DoD's $142M JSTARS Radar Upgrade Awarded to Northrop Grumman Amidst Sole-Source Concerns

Contract Overview

Contract Amount: $142,040,254 ($142.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2013-10-21

End Date: 2016-12-31

Contract Duration: 1,167 days

Daily Burn Rate: $121.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SYSTEM MODIFICATION TO REPLACE THE RADAR AIRBORNE SIGNAL PROCESSORS (RASP) AND OPERATOR WORK STATIONS FOR THE JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM (JSTARS) PRIME MISSION EQUIPMENT DIMINISHING MANUFACTURING SOURCES (PME DMS) RETROFIT EFFORT.

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $142.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SYSTEM MODIFICATION TO REPLACE THE RADAR AIRBORNE SIGNAL PROCESSORS (RASP) AND OPERATOR WORK STATIONS FOR THE JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM (JSTARS) PRIME MISSION EQUIPMENT DIMINISHING MANUFACTURING SOURCES (PME DMS) RETROFIT EFFORT. Key points: 1. Significant investment in critical defense technology for JSTARS. 2. Sole-source award raises questions about competitive pricing and value. 3. Contract addresses diminishing manufacturing sources for essential radar components. 4. Performance period spans over three years, indicating a substantial project. 5. Focus on upgrading prime mission equipment for enhanced surveillance capabilities. 6. Potential for cost overruns due to lack of competitive pressure. 7. Geographic concentration of work in Florida.

Value Assessment

Rating: questionable

The contract value of approximately $142 million for system modification is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The sole-source nature of this award necessitates a closer examination of cost reasonableness, as the absence of competition can lead to inflated prices. Further analysis would be required to determine if the government received fair value for the services rendered, especially considering the critical nature of the JSTARS platform.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances, such as when only one vendor possesses the necessary proprietary technology or expertise, it significantly limits price discovery and potentially reduces the incentive for cost efficiency. The lack of competition means taxpayers did not benefit from the potential cost savings that a competitive environment could have fostered.

Taxpayer Impact: The sole-source award means taxpayers may have paid a premium compared to what could have been achieved through a competitive process. This limits the government's ability to secure the best possible price for essential defense upgrades.

Public Impact

Enhances the operational capabilities of the Joint Surveillance Target Attack Radar System (JSTARS). Supports critical intelligence, surveillance, and reconnaissance (ISR) missions for the Department of Defense. Ensures the continued functionality of aging radar systems by addressing manufacturing obsolescence. Maintains the technological edge of a key military asset. Impacts the workforce involved in the modification and integration of advanced radar systems. Primarily benefits the U.S. Air Force and its operational readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may lead to higher costs.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for scope creep without robust oversight in a sole-source environment.
Dependency on a single contractor for critical system upgrades.
Long-term sustainment costs are unknown without competitive benchmarking.

Positive Signals

Addresses critical diminishing manufacturing sources, ensuring system longevity.
Northrop Grumman is a major defense contractor with extensive experience.
Focus on upgrading essential prime mission equipment for a vital platform.
Contract aims to maintain and improve the JSTARS' operational effectiveness.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The JSTARS program is a significant component of military intelligence, surveillance, and reconnaissance capabilities. Spending in this area is critical for maintaining national security and technological superiority. Comparable spending benchmarks would typically involve other major platform upgrades or system modifications within the defense industry, where costs can range widely based on complexity and technology.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the information provided. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal. However, Northrop Grumman may engage small businesses as subcontractors, but this is not explicitly detailed. Further investigation into subcontracting plans would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contract compliance and performance. Given the sole-source nature, robust oversight is crucial to monitor costs, schedule, and technical performance. Transparency is limited by the non-competitive award, making it harder for the public to assess value. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

JSTARS Program
Airborne Radar Systems
Defense Manufacturing
Mission Equipment Modernization
Sole-Source Procurements
Northrop Grumman Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Diminishing Manufacturing Sources (DMS) issues
Critical defense system upgrade

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $142.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SYSTEM MODIFICATION TO REPLACE THE RADAR AIRBORNE SIGNAL PROCESSORS (RASP) AND OPERATOR WORK STATIONS FOR THE JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM (JSTARS) PRIME MISSION EQUIPMENT DIMINISHING MANUFACTURING SOURCES (PME DMS) RETROFIT EFFORT.

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 $142.0 million.

What is the period of performance?

Start: 2013-10-21. End: 2016-12-31.

What is Northrop Grumman's track record with JSTARS or similar complex radar system upgrades?

Northrop Grumman Systems Corporation has a long history as a major defense contractor involved in various complex aerospace and defense programs, including radar systems. They have been a key player in the JSTARS program for many years, responsible for its development and sustainment. Their experience with integrating and modifying sophisticated airborne systems is extensive. However, specific details on past performance related to 'diminishing manufacturing sources' retrofits for radar systems, particularly concerning cost and schedule adherence on sole-source awards, would require a deeper dive into contract performance reports and historical data. Generally, their track record is characterized by significant technical capability but, like many large defense firms, can face challenges with cost overruns and schedule delays on large, complex projects.

How does the $142 million cost compare to similar radar system modification contracts?

Benchmarking the $142 million cost for this specific JSTARS radar system modification is challenging due to the sole-source nature of the award and the unique aspects of addressing 'diminishing manufacturing sources' (DMS) for prime mission equipment. Typically, competitive procurements for similar radar upgrades or modifications on large platforms can vary significantly, ranging from tens of millions to hundreds of millions of dollars, depending on the scope, technology involved, and number of platforms. Without competitive bids, it's difficult to ascertain if this price represents fair market value. A comparison would ideally involve analyzing contracts for DMS solutions on other airborne radar systems or major ISR platforms, looking at cost per unit, labor hours, and material costs, adjusted for inflation and technological complexity. The absence of such comparative data makes a definitive value assessment difficult.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract are centered around cost and performance. Firstly, the lack of competition significantly increases the risk of paying a premium price, as there is no market pressure to drive down costs. This can lead to cost overruns and reduced value for taxpayer money. Secondly, sole-source contracts can sometimes lead to complacency in performance, as the contractor faces no immediate threat of losing future business to competitors. This could potentially impact the quality of work or adherence to schedule. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch providers or technologies in the future. Finally, without competitive benchmarking, assessing the true cost-effectiveness and identifying potential inefficiencies becomes more challenging for the government.

How effective is the JSTARS platform, and how does this upgrade contribute to its effectiveness?

The JSTARS (Joint Surveillance Target Attack Radar System) platform is a crucial component of U.S. military intelligence, surveillance, and reconnaissance (ISR) capabilities. It provides battlefield commanders with near real-time imagery of enemy forces, troop movements, and ground activity, enabling precise targeting and situational awareness. This contract addresses 'diminishing manufacturing sources' (DMS) for the radar's prime mission equipment and operator workstations. By retrofitting these components, the upgrade ensures the continued operational readiness and reliability of the JSTARS radar system, preventing obsolescence-related failures. This directly contributes to maintaining the platform's effectiveness in supporting ground and air operations, ensuring it can continue to provide vital intelligence in current and future operational environments.

What has been the historical spending trend for JSTARS radar system modifications or upgrades?

Historical spending on the JSTARS program, including radar system modifications and upgrades, has been substantial over its lifecycle. The platform has undergone numerous upgrades and sustainment efforts since its inception. Specific spending trends for radar system modifications, particularly those addressing DMS issues, would require detailed analysis of historical contract awards for the JSTARS program. Generally, such upgrades are costly due to the complexity of airborne systems and the need to maintain operational readiness. Spending often fluctuates based on modernization priorities, technological advancements, and the aging of existing components. The $142 million awarded here represents a significant investment within a specific period for a critical modernization effort, but it should be viewed within the broader context of the program's long-term sustainment and upgrade costs.

Are there any alternative platforms or technologies that could fulfill the JSTARS mission, and how does this contract relate to those alternatives?

The JSTARS platform, while aging, remains a unique and vital asset for its specific type of wide-area surveillance and moving target indication. However, the Department of Defense is exploring and developing alternative and complementary ISR capabilities. These include advanced satellite-based sensors, unmanned aerial systems (UAS) with sophisticated radar payloads, and potentially network-centric approaches that fuse data from multiple sources. This contract focuses on sustaining the current JSTARS capability by addressing obsolescence, rather than replacing the platform or its core technology. It ensures that the existing investment in JSTARS remains viable while the military evaluates and integrates newer, potentially more flexible or cost-effective ISR solutions for the future. The decision to sole-source this upgrade suggests a continued reliance on the JSTARS platform in the near to medium term.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904

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

Financial Breakdown

Contract Ceiling: $160,510,010

Exercised Options: $155,115,996

Current Obligation: $142,040,254

Subaward Activity

Number of Subawards: 208

Total Subaward Amount: $143,192,566

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873014D0002

IDV Type: IDC

Timeline