DoD's $292M contract for electronics and communication equipment awarded to Northrop Grumman Systems Corporation
Contract Overview
Contract Amount: $292,356,237 ($292.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2002-05-20
End Date: 2010-05-26
Contract Duration: 2,928 days
Daily Burn Rate: $99.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: 200208!000083!5700!GV47 !ESC/JSK !F1962802C0022 !A!N! !N! !20020520!20050930!152670030!008255408!016435559!N!NORTHROP GRUMMAN I T T A S C !2000 W NASA BLVD !MELBOURNE !FL!32904!43975!009!12!MELBOURNE !BREVARD !FLORIDA !+000038409000!N!N!000079400000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !3GNP!AN/FSD JOINT STARS !334220!E! !1! ! ! ! ! !99990909!B! ! !A! !D!N!L!1!001!N!1G!A!Y!D! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! ! ! ! !0001!
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $292.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200208!000083!5700!GV47 !ESC/JSK !F1962802C0022 !A!N! !N! !20020520!20050930!152670030!008255408!016435559!N!NORTHROP GRUMMAN I T T A S C !2000 W NASA BLVD !MELBOURNE !FL!32904!43975!009!12!MELBOURNE !BREVARD !FLORIDA !+000038409000!N!N!000079400000!AC64!RDTE/ELECTRONICS & COMMUN… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. Significant investment in electronics and communication equipment suggests a focus on advanced military capabilities. 3. The contract duration of nearly 8 years indicates a long-term need for these systems. 4. Awarded to a large, established defense contractor, potentially limiting opportunities for smaller, innovative firms. 5. The 'COST NO FEE' contract type shifts risk to the government, requiring robust oversight. 6. Geographic location of the contractor in Florida may have implications for regional economic impact.
Value Assessment
Rating: questionable
The total value of $292.36 million for this contract is substantial. Without specific details on the units or services provided, a direct value-for-money assessment is difficult. However, the 'COST NO FEE' contract type, coupled with a sole-source award, inherently carries higher risk for the government. This means the government bears the cost overruns, and the absence of competition means there was no market pressure to drive down prices. Benchmarking against similar sole-source contracts for advanced electronics and communication equipment would be necessary for a more precise evaluation, but the inherent risks suggest a 'questionable' value proposition.
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 means that potential alternative suppliers or more cost-effective solutions were not explored through a bidding process. This can lead to higher prices for the government as there is no incentive for the contractor to offer the lowest possible price.
Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the best possible price. The government may end up paying more than it would have in a competitive environment, as the contractor faces no direct pressure from rivals.
Public Impact
The primary beneficiaries are likely the Department of Defense and its personnel who will utilize the advanced electronics and communication equipment. The contract delivers critical electronics and communication equipment, essential for military operations and command and control. The geographic impact is primarily centered around the contractor's facilities in Melbourne, Florida, potentially creating or sustaining jobs in that region. Workforce implications include employment opportunities for engineers, technicians, and support staff at Northrop Grumman Systems Corporation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potentially increases costs for the government.
- Cost-plus contract type shifts financial risk to the government, requiring diligent oversight to control expenditures.
- Lack of transparency in the sole-source justification could obscure potential alternatives or better deals.
- Long contract duration may not adapt well to rapidly evolving technological advancements in electronics and communication.
Positive Signals
- Award to a large, established contractor like Northrop Grumman suggests a high level of technical capability and reliability.
- The contract addresses a critical need for advanced electronics and communication equipment, vital for national security.
- The duration of the contract indicates a stable, long-term commitment to a specific technological solution.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on electronics and communication equipment. The North American Industry Classification System (NAICS) code 336411 for Aircraft Manufacturing is listed, which might indicate the integration of this equipment into aircraft platforms. The market for defense electronics and communication systems is characterized by high barriers to entry due to specialized technology, stringent security requirements, and long development cycles. Spending in this area is substantial, driven by the need for technological superiority in military operations. Comparable spending benchmarks would involve analyzing other large-scale procurements of similar advanced communication and electronic systems for defense applications.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss: false'. Furthermore, the contractor, Northrop Grumman Systems Corporation, is a large prime contractor. While large prime contracts can sometimes include subcontracting opportunities for small businesses, the absence of a specific set-aside suggests that small businesses were not prioritized in the primary award. The impact on the small business ecosystem would depend on whether Northrop Grumman actively seeks out small business subcontractors for specialized components or services, which is not explicitly detailed in the provided data.
Oversight & Accountability
The 'COST NO FEE' contract type necessitates robust government oversight to manage costs effectively and prevent overruns. The Defense Contract Management Agency (DCMA) is listed as the 'sa' (servicing agency), indicating their role in overseeing contract performance and financial aspects. Transparency regarding the justification for the sole-source award and detailed reporting on expenditures would be crucial for accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to this contract.
Related Government Programs
- Defense Communications Systems
- Military Electronics Procurement
- Advanced Avionics Systems
- Command and Control Systems
- Aerospace Electronics Manufacturing
Risk Flags
- Sole Source Justification
- Cost-Plus Contract Risk
- Lack of Competition
- Long Contract Duration
Tags
defense, department-of-defense, northrop-grumman-systems-corporation, electronics, communication-equipment, sole-source, cost-plus, joint-stars, florida, major-contract, rdte
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $292.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200208!000083!5700!GV47 !ESC/JSK !F1962802C0022 !A!N! !N! !20020520!20050930!152670030!008255408!016435559!N!NORTHROP GRUMMAN I T T A S C !2000 W NASA BLVD !MELBOURNE !FL!32904!43975!009!12!MELBOURNE !BREVARD !FLORIDA !+000038409000!N!N!000079400000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !3GNP!AN/FSD JOINT STARS !334220!E! !1! ! ! ! ! !99990909!B! ! !A! !D!N!L!1!001!N!1G!A!Y!D! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! ! ! ! !0001!
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 $292.4 million.
What is the period of performance?
Start: 2002-05-20. End: 2010-05-26.
What specific types of electronics and communication equipment are being procured under this contract, and what are their intended military applications?
The provided data indicates the contract is for 'ELECTRONICS & COMMUNICATION EQ-DEMO/VALID' and specifically mentions 'ELECTRONICS AND COMMUNICATION' and 'AN/FSD JOINT STARS'. The Joint STARS (Joint Surveillance Target Attack Radar System) is an airborne battle management andനാണ് command and control platform. Therefore, the equipment likely pertains to advanced radar systems, communication suites, data processing, and related electronic components essential for the Joint STARS mission, which involves surveillance, target acquisition, and battle management in support of ground and air forces. The 'DEMO/VALID' designation might suggest a focus on demonstration or validation phases of new technologies or upgrades.
What is the historical spending pattern for similar electronics and communication equipment procurements by the Department of Defense, and how does this contract compare?
Historical spending on defense electronics and communication equipment is substantial and fluctuates based on technological advancements, geopolitical needs, and budget allocations. The Department of Defense consistently invests billions annually in these areas. This specific contract, valued at approximately $292 million over nearly eight years, represents a significant but not unprecedented investment for a major system like Joint STARS upgrades or new capabilities. To compare effectively, one would need to analyze spending on comparable sole-source or competed contracts for advanced radar, communication, and C2 systems over similar timeframes. The 'COST NO FEE' aspect, combined with sole-source, suggests a higher risk profile than a fixed-price competitive contract, which is a key differentiator in value assessment.
What is Northrop Grumman Systems Corporation's track record with Department of Defense contracts, particularly in electronics and communication systems?
Northrop Grumman Systems Corporation is a major defense contractor with an extensive history of delivering complex systems to the Department of Defense. They are a key player in areas such as aerospace, defense electronics, cybersecurity, and information systems. Their portfolio includes numerous large-scale contracts for aircraft, satellites, communication networks, and advanced sensor systems. For instance, they are a prime contractor for programs like the B-2 bomber, E-2D Hawkeye, and various intelligence, surveillance, and reconnaissance (ISR) platforms. Their track record with electronics and communication systems is generally strong, characterized by the ability to handle technically challenging projects, though like any large contractor, they have also faced scrutiny over cost and performance on specific contracts. This specific contract builds upon their established expertise in these domains.
Given the sole-source nature and 'COST NO FEE' type, what are the primary risks associated with this contract, and what mitigation strategies are in place?
The primary risks associated with this sole-source, 'COST NO FEE' contract include potential cost overruns (borne by the government), lack of competitive pressure leading to suboptimal pricing, and the risk of the contractor not performing efficiently as the financial incentive for cost control is reduced. Mitigation strategies typically involve stringent government oversight by agencies like DCMA, detailed cost monitoring and auditing, performance metrics, and clear contractual requirements. The government must actively manage the scope, ensure efficient resource utilization, and maintain open communication channels to address issues proactively. Regular reviews and milestone assessments are critical to ensure the project stays on track and within the government's expected value, despite the inherent risks of the contract type.
How does the $292 million contract value compare to the overall annual spending of the Department of Defense on electronics and communication systems?
The Department of Defense's annual spending on electronics and communication systems is in the tens of billions of dollars, often exceeding $50 billion depending on the fiscal year and specific program priorities. This $292 million contract, while substantial in absolute terms, represents a relatively small fraction of the DoD's total annual expenditure in this broad category. It is significant in the context of the specific system it supports (likely Joint STARS), but within the overall defense budget for electronics and communications, it is one of many large investments. Its proportion highlights the scale of individual major system procurements versus the aggregate spending across numerous smaller systems, upgrades, and research efforts.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 2000 W NASA BLVD, MELBOURNE, FL, 08
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2002-05-20
Current End Date: 2010-05-26
Potential End Date: 2010-05-26 00:00:00
Last Modified: 2014-11-18
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