DoD awards Northrop Grumman $291M for LAIRCM hardware, citing sole-source justification
Contract Overview
Contract Amount: $291,144,852 ($291.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2015-09-16
End Date: 2019-04-25
Contract Duration: 1,317 days
Daily Burn Rate: $221.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DON LAIRCM HARDWARE AND FPGA CARD RESPIN
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $291.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DON LAIRCM HARDWARE AND FPGA CARD RESPIN Key points: 1. Significant contract value of $291M awarded to a single large defense contractor. 2. Sole-source award raises questions about competition and potential price inflation. 3. Focus on critical aircraft defense systems highlights national security importance. 4. The contract spans nearly four years, indicating a substantial, long-term need.
Value Assessment
Rating: fair
The contract value of $291M for LAIRCM hardware is substantial. Without specific per-unit cost data or benchmarks for similar systems, it's difficult to definitively assess pricing efficiency. The firm fixed-price structure offers some cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process. The justification for sole-source is critical for understanding the rationale.
Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers, as market forces are not leveraged to ensure the best possible price.
Public Impact
Enhances survivability of military aircraft against missile threats. Supports ongoing defense modernization efforts within the Department of Defense. Ensures continued operational readiness of critical defense platforms. Potential for follow-on contracts or upgrades, impacting future spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Lack of detailed cost breakdown for assessment.
- Long contract duration could mask cost overruns.
Positive Signals
- Addresses critical national security need.
- Firm fixed-price contract provides cost certainty.
- Awarded to established defense contractor with relevant expertise.
Sector Analysis
This contract falls within the Defense sector, specifically related to electronic warfare and aircraft survivability systems. Spending in this area is often driven by evolving threats and technological advancements, with significant investment required for advanced defense hardware.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large defense contractor. There is no indication of small business participation in this specific award, which is common for large, sole-source contracts involving specialized defense technology.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Oversight is crucial for sole-source awards to ensure fair pricing and delivery of required capabilities.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Lack of transparency on justification for sole-source.
- Potential for cost overruns on long-term contract.
- No clear indication of small business subcontracting.
Tags
search-detection-navigation-guidance-aer, department-of-defense, il, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $291.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DON LAIRCM HARDWARE AND FPGA CARD RESPIN
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 $291.1 million.
What is the period of performance?
Start: 2015-09-16. End: 2019-04-25.
What was the specific justification provided for awarding this contract on a sole-source basis, and does it align with federal procurement regulations for such exceptions?
The specific justification for the sole-source award is not detailed in the provided data. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or urgent needs. A thorough review would be needed to confirm adherence to FAR Part 6 requirements and ensure no viable competitive alternatives were overlooked.
How does the per-unit cost of the FPGA card respin compare to previous iterations or similar components from other manufacturers, if available?
Without access to specific per-unit cost data for the FPGA card respin and comparative pricing from other manufacturers or previous contract data, a direct benchmark is not possible. The firm fixed-price nature of the contract provides some cost control, but the absence of competitive bidding makes it challenging to ascertain if the price reflects optimal market value or if there's potential for cost savings through competition.
What are the key performance metrics and delivery milestones for this contract, and how is Northrop Grumman's performance being tracked to ensure effective delivery of the LAIRCM hardware?
The provided data does not detail the specific key performance metrics or delivery milestones for this contract. However, as a definitive contract managed by DCMA, it is expected that performance is monitored against established schedules and technical specifications. Effective oversight would involve regular progress reviews, quality assurance checks, and adherence to the terms of the firm fixed-price agreement to ensure timely and compliant delivery.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $291,144,852
Exercised Options: $291,144,852
Current Obligation: $291,144,852
Subaward Activity
Number of Subawards: 5407
Total Subaward Amount: $4,468,545,055
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-09-16
Current End Date: 2019-04-25
Potential End Date: 2019-04-25 00:00:00
Last Modified: 2020-06-23
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