermore, the contractor's extensive experience with ICBM systems inherently reduces technical and operational risks.

How effective is the current sustainment engineering in ensuring the readiness of the ICBM ground systems?

The effectiveness of the sustainment engineering is directly tied to the operational readiness of the ICBM ground systems, which is a critical national security metric. While specific performance metrics are not detailed in the provided data, the continued award of contracts to Northrop Grumman suggests a perceived effectiveness in meeting the Air Force's requirements. The Air Force relies on these services to maintain the reliability, security, and operational capability of its strategic deterrent. Ongoing performance evaluations, milestone achievements, and the absence of major reported failures in the ground systems would indicate the effectiveness of the engineering support provided under this contract.

What has been the historical spending trend for ICBM ground subsystem support over the last 5-10 years?

Historical spending on ICBM ground subsystem support has been substantial and relatively consistent, reflecting the long-term nature of maintaining strategic nuclear forces. The U.S. Air Force invests billions of dollars annually across the entire ICBM enterprise, encompassing sustainment, modernization, and personnel. Specific figures for 'ground subsystem support' can fluctuate based on modernization programs, infrastructure upgrades, and the lifecycle stage of the Minuteman III fleet. However, it is a multi-billion dollar annual investment area. The trend generally involves significant baseline sustainment costs, augmented by periodic investments in upgrades and replacements, such as the ongoing Ground Based Strategic Deterrent (GBSD) program.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

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 (UEI: 967356127)

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: $29,338,323

Exercised Options: $29,338,323

Current Obligation: $29,264,021

Subaward Activity

Number of Subawards: 147

Total Subaward Amount: $64,789,363

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821415D0001

IDV Type: IDC

Timeline