Northrop Grumman awarded $12.2M contract for advanced navigation systems by the Air Force

Contract Overview

Contract Amount: $12,247,465 ($12.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-04-25

End Date: 2026-10-31

Contract Duration: 919 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LITHUANIAN JTE LOA. FMS FC2U AND FMS WTEU.

Place of Performance

Location: BUFFALO, ERIE County, NEW YORK, 14221

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $12.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITHUANIAN JTE LOA. FMS FC2U AND FMS WTEU. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for a firm-fixed-price delivery order, providing cost certainty for the government. 3. Duration of 919 days indicates a medium-term project for system development or sustainment. 4. The North American Industry Classification System (NAICS) code 334511 points to specialized manufacturing in navigation systems. 5. The contract's value is modest within the broader defense spending landscape. 6. Geographic location of New York (NY) for the contractor may influence logistics and oversight.

Value Assessment

Rating: good

The contract value of $12.2 million for advanced navigation systems appears reasonable given the specialized nature of the equipment and the contractor's expertise. Benchmarking against similar, though not identical, contracts for aerospace navigation components suggests this price falls within expected ranges. The firm-fixed-price structure helps mitigate cost overrun risks for the Department of Defense, contributing to good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the specific number of bidders is not provided, this method generally fosters a competitive environment, which can lead to better pricing and innovation. The Air Force's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and encourages a wider pool of suppliers, potentially leading to more cost-effective solutions for the government.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive advanced navigation systems. The contract supports the development, manufacturing, or sustainment of critical aeronautical and nautical navigation instruments. The geographic impact is primarily centered around the contractor's facilities in New York. This contract likely supports a specialized workforce within Northrop Grumman, contributing to high-skill employment in the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count prevents a full assessment of competitive intensity.
Potential for vendor lock-in if systems are highly proprietary and difficult to integrate with other platforms.
Dependence on a single contractor for critical navigation technology could pose a long-term risk if not managed carefully.

Positive Signals

Awarded through full and open competition, indicating a healthy market response.
Firm-fixed-price contract provides cost predictability for the government.
Northrop Grumman is a well-established defense contractor with a proven track record in aerospace systems.
The contract addresses a critical need for advanced navigation capabilities within the Air Force.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigation, guidance, and control systems. The market for such specialized components is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this area is driven by military modernization efforts and the need for advanced capabilities in contested environments. Comparable spending benchmarks would typically involve other contracts for avionics, sensor systems, or flight control hardware, often valued in the millions to tens of millions of dollars.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of advanced navigation systems and the prime contractor being Northrop Grumman, it is unlikely that significant subcontracting opportunities for small businesses will be mandated under this specific award, though the prime contractor may engage them independently.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price structure, which holds the contractor responsible for delivering the specified goods within the agreed-upon cost. Transparency is facilitated by the contract award process itself, particularly under full and open competition, and through public contract databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Force Navigation Systems Modernization
Advanced Avionics Procurement
Aerospace Systems Manufacturing
Defense Navigation Technology Development
FMS FC2U and FMS WTEU Programs

Risk Flags

Potential for schedule slippage due to complexity.
Risk of cost overruns if fixed-price is insufficient for unforeseen technical issues.
Dependence on specific contractor's proprietary technology.
Integration challenges with existing Air Force systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LITHUANIAN JTE LOA. FMS FC2U AND FMS WTEU.

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 $12.2 million.

What is the period of performance?

Start: 2024-04-25. End: 2026-10-31.

What is Northrop Grumman's track record with similar navigation system contracts for the U.S. Air Force?

Northrop Grumman has a long and extensive history of providing complex systems, including navigation and guidance technologies, to the U.S. military, particularly the Air Force. They are a major defense contractor involved in numerous programs ranging from strategic systems to tactical aircraft components. While specific details on past navigation system contracts of identical scope are not provided here, their overall performance in delivering sophisticated aerospace technology is generally well-documented through government performance reports and industry analyses. Their involvement in programs like the B-2 bomber and various satellite systems demonstrates a capacity for handling large, critical, and technologically advanced projects, suggesting a strong capability to fulfill this current contract.

How does the $12.2 million contract value compare to typical spending on advanced navigation systems by the Air Force?

The $12.2 million value for this specific delivery order appears to be within a moderate range for advanced navigation systems, especially when considered as a component of a larger platform or program. The Air Force procures a wide spectrum of systems, from individual component upgrades costing hundreds of thousands to entirely new system integrations running into hundreds of millions. Given that this is a delivery order under a larger contract vehicle (implied by 'LOA' and 'FMS'), its value represents a specific tranche of work. For specialized, high-technology items like advanced aeronautical navigation instruments, a $12.2 million award is not unusual and suggests a focused scope of work rather than a program-wide procurement.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential technical challenges in developing or integrating advanced navigation capabilities, schedule delays impacting operational readiness, and cost overruns if the firm-fixed-price structure proves insufficient for unforeseen issues. Mitigation strategies are embedded in the contract type and the contractor's selection. The firm-fixed-price nature places the cost risk primarily on Northrop Grumman. The selection of a reputable, experienced contractor like Northrop Grumman reduces technical and schedule risks. Furthermore, the Air Force likely has program management oversight and quality assurance processes in place to monitor progress and address issues proactively. The contract's duration also allows for phased development and testing.

What is the expected effectiveness of the delivered navigation systems in enhancing Air Force operations?

The effectiveness hinges on the specific capabilities of the 'advanced navigation systems' being procured. Typically, such systems aim to improve accuracy, reliability, and situational awareness for aircrews, especially in GPS-denied or contested environments. Enhanced navigation can lead to more precise mission execution, reduced flight times, improved fuel efficiency, and greater survivability. For the Air Force, these systems are critical for a wide range of operations, from strategic bombing and intelligence gathering to tactical support and airlift. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System' classification suggests a broad application, potentially impacting multiple aircraft types or mission sets, thereby increasing overall operational effectiveness and flexibility.

How has historical spending on navigation systems by the Department of Defense trended, and does this contract align?

Historical spending by the Department of Defense (DoD) on navigation systems has been substantial and generally increasing, driven by technological advancements and the need to maintain superiority in contested domains. This includes investments in inertial navigation systems (INS), GPS/GNSS receivers (including anti-jamming capabilities), and integrated systems. The $12.2 million award to Northrop Grumman aligns with the DoD's consistent investment in modernizing avionics and navigation capabilities across its platforms. While this single contract is a small fraction of the overall defense budget, it represents a typical expenditure for acquiring or upgrading specific navigation technologies for a particular set of platforms or requirements, fitting within the broader trend of sustained spending in this critical area.

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: $12,247,465

Exercised Options: $12,247,465

Current Obligation: $12,247,465

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $4,895,446

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