DoD's $27M Northrop Grumman Contract for Advanced Microelectronic Solutions Shows Strong Competition

Contract Overview

Contract Amount: $27,036,115 ($27.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-10

End Date: 2028-03-31

Contract Duration: 1,298 days

Daily Burn Rate: $20.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR AIRCRAFT ANTENNAS

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $27.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR AIRCRAFT ANTENNAS Key points: 1. Contract awarded via full and open competition, suggesting a robust marketplace for these specialized engineering services. 2. The contract's duration of over 1000 days indicates a significant, long-term need for these advanced capabilities. 3. Northrop Grumman's selection implies a strong track record and capability in microelectronics and defense systems. 4. The Cost Plus Fixed Fee (CPFF) contract type allows for flexibility while managing contractor profit. 5. Focus on aircraft antenna microelectronics highlights a critical niche within aerospace and defense technology. 6. The contract is managed by the Defense Microelectronics Activity, indicating specialized oversight for sensitive technologies.

Value Assessment

Rating: good

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns and comparable project data. However, the $27 million award over approximately 3.5 years for specialized microelectronic solutions suggests a potentially reasonable investment for advanced defense capabilities. The CPFF structure, while allowing for cost flexibility, requires diligent oversight to ensure costs remain aligned with the fixed fee. Further analysis would benefit from comparing the per-unit cost of specific microelectronic components or development hours against industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited and evaluated. This approach typically fosters a competitive environment, driving better pricing and innovation. The presence of multiple bidders, though not explicitly detailed, is implied by the competition type. This suggests that the government had a range of options to choose from, potentially leading to a more favorable outcome for taxpayers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a level playing field for contractors, which can lead to more competitive pricing and a wider array of innovative solutions.

Public Impact

The primary beneficiaries are the Department of Defense and its aviation platforms, which will receive advanced microelectronic capabilities for aircraft antennas. This contract delivers critical engineering services focused on enhancing the performance and reliability of airborne electronic systems. The geographic impact is primarily within the defense industrial base, potentially involving specialized manufacturing and R&D facilities. Workforce implications include the employment of highly skilled engineers and technicians in the microelectronics and aerospace sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed tightly.
Reliance on a single large contractor like Northrop Grumman could limit future competition for follow-on work.
The specialized nature of microelectronics may present supply chain risks or dependencies.

Positive Signals

Awarded through full and open competition, indicating a healthy market and potential for competitive pricing.
The contract addresses a critical technological need for advanced aircraft antenna capabilities.
Northrop Grumman is a well-established defense contractor with proven expertise in relevant fields.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on advanced microelectronics for defense applications. The aerospace and defense industry heavily relies on specialized engineering firms for cutting-edge technology development. Spending in this area is crucial for maintaining technological superiority. Comparable spending benchmarks would typically involve R&D contracts for advanced materials, integrated circuits, and specialized electronic systems within the defense sector, often running into tens or hundreds of millions of dollars for complex projects.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized areas of microelectronics manufacturing or component supply. The extent of small business subcontracting will depend on Northrop Grumman's strategy and the specific requirements of the contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Microelectronics Activity (DMEA) and relevant Department of Defense contracting officers. The CPFF structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee is justified. Transparency is typically maintained through contract reporting requirements and potential audits. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Advanced Technology Support Program (ATSP)
Defense Microelectronics Activity (DMEA) Contracts
Aerospace Engineering Services
Aircraft Antenna Development
Microelectronics Research and Development

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Reliance on a single large prime contractor.
Need for stringent technical oversight due to specialized nature of microelectronics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRED PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR AIRCRAFT ANTENNAS

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 Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2024-09-10. End: 2028-03-31.

What is Northrop Grumman's track record with similar DoD microelectronics contracts?

Northrop Grumman has a long history of supporting the Department of Defense across various technological domains, including advanced electronics and aerospace systems. While specific details on prior microelectronics contracts for aircraft antennas are not provided in this data snippet, the company is a major prime contractor known for its capabilities in areas such as radar, electronic warfare, and integrated avionics. Their extensive experience in complex defense programs suggests a strong foundation for undertaking this contract. Further investigation into their past performance ratings and specific project completions related to microelectronics would provide a more granular assessment of their suitability and historical success.

How does the $27 million value compare to similar microelectronics development contracts?

Directly comparing the $27 million value requires access to a database of similar contracts, including their scope, duration, and specific technological deliverables. However, for specialized engineering services in advanced microelectronics for defense applications, $27 million over approximately 3.5 years (1298 days) appears to be within a reasonable range. Contracts for developing cutting-edge technologies, especially those with high performance requirements and stringent testing protocols like those for military aircraft, often involve significant investment. Factors such as the complexity of the microelectronic solutions, the level of customization required, and the specific performance metrics targeted would influence the overall cost. Without more granular data on comparable projects, it's difficult to definitively benchmark the value, but the amount reflects the specialized and critical nature of the work.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks associated with a CPFF contract involve potential cost overruns and the contractor's incentive to control expenses. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses allowable costs. If costs escalate beyond initial estimates due to unforeseen technical challenges, scope creep, or inefficient management, the total expenditure could exceed projections. Conversely, the contractor might be incentivized to minimize costs to protect their fixed fee, potentially impacting quality or schedule if not carefully monitored. Robust government oversight, clear performance metrics, and diligent cost tracking are essential to mitigate these risks and ensure value for money.

How effective is the Defense Microelectronics Activity (DMEA) in overseeing such specialized contracts?

The Defense Microelectronics Activity (DMEA) is specifically chartered to address the unique challenges and requirements of microelectronics for national security. Its mission includes providing trusted microelectronics solutions and services to the DoD. As a specialized entity, DMEA possesses the technical expertise necessary to effectively oversee contracts involving advanced microelectronic capabilities, such as this one for aircraft antennas. Their focus on this niche area suggests a higher likelihood of understanding the technical intricacies, potential risks, and performance benchmarks relevant to the contract. Their oversight mechanisms are designed to ensure that the acquired technologies meet stringent defense standards and provide a reliable capability.

What is the historical spending trend for microelectronics engineering services within the DoD?

Historical spending trends for microelectronics engineering services within the DoD have generally shown a consistent and often increasing demand, driven by the need for advanced capabilities in areas like artificial intelligence, secure communications, and enhanced sensor systems. The complexity and miniaturization of electronic components are constantly evolving, requiring continuous investment in R&D and specialized engineering support. While specific figures for 'microelectronics engineering services' can vary based on categorization, the overall defense budget allocation towards electronics, avionics, and related technologies represents billions of dollars annually. Contracts like this one, focused on critical components like aircraft antennas, are part of this broader strategic investment in maintaining technological superiority.

What are the implications of this contract being awarded in Oklahoma?

The contract's performance location in Oklahoma (sn: OKLAHOMA) suggests a potential economic impact on the state's aerospace and defense industry. This could involve job creation for engineers, technicians, and support staff, as well as business opportunities for local suppliers and service providers. Oklahoma has a notable presence in the aerospace sector, and contracts like this can further bolster its position as a hub for advanced manufacturing and technology development. The specific impact would depend on the extent of local resource utilization by Northrop Grumman and its subcontractors.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090

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: $27,036,115

Exercised Options: $27,036,115

Current Obligation: $27,036,115

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $32,729,770

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0004

IDV Type: IDC

Timeline