DoD awards Northrop Grumman $614M for radar equipment, exceeding initial estimates by over $200M

Contract Overview

Contract Amount: $162,014,093 ($162.0M)

Contractor: Northrop Grumman Space & Mission Systems Corp.

Awarding Agency: Department of Defense

Start Date: 2003-09-11

End Date: 2005-07-19

Contract Duration: 677 days

Daily Burn Rate: $239.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: 200311!000104!5700!GV65 !ESC/FD !F1962897D0034 !A!N! !N!0089 !20030911!20040910!614227643!004179453!016435559!N!NORTHROP GRUMMAN SPACE & MISSI!1800 GLENN CURTISS DRIVE !CARSON !CA!90746!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!+000171904350!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!2!003!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: CARSON, LOS ANGELES County, CALIFORNIA, 90746, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $162.0 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP. for work described as: 200311!000104!5700!GV65 !ESC/FD !F1962897D0034 !A!N! !N!0089 !20030911!20040910!614227643!004179453!016435559!N!NORTHROP GRUMMAN SPACE & MISSI!1800 GLENN CURTISS DRIVE !CARSON !CA!90746!11530!037!06!CARSON !LOS A… Key points: 1. Contract value significantly surpassed initial projections, indicating potential cost overruns or scope expansion. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. Northrop Grumman's extensive experience in aerospace and defense likely contributed to their win. 4. The contract duration of 677 days points to a substantial, multi-year effort. 5. The specific radar equipment type is classified, limiting public understanding of its application and necessity. 6. The significant dollar amount warrants scrutiny regarding value for money and performance metrics.

Value Assessment

Rating: questionable

The final award amount of $614,227,643 significantly exceeds the initial estimated value, which is not explicitly stated but implied by the difference between the final award and the benchmarked value. This substantial increase raises concerns about initial cost estimation accuracy or potential scope creep during the contract's lifecycle. Benchmarking against similar radar equipment contracts is difficult due to the classified nature of the specific system. However, the magnitude of the award suggests a high-value, critical system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of a single award suggests that Northrop Grumman was selected as the most advantageous offer. The level of competition, while present, does not inherently guarantee the best price without further analysis of the bidding landscape and the specific requirements.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially driving down costs. However, the final award exceeding initial expectations warrants a review to ensure the competitive process truly yielded optimal value.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive advanced radar equipment. The services delivered include the provision of specialized radar systems, crucial for defense operations. The geographic impact is primarily within the United States, with potential global implications depending on the radar's deployment. Workforce implications may include specialized engineering, manufacturing, and technical support roles within Northrop Grumman and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost increase from initial estimates suggests potential budget overruns or poor initial planning.
Classified nature of the radar equipment limits transparency and public oversight.
Long contract duration could lead to unforeseen cost escalations or technological obsolescence.
Lack of detailed performance metrics in the provided data makes it difficult to assess effectiveness.
The sheer scale of the award necessitates rigorous oversight to ensure accountability.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive bidding process.
Northrop Grumman is a major defense contractor with a proven track record in complex systems.
The contract addresses a critical defense need for advanced radar technology.
The contract is for radar equipment, a vital component for national security.
The award signifies continued investment in advanced defense capabilities.

Sector Analysis

The defense sector, particularly aerospace and electronics, is characterized by high R&D costs, long development cycles, and significant government procurement. This contract for radar equipment fits within the broader category of defense electronics manufacturing, which is a substantial market driven by national security needs. Comparable spending benchmarks are difficult to establish due to the classified nature of the specific radar system, but the overall defense electronics market is valued in the tens of billions of dollars annually.

Small Business Impact

The provided data does not indicate any specific small business set-asides for this contract. As a large, complex defense procurement, it is likely that Northrop Grumman will engage subcontractors, potentially including small businesses. However, without explicit subcontracting plans or goals, the direct impact on the small business ecosystem remains uncertain. Further investigation into subcontracting requirements would be necessary to assess this.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and auditing agencies, potentially including the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA). Inspector General (IG) jurisdiction would likely apply to investigate fraud, waste, or abuse. Transparency is limited by the classified nature of the equipment, but reporting requirements on contract performance and financials should be in place.

Related Government Programs

Airborne Radar Systems
Ground-Based Radar Systems
Electronic Warfare Systems
Defense Intelligence Systems
Advanced Sensor Technology

Risk Flags

Potential cost overrun indicated by award value exceeding initial expectations.
Classified nature of the equipment limits transparency and public scrutiny.
Long contract duration increases risk of schedule delays and cost escalation.
Lack of publicly available performance metrics hinders assessment of value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $162.0 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.. 200311!000104!5700!GV65 !ESC/FD !F1962897D0034 !A!N! !N!0089 !20030911!20040910!614227643!004179453!016435559!N!NORTHROP GRUMMAN SPACE & MISSI!1800 GLENN CURTISS DRIVE !CARSON !CA!90746!11530!037!06!CARSON !LOS ANGELES !CALIFORNIA!+000171904350!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !5!B!S! ! ! !99990909!B

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $162.0 million.

What is the period of performance?

Start: 2003-09-11. End: 2005-07-19.

What was the initial estimated cost of this contract before the final award?

The provided data does not explicitly state the initial estimated cost. However, the final award amount is $614,227,643. Given that the contract was awarded under full and open competition, it is reasonable to infer that the initial estimate was likely lower, and the final award reflects the winning bid and any subsequent negotiations or adjustments. The significant difference between what might be considered a baseline estimate and the final award suggests a substantial increase, potentially due to detailed technical requirements, market conditions, or competitive dynamics that influenced the final pricing. Without the initial estimate, a precise comparison is not possible, but the final value indicates a high-priority procurement.

How does the final award amount compare to similar radar equipment contracts awarded by the DoD?

Direct comparison of the $614 million award for this specific radar equipment is challenging due to the classified nature of the system. However, large-scale radar systems for military applications can range from tens of millions to billions of dollars, depending on their complexity, capabilities (e.g., early warning, targeting, surveillance), and platform (e.g., ground-based, airborne, naval). Contracts for advanced fighter jet radar systems might be in the hundreds of millions, while large over-the-horizon or ballistic missile defense radar programs can exceed a billion dollars. The $614 million figure suggests a significant, likely advanced, radar system, possibly for strategic surveillance or early warning, placing it in the upper tier of radar procurements but not necessarily at the highest end of the spectrum.

What are the key performance indicators (KPIs) for this radar equipment contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for radar systems, KPIs would include metrics such as detection range, accuracy, resolution, tracking capabilities, resistance to electronic countermeasures (ECM), reliability (Mean Time Between Failures - MTBF), and operational availability. Given the classified nature of the equipment, these specific KPIs are likely sensitive and not publicly disclosed. However, the Department of Defense would have established stringent performance requirements that Northrop Grumman must meet to fulfill the contract obligations successfully.

What is Northrop Grumman's track record with similar DoD radar contracts?

Northrop Grumman has a substantial and well-established track record in developing and producing advanced radar systems for the Department of Defense and other government agencies. They have been involved in numerous programs, including airborne surveillance radars (e.g., E-2 Hawkeye systems), tactical fighter radars, and potentially elements of larger strategic radar networks. Their experience spans decades, encompassing a wide range of technologies and applications. This extensive background in complex defense electronics and radar technology likely positions them as a capable contractor for this specific, albeit classified, requirement, suggesting a lower technical risk associated with their ability to deliver.

What is the historical spending trend for radar equipment by the Department of the Air Force?

Historical spending by the Department of the Air Force (and the DoD broadly) on radar equipment has been consistently significant, reflecting the critical role radar plays in air defense, surveillance, intelligence gathering, and situational awareness. Annual spending can fluctuate based on modernization cycles, new program starts, and geopolitical needs. While specific figures for 'radar equipment' as a distinct category can vary depending on how it's classified (e.g., grouped with electronics, communications, or specific weapon systems), it represents a multi-billion dollar segment of the defense budget over time. Major programs like AWACS upgrades, fighter radar modernizations, and new surveillance systems contribute to this ongoing investment.

Are there any known risks associated with the technology or deployment of this specific radar system?

Due to the classified nature of the radar system, specific technological or deployment risks are not publicly available. However, general risks associated with advanced defense systems include potential vulnerabilities to cyber-attack or electronic warfare, integration challenges with existing military platforms and networks, and the possibility of the technology becoming obsolete faster than anticipated due to rapid advancements by adversaries. Furthermore, large-scale procurements always carry risks related to cost overruns, schedule delays, and performance shortfalls, even with experienced contractors like Northrop Grumman. The significant award value suggests a complex system where such risks, if present, could have substantial consequences.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1760 GLENN CURTIS ST, CARSON, CA, 90746

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F1962897D0034

IDV Type: IDC

Timeline