Northrop Grumman awarded $256M for Ballistic Missile Defense International Simulation software maintenance and development
Contract Overview
Contract Amount: $255,963,215 ($256.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2021-03-05
End Date: 2026-03-04
Contract Duration: 1,825 days
Daily Burn Rate: $140.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: HE 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
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35805
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $256.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: HE 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 Key points: 1. Contract focuses on critical simulation and threat modeling software for missile defense. 2. Sole-source award raises questions about potential price efficiencies and market alternatives. 3. Long-term contract duration (5 years) suggests a need for sustained support and development. 4. The contract type (Cost Plus Award Fee) allows for performance-based incentives. 5. Missile Defense Agency relies on this software for strategic planning and training. 6. Geographic location of performance is Alabama, indicating a specific operational hub.
Value Assessment
Rating: fair
The contract value of $256 million over five years for custom computer programming services appears substantial. Benchmarking this against similar complex simulation and modeling contracts is challenging without more specific service details. The Cost Plus Award Fee structure suggests that the final cost could vary based on performance, making a direct price comparison difficult. However, the lack of competition for this sole-source award means there's no direct market price discovery to assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning the Missile Defense Agency did not conduct a competitive bidding process. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates. The absence of competition limits the agency's ability to explore alternative solutions or negotiate based on multiple offers, potentially impacting price discovery.
Taxpayer Impact: For taxpayers, a sole-source award means there is no assurance that the price paid is the lowest achievable. Without competition, the government may not benefit from the cost savings that typically arise from a competitive procurement process.
Public Impact
The primary beneficiaries are the Department of Defense and the Missile Defense Agency, who receive essential software for strategic missile defense operations. Services delivered include the maintenance, sustainment, and development of the Ballistic Missile Defense International Simulation (BMD I-SIM), Missile Defense Space Warning Tool (MDST), and Threat Modeling Center (TMC) production software. The geographic impact is primarily within Alabama, where the contractor Northrop Grumman Systems Corporation will perform the work. Workforce implications include the need for specialized software developers, engineers, and cybersecurity professionals to support and advance these complex systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-plus contract type can lead to cost overruns if not managed tightly.
- Long contract duration may reduce flexibility to adopt newer technologies if they emerge.
- Reliance on a single contractor for critical simulation software poses a potential single point of failure risk.
Positive Signals
- Contractor has a long-standing relationship with the agency for these systems.
- Cost Plus Award Fee structure incentivizes performance and successful outcomes.
- Focus on maintenance and sustainment ensures continuity of critical operations.
- Development aspect allows for modernization and adaptation of simulation capabilities.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The market for defense simulation and modeling software is highly specialized, often dominated by a few large contractors with the necessary security clearances and technical expertise. Spending in this area is critical for national security, supporting the development and testing of advanced defense systems. Comparable spending benchmarks are difficult to establish due to the unique nature of missile defense simulations.
Small Business Impact
This contract does not appear to include a small business set-aside, as indicated by 'sb': false. Northrop Grumman Systems Corporation is a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The absence of a set-aside suggests that opportunities for small businesses may be limited to subcontracting roles, if any, rather than direct prime contract awards.
Oversight & Accountability
Oversight for this contract will likely be managed by the Missile Defense Agency, with potential involvement from the Department of Defense's Inspector General. The Cost Plus Award Fee structure necessitates robust oversight to ensure performance targets are met and costs are justified. Transparency may be limited due to the sensitive nature of missile defense systems and the sole-source procurement method.
Related Government Programs
- Ballistic Missile Defense System
- Missile Defense Agency Programs
- Advanced Simulation and Modeling
- Department of Defense IT Services
- Northrop Grumman Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus contract type
- Critical defense system software
Tags
it, defense, missile-defense-agency, northrop-grumman-systems-corporation, custom-computer-programming-services, sole-source, cost-plus-award-fee, software-maintenance, software-development, simulation-software, alabama, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $256.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. HE 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
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 $256.0 million.
What is the period of performance?
Start: 2021-03-05. End: 2026-03-04.
What is Northrop Grumman's track record with the Ballistic Missile Defense International Simulation (BMD I-SIM) and related systems?
Northrop Grumman Systems Corporation has a significant history of developing and maintaining complex defense systems for the U.S. military. Their involvement with the Ballistic Missile Defense International Simulation (BMD I-SIM), Missile Defense Space Warning Tool (MDST), and Threat Modeling Center (TMC) likely spans many years, building institutional knowledge and technical expertise. Given this is a sole-source award for maintenance, sustainment, and development, it implies a successful prior performance history and a deep understanding of these critical, specialized software systems. The agency's decision to award this follow-on task order without competition suggests confidence in Northrop Grumman's ability to continue delivering reliable and effective support for these vital missile defense tools.
How does the $256 million contract value compare to historical spending on these specific simulation systems?
The provided data indicates a total contract value of $256,963,214.71 over a 5-year period (March 5, 2021, to March 4, 2026). To compare this to historical spending, one would need access to prior contract awards for BMD I-SIM, MDST, and TMC. Without that historical data, it's difficult to definitively state if this represents an increase, decrease, or stable level of investment. However, the duration and value suggest a significant and ongoing commitment by the Missile Defense Agency to these simulation capabilities, reflecting their strategic importance in missile defense planning and operations.
What are the primary risks associated with a sole-source award for critical defense simulation software?
The primary risks associated with a sole-source award for critical defense simulation software like the BMD I-SIM suite include potential for inflated pricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of alternative solutions if the current contractor fails to perform or encounters significant issues. Taxpayers may bear a higher cost than in a competitive environment. Furthermore, the government becomes heavily reliant on a single entity, creating a potential vulnerability if that entity faces financial distress, operational challenges, or strategic shifts. This reliance necessitates stringent oversight and performance management to mitigate these risks.
How effective is the Cost Plus Award Fee (CPAF) contract type in ensuring program effectiveness for simulation software?
The Cost Plus Award Fee (CPAF) contract type aims to balance cost control with performance incentives, making it potentially effective for complex, long-term development and sustainment programs like missile defense simulations. Under CPAF, the contractor is reimbursed for allowable costs plus a fee that is composed of a base amount and an award amount. The award amount is determined by the government based on the contractor's achievement of specific performance objectives. This structure incentivizes the contractor to meet or exceed performance standards, which can enhance program effectiveness. However, effective implementation requires clearly defined performance metrics and diligent government oversight to ensure the award fee is fairly and accurately assessed, preventing cost overruns while driving desired outcomes.
What are the potential implications of this contract on the broader missile defense technology ecosystem?
This contract, by focusing on the sustainment and development of core simulation tools, reinforces the existing technological infrastructure for missile defense. It ensures the continued availability and potential enhancement of critical modeling capabilities. However, as a sole-source award to a large incumbent, it might also present barriers to entry for smaller, innovative companies seeking to offer alternative or next-generation simulation solutions. The long-term nature and significant value suggest that the current technological approach will remain dominant for the contract's duration, potentially shaping the direction of future investments and research within the missile defense simulation domain.
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: $306,855,757
Exercised Options: $306,855,757
Current Obligation: $255,963,215
Actual Outlays: $117,732,074
Subaward Activity
Number of Subawards: 485
Total Subaward Amount: $245,539,029
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: 2021-03-05
Current End Date: 2026-03-04
Potential End Date: 2026-03-04 00:00:00
Last Modified: 2025-12-18
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