Northrop Grumman awarded $126.8M for Ballistic Missile Defense software maintenance and development
Contract Overview
Contract Amount: $126,804,617 ($126.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-03-05
End Date: 2021-08-30
Contract Duration: 1,274 days
Daily Burn Rate: $99.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: THE PURPOSE OF THE SWDC DE TASK ORDER IS TO MAINTAIN, SUSTAIN, AND DEVELOP THE BALLISTIC MISSILE DEFENSE INTERNATIONAL SIMULATION (BMD I-SIM), MISSILE DEFENSE SPACE WARNING TOOL (MDST), AND THREAT MODELING CENTER (TMC) PRODUCTION SOFTWARE APPLICATIONS AND TO SUPPORT THE CUSTOMERS AND USERS THROUGH EVENT SUPPORT, TRAINING, AND SERVICE DEVELOPMENT ACTIVITIES. IGF::OT::IGF
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35805
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $126.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE PURPOSE OF THE SWDC DE TASK ORDER IS TO MAINTAIN, SUSTAIN, AND DEVELOP THE BALLISTIC MISSILE DEFENSE INTERNATIONAL SIMULATION (BMD I-SIM), MISSILE DEFENSE SPACE WARNING TOOL (MDST), AND THREAT MODELING CENTER (TMC) PRODUCTION SOFTWARE APPLICATIONS AND TO SUPPORT THE CUSTOMERS… Key points: 1. Contract focuses on critical simulation and threat modeling software for missile defense. 2. Sustaining and developing these applications ensures continued operational readiness. 3. The contract value represents a significant investment in advanced defense capabilities. 4. Northrop Grumman has a substantial role in maintaining these specialized systems. 5. The duration of the contract spans over three years, indicating long-term support needs. 6. The 'Cost Plus Award Fee' structure incentivizes performance but requires careful oversight.
Value Assessment
Rating: fair
The contract value of $126.8 million over approximately three years for custom computer programming services is substantial. Benchmarking this against similar complex software development and maintenance contracts is challenging without more specific details on the scope of work and deliverables. However, the 'Cost Plus Award Fee' (CPAF) contract type suggests that the government aims to control costs while incentivizing high performance, which can be a reasonable approach for complex, evolving systems. The absence of a clear per-unit cost makes direct value-for-money assessment difficult, but the criticality of the software implies a high baseline value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or has been the incumbent provider for a critical system, making a competitive process impractical or detrimental to program continuity. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bidders had vied for the contract. The justification for a sole-source award would need to be robust to ensure fair pricing and value.
Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, potentially resulting in a higher overall cost for these essential missile defense systems.
Public Impact
The primary beneficiaries are the U.S. Department of Defense and its allies relying on advanced missile defense capabilities. Services delivered include the maintenance, sustainment, and development of critical simulation and threat modeling software. Geographic impact is national, supporting strategic defense initiatives. Workforce implications include specialized software engineers and analysts required for these complex systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- Cost Plus Award Fee contracts require diligent oversight to ensure costs are reasonable and performance is optimized.
- The long-term reliance on a single contractor for critical software may create vendor lock-in.
- Lack of competition could reduce incentives for innovation if not managed through award fees.
Positive Signals
- Contract supports critical national security infrastructure (Ballistic Missile Defense).
- Northrop Grumman's established role suggests deep expertise in this specialized domain.
- The CPAF structure, if managed well, can incentivize high performance and quality.
- Long contract duration indicates a stable, ongoing need for these vital services.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The market for defense-related software development and sustainment is highly specialized, often dominated by large defense contractors with proven track records and security clearances. The Missile Defense Agency (MDA) operates in a niche but critical segment of the defense IT market, where the complexity and sensitivity of the systems command significant investment. Comparable spending benchmarks would likely be found within other large-scale, mission-critical software sustainment programs for government agencies.
Small Business Impact
This contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements for small businesses in the provided data. The prime contractor, Northrop Grumman, is a large aerospace and defense company. The nature of the specialized software development and maintenance may limit opportunities for broad small business participation, unless specific components or services are outsourced to smaller, specialized firms. Further analysis would be needed to determine if subcontracting plans were in place.
Oversight & Accountability
The 'Cost Plus Award Fee' (CPAF) structure implies oversight through performance metrics and award fee evaluations. The Department of Defense and the Missile Defense Agency would be responsible for monitoring contractor performance, costs, and adherence to contract terms. Inspector General jurisdiction would apply to investigate potential fraud, waste, or abuse. Transparency is often limited in sole-source defense contracts, but contract awards and basic details are typically reported. Robust oversight is crucial to ensure the government receives value for its investment, especially given the non-competitive nature of the award.
Related Government Programs
- Ballistic Missile Defense System
- Missile Defense Agency Programs
- Aerospace and Defense IT Services
- Custom Software Development
- Government Simulation and Modeling Software
Risk Flags
- Sole-source award
- Cost Plus Award Fee contract type
- Critical national security software sustainment
- Long contract duration
Tags
it, defense, missile-defense-agency, northrop-grumman, custom-computer-programming-services, not-competed, delivery-order, cost-plus-award-fee, alabama, large-business, software-development, software-maintenance
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $126.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE PURPOSE OF THE SWDC DE TASK ORDER IS TO MAINTAIN, SUSTAIN, AND DEVELOP THE BALLISTIC MISSILE DEFENSE INTERNATIONAL SIMULATION (BMD I-SIM), MISSILE DEFENSE SPACE WARNING TOOL (MDST), AND THREAT MODELING CENTER (TMC) PRODUCTION SOFTWARE APPLICATIONS AND TO SUPPORT THE CUSTOMERS AND USERS THROUGH EVENT SUPPORT, TRAINING, AND SERVICE DEVELOPMENT ACTIVITIES. IGF::OT::IGF
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 $126.8 million.
What is the period of performance?
Start: 2018-03-05. End: 2021-08-30.
What is Northrop Grumman's track record with the Missile Defense Agency and similar complex software sustainment contracts?
Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in aerospace, defense, and information systems. They have a long-standing relationship with the Missile Defense Agency (MDA), often serving as a prime contractor on various complex programs, including missile defense systems, radar technology, and command and control systems. Their track record typically involves large-scale, mission-critical projects requiring high levels of technical expertise and security clearance. For software sustainment contracts, their experience often includes maintaining and upgrading legacy systems while integrating new functionalities, similar to the requirements of the BMD I-SIM, MDST, and TMC software. While specific performance metrics for this particular contract are not detailed, Northrop Grumman's overall profile suggests a capacity to handle such demanding technical requirements. However, like any large contractor, they have faced scrutiny on specific contracts regarding cost overruns or performance issues in the past, necessitating diligent government oversight.
How does the $126.8 million contract value compare to similar custom computer programming services for defense applications?
The $126.8 million contract value for custom computer programming services over approximately three years (March 2018 - August 2021) is substantial, reflecting the complexity and criticality of maintaining and developing advanced simulation and threat modeling software for ballistic missile defense. Benchmarking this against 'similar' contracts is challenging due to the highly specialized nature of the work and the specific systems involved (BMD I-SIM, MDST, TMC). However, large-scale software sustainment and development for defense applications, especially those involving simulation, modeling, and real-time data processing for strategic systems, typically run into tens or hundreds of millions of dollars over multi-year periods. Contracts for developing or maintaining command and control systems, intelligence analysis software, or advanced simulation platforms for other defense agencies often fall within this range. The 'Cost Plus Award Fee' structure also suggests a scope that is difficult to precisely define upfront, contributing to the overall value.
What are the primary risks associated with this sole-source, Cost Plus Award Fee contract?
The primary risks associated with this sole-source, Cost Plus Award Fee (CPAF) contract are multifaceted. Firstly, the sole-source nature eliminates the benefit of price competition, potentially leading to higher costs for the government than if the contract had been competed. This necessitates robust negotiation and oversight to ensure fair pricing. Secondly, CPAF contracts, while designed to incentivize performance, carry inherent risks. If not managed meticulously, the 'cost-plus' component can lead to cost growth if the contractor's spending is not adequately controlled or justified. The 'award fee' portion requires clear, measurable performance metrics; ambiguity or poor definition of these metrics can lead to disputes or ineffective incentives. Furthermore, reliance on a single contractor for critical software sustainment creates a risk of vendor lock-in and potential vulnerabilities if the contractor's capabilities degrade or if they face financial instability. Finally, the complexity of the software itself presents technical risks, including integration challenges, cybersecurity vulnerabilities, and the potential for obsolescence.
How effective is the 'Cost Plus Award Fee' structure likely to be in ensuring value for money on this contract?
The effectiveness of the 'Cost Plus Award Fee' (CPAF) structure in ensuring value for money on this contract hinges heavily on the clarity of performance objectives and the rigor of government oversight. CPAF aims to balance cost control with performance incentives by allowing the contractor to recover allowable costs plus a base fee, with the potential for an additional award fee based on achieving specific performance targets. For complex, evolving systems like missile defense simulations, where defining all requirements upfront is difficult, CPAF can be appropriate. However, its success depends on well-defined, measurable, and achievable award criteria that align with the government's strategic goals. If the criteria are vague or easily met without substantial added value, the award fee may not effectively drive performance. Conversely, if the criteria are too stringent or poorly communicated, it can lead to contractor demotivation or disputes. Diligent program management, regular performance reviews, and transparent communication are essential to maximize the value derived from a CPAF contract.
What are the historical spending patterns for Ballistic Missile Defense software maintenance and development by the Missile Defense Agency?
Historical spending patterns for Ballistic Missile Defense (BMD) software maintenance and development by the Missile Defense Agency (MDA) indicate a consistent and significant investment in these critical capabilities. The MDA's budget is substantial, with a large portion allocated to developing, testing, and sustaining the complex integrated systems required for missile defense. Software development, simulation, modeling, and system sustainment are perennial high-cost areas due to the advanced technology, rigorous testing requirements, and the need for continuous updates to counter evolving threats. Over the years, the MDA has awarded numerous contracts, often in the hundreds of millions of dollars annually, to prime contractors like Northrop Grumman, Lockheed Martin, and Raytheon for various aspects of BMD programs. These contracts frequently involve long-term sustainment, upgrades to existing platforms, and development of new software functionalities for command and control, threat detection, and engagement systems. The $126.8 million awarded to Northrop Grumman for this specific task order aligns with the general trend of substantial, ongoing investment in BMD software infrastructure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014718R0003
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 213 WYNN DR, HUNTSVILLE, AL, 35805
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $133,657,567
Exercised Options: $132,574,458
Current Obligation: $126,804,617
Actual Outlays: $14,187,580
Subaward Activity
Number of Subawards: 7
Total Subaward Amount: $-788,822
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ014718D0005
IDV Type: IDC
Timeline
Start Date: 2018-03-05
Current End Date: 2021-08-30
Potential End Date: 2021-08-30 00:00:00
Last Modified: 2025-09-30
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