Ending the week in a flurry of paperwork, the U.S. Department of Defense announced 14 separate contract awards Friday, worth approximately $1.34 billion in total. One of the bigger awards handed out -- the second biggest contract awards, in fact -- went to defense contracting heavyweight Northrop Grumman (NYSE:NOC).
Northrop won a $152.8 million contract "modification" for its Aerospace Systems division, which was actually a total of 12 modifications to Northrop's National Polar Orbiting Operational Environmental Satellite System, or NPOESS, contract, which was canceled in part last year. These modifications consist of requests for equitable adjustment, change order proposals, and engineering change proposals that all aim to ensure that Northrop receives fair and equitable treatment under the project wind-down. The upshot of these changes is that Northrop will get its fixed fee increased by $15.7 million, and the total estimated value of the contract raised by $137.1 million -- $152.8 million total.
NPOESS was a planned next-generation satellite system for monitoring Earth's weather, land, oceans, atmosphere, and near-space environment, jointly developed by the Department of Defense, NASA, and the National Oceanic and Atmospheric Administration, or NOAA. In February 2010, NPOESS was split into two sets of polar-orbiting satellites -- then one of these sets, the DoD-run Defense Weather Satellite System, was shut down two years later. The NOAA/NASA system, dubbed the Joint Polar Satellite System, survives.
Today's contract modification is intended to square accounts and ensure that Northrop is fairly compensated for the work it did on the DoD system and is still doing on the NOAA/NASA system.