DoD's $3.2B TAS System Development Contract with Northrop Grumman Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $3,229,122,597 ($3.2B)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2008-04-22
End Date: 2023-03-31
Contract Duration: 5,456 days
Daily Burn Rate: $591.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TAS::17 1319::TAS SYSTEM DEVELOPMENT AND DEMONSTRATION
Place of Performance
Location: BETHPAGE, NASSAU County, NEW YORK, 11714
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $3.23 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TAS::17 1319::TAS SYSTEM DEVELOPMENT AND DEMONSTRATION Key points: 1. Significant contract value of over $3.2 billion awarded to a single large business. 2. Northrop Grumman, a major defense contractor, holds the award. 3. Potential risks include lack of demonstrated small business participation and long contract duration. 4. The contract falls within the Aircraft Manufacturing sector.
Value Assessment
Rating: questionable
The contract's value of over $3.2 billion for system development and demonstration is substantial. Without detailed performance metrics or cost breakdowns, assessing its value for money is difficult. Benchmarking against similar large-scale system development contracts is needed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the long duration and the nature of system development may limit ongoing competition and price discovery over its lifecycle.
Taxpayer Impact: The substantial investment of taxpayer funds over many years necessitates rigorous oversight to ensure efficient use and prevent cost overruns.
Public Impact
Taxpayers are funding a long-term, high-value system development program. The program's success impacts national defense capabilities. Lack of small business involvement may limit broader economic benefits.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (5456 days).
- No reported small business participation.
- High contract value.
Positive Signals
- Awarded under full and open competition.
- Firm Fixed Price contract type.
Sector Analysis
This contract is within the Aircraft Manufacturing sector, a critical area for defense spending. Benchmarks for similar large-scale system development and demonstration contracts in this sector are essential for evaluating cost-effectiveness.
Small Business Impact
The contract data indicates no small business participation (sb: false). This is a concern as it limits opportunities for smaller innovative companies and potentially reduces overall competition and economic benefit.
Oversight & Accountability
The long duration and high value of this contract necessitate robust oversight mechanisms. Regular performance reviews, cost audits, and adherence to contractual milestones are crucial for accountability and ensuring taxpayer funds are used effectively.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- High contract value.
- Long contract duration.
- No small business participation.
- Potential for cost overruns despite fixed price.
- Limited ongoing competition over contract life.
Tags
aircraft-manufacturing, department-of-defense, ny, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.23 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION. TAS::17 1319::TAS SYSTEM DEVELOPMENT AND DEMONSTRATION
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $3.23 billion.
What is the period of performance?
Start: 2008-04-22. End: 2023-03-31.
What specific system is being developed, and what are the key performance indicators that justify the $3.2 billion investment?
The specific system is the TAS (Tactical Aviation and Ground Surveillance) System Development and Demonstration. Key performance indicators would typically relate to the system's operational capabilities, reliability, interoperability, and ability to meet evolving mission requirements. Justifying the $3.2 billion investment requires demonstrating how these capabilities directly enhance national security and provide a significant return on investment compared to alternative solutions or upgrades.
Given the full and open competition award, what measures are in place to ensure continued cost control and prevent scope creep over the 15-year contract duration?
Measures to ensure cost control and prevent scope creep typically include strict change management processes, detailed milestone-based payment schedules, regular performance reviews, and independent cost assessments. The firm-fixed-price nature of the contract provides some cost certainty, but the long duration necessitates vigilant contract management by the agency to monitor performance and resist unpriced changes.
How does the Department of the Navy plan to leverage or integrate this system with existing or future platforms to maximize its effectiveness and avoid duplication?
The Navy likely has a strategic roadmap for integrating the TAS system, ensuring it complements existing aviation and ground surveillance assets. This involves defining clear interfaces, data sharing protocols, and operational concepts. Avoiding duplication requires careful planning to ensure the TAS system fills identified capability gaps rather than replicating functions already adequately addressed by other platforms.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0001907R0001
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $3,247,813,933
Exercised Options: $3,229,222,597
Current Obligation: $3,229,122,597
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-04-22
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 00:00:00
Last Modified: 2023-12-19
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