DoD's $26.1M contract for AN/ASQ-230 sensor sustainment awarded to Northrop Grumman without competition

Contract Overview

Contract Amount: $26,143,444 ($26.1M)

Contractor: Northrop Grumman Space & Mission Systems Corp.

Awarding Agency: Department of Defense

Start Date: 2012-04-11

End Date: 2016-09-30

Contract Duration: 1,633 days

Daily Burn Rate: $16.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SUSTAINMENT AN/ASQ-230 SENSOR

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95119

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $26.1 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP. for work described as: SUSTAINMENT AN/ASQ-230 SENSOR Key points: 1. The contract value of $26.1 million over approximately 4 years suggests a significant investment in maintaining critical defense systems. 2. Awarded as a sole-source contract, it raises questions about the availability of competitive alternatives and potential cost efficiencies. 3. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector indicates a focus on advanced aerospace technology. 4. The cost-plus-fixed-fee contract type implies that costs are reimbursed plus a fixed fee, which can sometimes lead to less cost control than fixed-price contracts. 5. The absence of small business involvement (ss: false, sb: false) suggests this contract did not leverage small business capabilities or set-aside opportunities. 6. The contract duration of 1633 days (approx. 4.5 years) indicates a long-term need for sustainment services.

Value Assessment

Rating: questionable

Benchmarking the value of this $26.1 million contract is challenging without more specific details on the sustainment services provided and the AN/ASQ-230 sensor's criticality. However, the sole-source nature of the award, coupled with a cost-plus-fixed-fee structure, warrants scrutiny. This contract type can incentivize contractors to incur costs, as they are reimbursed, and the fixed fee may not always reflect the most efficient performance. Without competitive bidding, it's difficult to ascertain if Northrop Grumman's pricing represents fair market value or if taxpayers are receiving optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required supplies or services. The lack of competition limits the government's ability to solicit bids from multiple vendors, potentially leading to higher prices and reduced innovation. It suggests that Northrop Grumman may be the sole provider of sustainment for this specific AN/ASQ-230 sensor system, or that the government determined competition was not feasible or in the national interest.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiating favorable terms and ensures that funds are directed to a single provider without exploring potentially more cost-effective options.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the operational readiness of aircraft equipped with the AN/ASQ-230 sensor. The services delivered include the sustainment of critical navigation and guidance systems, vital for mission success and safety. The geographic impact is likely concentrated within military operational areas and maintenance facilities, supporting global defense operations. Workforce implications include the employment of specialized technicians and engineers at Northrop Grumman responsible for sensor maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Cost-plus-fixed-fee contract type may reduce incentives for cost efficiency.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized nature of the system.

Positive Signals

Ensures sustainment of critical defense technology, maintaining operational readiness.
Leverages specialized expertise of Northrop Grumman for a complex system.
Provides a stable, long-term support solution for the AN/ASQ-230 sensor.

Sector Analysis

The contract falls within the aerospace and defense sector, specifically focusing on the manufacturing and sustainment of navigation, guidance, and control systems. This is a highly specialized area characterized by significant research and development, long product lifecycles, and a limited number of prime contractors capable of producing and supporting such advanced technologies. The market size for such specialized components is substantial within the defense industry, with spending often driven by specific platform requirements and national security needs. Comparable spending benchmarks would typically involve other sustainment contracts for complex avionics or sensor systems within the DoD.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by 'ss: false' and 'sb: false'. The sole-source nature of the award further suggests that opportunities for small businesses to participate, either as prime contractors or subcontractors, were likely limited or not pursued. This means the contract did not contribute to the government's small business contracting goals through this specific award, and the broader small business ecosystem in this specialized aerospace manufacturing and sustainment niche may not have directly benefited.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates careful monitoring of incurred costs to ensure they are reasonable and allowable. Transparency regarding the justification for the sole-source award and the specific performance metrics would be key to assessing accountability. Inspector General investigations could be initiated if any irregularities or fraud are suspected.

Related Government Programs

DoD Aircraft Avionics Sustainment
Navigation and Guidance System Maintenance
Aerospace Sensor Manufacturing
Defense Contract Management
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.. SUSTAINMENT AN/ASQ-230 SENSOR

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $26.1 million.

What is the period of performance?

Start: 2012-04-11. End: 2016-09-30.

What is the specific function and criticality of the AN/ASQ-230 sensor system within the Department of Defense's operational capabilities?

The AN/ASQ-230 sensor system is primarily associated with navigation, guidance, and detection functions, crucial for various military platforms, likely including aircraft. Its criticality stems from its role in enabling precise navigation, target acquisition, and situational awareness, which are fundamental to mission success and the safety of personnel. Without detailed system specifications, it's presumed to be a key component in advanced avionics suites, supporting operations that range from reconnaissance and surveillance to combat missions. The sustainment of such a system is vital to ensure continuous operational readiness and to mitigate risks associated with system failures or performance degradation in demanding operational environments.

What was the justification provided for awarding this contract on a sole-source basis to Northrop Grumman?

While the provided data indicates the contract was 'NOT COMPETED' and awarded as 'sole-source,' the specific justification is not detailed. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For a specialized system like the AN/ASQ-230 sensor, Northrop Grumman may possess unique technical expertise, proprietary data, or existing infrastructure essential for its sustainment that other potential contractors lack. The government would have had to formally document and approve this justification, often involving market research to confirm the absence of viable alternatives.

How does the cost-plus-fixed-fee (CPFF) contract type potentially impact cost control and contractor incentives for this sustainment effort?

The Cost-Plus-Fixed-Fee (CPFF) contract type reimburses the contractor (Northrop Grumman) for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government, as the final price is not fixed upfront. While it can be effective for R&D or services where costs are uncertain, it may reduce the contractor's incentive to control costs aggressively, as their profit (the fixed fee) remains constant regardless of cost efficiency. The government's oversight role becomes critical in scrutinizing incurred costs to ensure they are reasonable, allocable, and necessary. Without strong oversight, CPFF contracts can sometimes lead to higher overall expenditures compared to fixed-price arrangements.

What is the historical spending pattern for the sustainment of the AN/ASQ-230 sensor system, and how does this $26.1M contract compare?

The provided data only details this specific contract award from April 2012 to September 2016 for $26.1 million. To assess historical spending patterns, one would need to examine prior contracts for the sustainment of the AN/ASQ-230 sensor, potentially including research and development, initial procurement, and previous sustainment efforts. Without access to that historical data, it's impossible to determine if this $26.1 million award represents an increase, decrease, or stable level of spending for this system's upkeep. A comprehensive analysis would require tracking all related contract actions over the system's lifecycle to identify trends in cost, duration, and contractor performance.

What are the potential risks associated with relying on a single contractor for the sustainment of critical defense technology like the AN/ASQ-230 sensor?

Relying on a single contractor, as in this sole-source award to Northrop Grumman, presents several risks. Firstly, it creates a potential for vendor lock-in, where the government becomes dependent on that specific contractor's capabilities, pricing, and technology roadmap. This dependence can reduce bargaining power and limit flexibility in adopting new technologies or alternative solutions. Secondly, if the contractor experiences financial difficulties, operational disruptions, or decides to exit the market, it could severely impact the sustainment of the critical defense system, potentially leading to operational downtime. Lastly, the lack of competition removes the pressure to innovate and optimize processes, which could lead to less efficient sustainment over time.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 6377 SAN IGNACIO AVE, SAN JOSE, CA, 95119

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,891,734

Exercised Options: $26,181,353

Current Obligation: $26,143,444

Subaward Activity

Number of Subawards: 960

Total Subaward Amount: $217,185,827

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852812D0013

IDV Type: IDC

Timeline