Air Force awards Northrop Grumman $61.4M for Minuteman III propulsion sustainment through 2026

Contract Overview

Contract Amount: $61,386,722 ($61.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-05-04

End Date: 2026-05-05

Contract Duration: 1,827 days

Daily Burn Rate: $33.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: ENGINEERING, SOFTWARE, AND MAINTENANCE SERVICES FOR SUSTAINMENT, MODIFICATION, DEVELOPMENT, TEST AND EVALUATION, PROCUREMENT,PRODUCTION, REPAIR AND REFURBISHMENT OF THE MINUTEMAN III PROPULSION SUBSYSTEM AND RELATED SUPPORT EQUIPMENT.

Place of Performance

Location: CORINNE, BOX ELDER County, UTAH, 84307

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $61.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENGINEERING, SOFTWARE, AND MAINTENANCE SERVICES FOR SUSTAINMENT, MODIFICATION, DEVELOPMENT, TEST AND EVALUATION, PROCUREMENT,PRODUCTION, REPAIR AND REFURBISHMENT OF THE MINUTEMAN III PROPULSION SUBSYSTEM AND RELATED SUPPORT EQUIPMENT. Key points: 1. This contract focuses on critical sustainment and development for the Minuteman III missile's propulsion subsystem. 2. Northrop Grumman is the sole provider, indicating a lack of direct competition for this specific contract. 3. The contract's 'not competed' status and sole-source nature raise potential concerns about price discovery and value. 4. The sector is Defense, specifically focusing on critical missile systems engineering and maintenance.

Value Assessment

Rating: questionable

The contract type is Cost Plus Award Fee, which can lead to higher costs if not managed carefully. Benchmarking is difficult without more detailed cost breakdowns, but the total award value for a 5-year period suggests a significant investment in a specialized area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to the specialized nature of Minuteman III propulsion systems and Northrop Grumman's established role. This limits price discovery and may result in higher costs than a competitive environment.

Taxpayer Impact: Taxpayer funds are being used for a critical but non-competed defense contract, necessitating close oversight to ensure value for money.

Public Impact

Ensures the continued operational readiness of the Minuteman III intercontinental ballistic missile system. Supports national security by maintaining a key component of the U.S. nuclear triad. Provides specialized engineering, software, and maintenance services for complex defense hardware. The long-term nature of the contract suggests ongoing reliance on this specific system and provider.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Award Fee contract type
Lack of competition
Long-term sustainment contract

Positive Signals

Critical national security asset sustainment
Experienced contractor in a specialized field
Clear period of performance

Sector Analysis

This contract falls within the Defense sector, specifically focusing on aerospace and missile systems engineering and maintenance. Spending in this area is driven by national security requirements and the lifecycle management of aging but critical weapon systems.

Small Business Impact

The data indicates this contract was awarded to Northrop Grumman Systems Corporation and does not mention any small business participation. Given the specialized nature of the work, it is unlikely that small businesses are primary contractors, though they may be subcontractors.

Oversight & Accountability

The 'not competed' status and Cost Plus Award Fee structure warrant close oversight from the Department of the Air Force to ensure cost control and performance. Robust auditing and performance metrics are essential for accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition and potential cost savings.
Cost Plus Award Fee contract type can lead to higher costs if not managed effectively.
Contract duration extends through 2026, requiring sustained oversight.
Specialized nature of the work may limit future contractor options.
Aging infrastructure (Minuteman III) requires ongoing, potentially costly, maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENGINEERING, SOFTWARE, AND MAINTENANCE SERVICES FOR SUSTAINMENT, MODIFICATION, DEVELOPMENT, TEST AND EVALUATION, PROCUREMENT,PRODUCTION, REPAIR AND REFURBISHMENT OF THE MINUTEMAN III PROPULSION SUBSYSTEM AND RELATED SUPPORT EQUIPMENT.

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 $61.4 million.

What is the period of performance?

Start: 2021-05-04. End: 2026-05-05.

What is the justification for awarding this contract sole-source, and what measures are in place to ensure fair pricing?

The sole-source award is likely justified by the highly specialized and proprietary nature of the Minuteman III propulsion subsystem, where Northrop Grumman possesses unique knowledge and capabilities. To ensure fair pricing, the Air Force likely employs detailed cost analysis, independent government cost estimates, and performance-based award fees tied to specific metrics and milestones.

How does the Cost Plus Award Fee structure impact the risk of cost overruns for this critical defense system?

The Cost Plus Award Fee (CPAF) structure allows the contractor to recover allowable costs plus a fee that is subject to a target amount and potentially modified by a performance-based award. While CPAF can incentivize performance, it also carries a risk of cost overruns if the base cost projections are inaccurate or if performance targets are not rigorously defined and monitored. Close government oversight is crucial to manage this risk.

What is the long-term strategy for the Minuteman III propulsion subsystem, and how does this contract align with future modernization or replacement plans?

This contract focuses on sustainment, modification, and development through May 2026, indicating a continued reliance on the Minuteman III system for the foreseeable future. While this contract ensures current readiness, it does not directly address long-term modernization or replacement. Future strategies, such as the Ground Based Strategic Deterrent (GBSD) program, will eventually supersede the Minuteman III, but this contract is essential for maintaining the existing capability until then.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA821420R7000

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 9160 N HWY 83, CORINNE, UT, 84307

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

Financial Breakdown

Contract Ceiling: $311,530,544

Exercised Options: $62,368,988

Current Obligation: $61,386,722

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $24,502,449

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821421D0001

IDV Type: IDC

Timeline