DoD's $1.23B Radar Contract with Westinghouse Electric Corp. Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $386,534,246 ($386.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 1989-05-13

End Date: 2008-04-29

Contract Duration: 6,926 days

Daily Burn Rate: $55.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199708!5700!0006!GU21 !ASC/PKFH !F3365789C0087 !A!*!P00122 !19970513!19980131!122553738!861412252!001343953!N!97942!WESTINGHOUSE ELECTRIC CORP !940 ELKRIDGE LANDING RD !LINTHCUM HTS !MD!21090!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!-000000662978!N!N!000000000000!5841!RADAR EQUIPMENT, AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION !3AFH!F-16 FALCON !3728!3!*!S!D!B!A!*!D !N!J!1!002!N!5A!A!Y!B!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $386.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 199708!5700!0006!GU21 !ASC/PKFH !F3365789C0087 !A!*!P00122 !19970513!19980131!122553738!861412252!001343953!N!97942!WESTINGHOUSE ELECTRIC CORP !940 ELKRIDGE LANDING RD !LINTHCUM HTS !MD!21090!04000!510!24!BALTIMORE !BALTIM… Key points: 1. The contract awarded to Westinghouse Electric Corp. for airborne radar equipment is substantial, totaling over $1.23 billion. 2. The 'NOT COMPETED' designation raises significant questions about the procurement process and potential lack of competitive pricing. 3. The long duration of the contract (1989-2008) suggests a potentially outdated acquisition strategy and may not reflect current market conditions. 4. The sector is dominated by large defense contractors, making it difficult for smaller, innovative firms to enter.

Value Assessment

Rating: questionable

The contract's total value of $1.23 billion for radar equipment is significant. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems procured through competitive means.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source or limited competition award. This lack of competition likely resulted in higher prices and reduced opportunities for innovative solutions from other vendors.

Taxpayer Impact: The absence of competitive bidding potentially led to taxpayers overpaying for the radar equipment, as there was no market pressure to drive down costs.

Public Impact

Taxpayers may have incurred higher costs due to the lack of competitive bidding. The long contract period could mean the technology is outdated, impacting military effectiveness. Limited opportunities for small businesses to participate in a major defense contract. The sole-source nature raises concerns about transparency and accountability in defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential Overpricing
Long Contract Duration
Outdated Technology Risk

Positive Signals

Established Vendor Relationship
Critical Defense Capability

Sector Analysis

This contract falls within the Defense sector, specifically for Aircraft Manufacturing (NAICS 336411). Defense spending on radar and electronics is substantial, but often characterized by long procurement cycles and limited competition due to specialized requirements.

Small Business Impact

The contract does not appear to have specific provisions for small business participation, which is common in large, sole-source defense procurements. This limits opportunities for small businesses in a significant spending area.

Oversight & Accountability

The 'NOT COMPETED' status warrants further investigation by oversight bodies to ensure the justification for sole-source procurement was valid and that the pricing was fair. The long duration also suggests a need for review of contract management.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of Competition
Potential for Overpricing
Risk of Technological Obsolescence
Limited Small Business Participation
Long Contract Duration
Lack of Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $386.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 199708!5700!0006!GU21 !ASC/PKFH !F3365789C0087 !A!*!P00122 !19970513!19980131!122553738!861412252!001343953!N!97942!WESTINGHOUSE ELECTRIC CORP !940 ELKRIDGE LANDING RD !LINTHCUM HTS !MD!21090!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!-000000662978!N!N!000000000000!5841!RADAR EQUIPMENT, AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION !3AFH!F-16 FALCON !3728!3!*!S!D!B!A!*!D !N!J!1!0

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $386.5 million.

What is the period of performance?

Start: 1989-05-13. End: 2008-04-29.

Was the sole-source justification for this radar equipment contract adequately documented and validated, considering the significant expenditure?

The justification for a sole-source award, especially for a contract valued at over $1.23 billion, must be robust. Agencies typically require detailed documentation proving that only one responsible source can provide the required supplies or services. Without this, the award could be seen as a missed opportunity for cost savings and innovation through competition.

What is the assessed risk of technological obsolescence given the contract's start in 1989 and end in 2008?

A contract spanning nearly two decades, from 1989 to 2008, carries a high risk of technological obsolescence. Radar technology evolves rapidly. The equipment procured under this contract may no longer represent the cutting edge, potentially impacting the effectiveness of the aircraft it's integrated with and requiring costly upgrades or replacements.

How does the pricing of this contract compare to industry benchmarks for similar airborne radar systems, considering the lack of competitive bidding?

Direct comparison is challenging without access to detailed pricing data and specific system capabilities. However, contracts awarded without competition are generally presumed to be at a higher price point than those secured through a robust bidding process. Independent cost analysis would be necessary to determine if the $1.23 billion expenditure represented fair and reasonable pricing.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: Titan II Inc. (UEI: 016435559)

Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,456,354,970

Exercised Options: $1,456,354,970

Current Obligation: $386,534,246

Contract Characteristics

Cost or Pricing Data: YES

Timeline