DoD's JSTARS E-8C Program Support Contract Exceeds $335M with Northrop Grumman
Contract Overview
Contract Amount: $334,980,451 ($335.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-11-01
End Date: 2023-07-31
Contract Duration: 2,098 days
Daily Burn Rate: $159.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: JSTARS E-8C PROGRAM SUPPORT
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $335.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JSTARS E-8C PROGRAM SUPPORT Key points: 1. Significant contract value of over $335 million awarded. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Long contract duration of 2098 days suggests potential for cost overruns. 4. Engineering services sector sees substantial investment. 5. Lack of small business participation noted.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure can incentivize performance but also lead to higher costs if not tightly managed. Benchmarking against similar large-scale defense engineering support contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The 'NOT COMPETED' status indicates a sole-source award, limiting price discovery and potentially leading to higher costs for taxpayers. The rationale for not competing this significant contract needs further scrutiny.
Taxpayer Impact: The lack of competition for a contract of this magnitude likely results in a higher cost to taxpayers than a competitively awarded contract would have.
Public Impact
Taxpayers are funding a large, sole-source contract for critical defense program support. The long duration and cost-plus structure warrant close monitoring for efficiency. Limited visibility into the justification for not competing the contract. Potential for reduced innovation due to lack of competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- No small business participation
Positive Signals
- Supports critical JSTARS E-8C program
- Awarded to established defense contractor
Sector Analysis
This contract falls within the Engineering Services sector, which is crucial for the development and sustainment of complex defense systems like the JSTARS E-8C. Spending in this sector is often high due to the specialized nature of the work and the long lifecycle of defense platforms.
Small Business Impact
The data indicates no small business participation in this contract. For large, sole-source defense contracts, ensuring opportunities for small businesses is often a challenge but remains an important aspect of federal procurement policy.
Oversight & Accountability
The 'NOT COMPETED' status and Cost Plus Award Fee structure necessitate robust oversight from the Defense Contract Management Agency to ensure fair pricing and effective performance, mitigating potential waste.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competitive pressure.
- Cost-plus structure can lead to cost overruns.
- Long contract duration increases risk exposure.
- No small business participation.
- Limited transparency on justification for sole-sourcing.
Tags
engineering-services, department-of-defense, fl, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $335.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JSTARS E-8C PROGRAM SUPPORT
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $335.0 million.
What is the period of performance?
Start: 2017-11-01. End: 2023-07-31.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative competition strategies considered?
The provided data does not detail the justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent needs. However, the lack of competition raises concerns about whether other qualified contractors were overlooked or if the justification was sufficiently rigorous.
How does the Cost Plus Award Fee structure impact the overall cost-effectiveness and risk of this contract compared to fixed-price alternatives?
Cost Plus Award Fee (CPAF) contracts allow the contractor to recover allowable costs plus a fee that is adjusted based on performance against specific criteria. While CPAF can incentivize desired outcomes, it carries inherent risk of cost growth if performance metrics are not tightly controlled or if costs escalate unexpectedly. This contrasts with fixed-price contracts, which shift more cost risk to the contractor but may offer less flexibility for complex, evolving requirements.
What are the key performance indicators (KPIs) used to determine the award fee, and how are they objectively measured to ensure fair taxpayer value?
The specific Key Performance Indicators (KPIs) for the JSTARS E-8C Program Support contract's award fee are not detailed in the provided data. Objective measurement of KPIs is crucial for CPAF contracts to ensure that the awarded fee truly reflects superior performance and provides value for taxpayer money. Without transparency into these metrics and their evaluation, it is difficult to assess the fairness and effectiveness of the fee structure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32902
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $570,660,965
Exercised Options: $335,902,433
Current Obligation: $334,980,451
Actual Outlays: $2,058,274
Subaward Activity
Number of Subawards: 1400
Total Subaward Amount: $691,330,970
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F0960300D0210
IDV Type: IDC
Timeline
Start Date: 2017-11-01
Current End Date: 2023-07-31
Potential End Date: 2023-07-31 00:00:00
Last Modified: 2023-09-19
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