DoD's $326M JEDI contract awarded to Northrop Grumman for navigation systems shows strong competition
Contract Overview
Contract Amount: $32,623,909 ($32.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-12-21
End Date: 2021-06-30
Contract Duration: 922 days
Daily Burn Rate: $35.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: INDEFINATE DELIVERY, INDEFINATE QUANTITY IN SUPPORT OF THE JOINT THREAT EMITTER (JTE) ENHANCED DELIVERY INITIATIVE (JEDI) CONTRACT.
Place of Performance
Location: BUFFALO, ERIE County, NEW YORK, 14221
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $32.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: INDEFINATE DELIVERY, INDEFINATE QUANTITY IN SUPPORT OF THE JOINT THREAT EMITTER (JTE) ENHANCED DELIVERY INITIATIVE (JEDI) CONTRACT. Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Northrop Grumman, a major defense contractor, secured this award. 3. The contract focuses on navigation systems, a critical component for defense operations. 4. The duration of the contract suggests a long-term need for these services. 5. The firm-fixed-price structure aims to control costs for the government. 6. The contract value is significant, reflecting the importance of the JEDI initiative.
Value Assessment
Rating: good
The contract's firm-fixed-price structure is a positive indicator for cost control. Benchmarking against similar contracts for advanced navigation systems is challenging without more specific service details. However, the competitive award process suggests a reasonable price was likely achieved. The total value of $326 million over its period of performance indicates a substantial investment in critical defense technology.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the designation implies a healthy level of interest and competition for this significant defense contract.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value for its investment.
Public Impact
The Department of Defense benefits from enhanced joint threat emitter capabilities. This contract supports the development and delivery of advanced navigation systems. The primary geographic impact is within the United States, supporting defense operations. The contract likely supports a specialized workforce in aerospace and defense manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs, despite firm-fixed-price.
- Dependence on a single large contractor for critical navigation technology.
- Risk of technological obsolescence if not continuously updated.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Firm-fixed-price contract type helps manage cost certainty.
- Northrop Grumman has a strong track record in defense systems.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems. The market for such specialized defense electronics is characterized by high barriers to entry due to technological complexity and stringent security requirements. Spending in this area is driven by national security needs and technological advancements in military capabilities.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this contract. As a large prime contract awarded to a major defense corporation, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation would depend on Northrop Grumman's subcontracting plan and the availability of qualified small businesses for specific components or services.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms and performance standards. Accountability measures are inherent in the firm-fixed-price structure, which incentivizes the contractor to meet cost targets. Transparency is facilitated through contract award databases, though detailed performance metrics may be considered sensitive.
Related Government Programs
- Defense Advanced Research Projects Agency (DARPA) programs
- Naval Air Systems Command (NAVAIR) contracts
- Air Force Life Cycle Management Center (AFLCMC) procurements
- Missile Defense Agency (MDA) contracts
Risk Flags
- Potential for scope creep
- Technological obsolescence risk
- Dependence on contractor performance
Tags
defense, department-of-defense, northrop-grumman, full-and-open-competition, firm-fixed-price, navigation-systems, 334511, new-york, delivery-order, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. INDEFINATE DELIVERY, INDEFINATE QUANTITY IN SUPPORT OF THE JOINT THREAT EMITTER (JTE) ENHANCED DELIVERY INITIATIVE (JEDI) CONTRACT.
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 $32.6 million.
What is the period of performance?
Start: 2018-12-21. End: 2021-06-30.
What is Northrop Grumman's track record with similar large-scale defense navigation system contracts?
Northrop Grumman Systems Corporation has a long and extensive history of developing and delivering complex defense systems, including advanced navigation, guidance, and control technologies for various military platforms. They have been a prime contractor on numerous large-scale programs for the Department of Defense and other allied nations, encompassing aircraft, missiles, and space systems. Their experience includes integrating sophisticated sensor suites, inertial navigation systems, and GPS-based solutions. While specific details of past performance on contracts directly comparable to JEDI are often proprietary, their overall portfolio demonstrates a significant capability and established presence in this specialized sector of defense contracting.
How does the $326 million value compare to other navigation system contracts within the DoD?
The $326 million value for the JEDI contract is substantial, placing it among significant investments in advanced defense systems. To provide a precise comparison, one would need to analyze the scope, duration, and technological sophistication of other navigation system contracts awarded by the DoD. However, contracts for major platform upgrades, new system development, or large-scale fleet-wide installations can easily reach hundreds of millions or even billions of dollars. Given that JEDI focuses on enhanced delivery initiatives for threat emitters, it suggests a critical capability upgrade, justifying a significant budget allocation. It is likely within the upper range for system-specific development and integration contracts but may be less than full platform acquisition programs.
What are the primary risks associated with this contract, and how are they mitigated?
Primary risks include technological obsolescence, as defense technology evolves rapidly; potential cost overruns, despite the firm-fixed-price structure, if unforeseen technical challenges arise or scope creep occurs; and performance issues if the delivered systems do not meet stringent operational requirements. Mitigation strategies include robust government oversight by the DCMA, adherence to strict technical specifications, phased delivery schedules allowing for early testing and feedback, and the contractor's own quality assurance processes. The firm-fixed-price nature itself acts as a primary risk mitigation tool by placing the cost burden on the contractor.
How effective is the firm-fixed-price (FFP) contract type in managing costs for this type of advanced system?
The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks are understood. For advanced systems like those related to JEDI, FFP incentivizes the contractor to control costs and improve efficiencies to maximize profit. However, if the technical requirements are highly complex or subject to significant change during development, FFP can sometimes lead to contractors being hesitant to incorporate necessary changes or potentially cutting corners if not carefully managed. In such cases, the government must ensure clear specifications and robust oversight to prevent performance compromises while still benefiting from cost certainty.
What is the historical spending trend for navigation and guidance systems within the Department of Defense?
Historical spending on navigation and guidance systems within the Department of Defense has consistently been significant, reflecting their critical role across all military branches and platforms. Annual expenditures can fluctuate based on major acquisition programs, modernization efforts, and the introduction of new technologies. Over the past decade, the DoD has invested billions annually in these areas, driven by the need for precision targeting, enhanced situational awareness, and resilient navigation capabilities in contested environments. Spending is often concentrated on upgrades to existing platforms, development of next-generation systems (like those potentially supported by JEDI), and sustainment of fielded equipment.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1740 WEHRLE DR, BUFFALO, NY, 14221
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,623,909
Exercised Options: $32,623,909
Current Obligation: $32,623,909
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA821019D0001
IDV Type: IDC
Timeline
Start Date: 2018-12-21
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 00:00:00
Last Modified: 2025-07-03
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