DoD's $249M contract for airborne radar systems awarded to Northrop Grumman, raising value-for-money questions

Contract Overview

Contract Amount: $24,934,255 ($24.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2006-09-29

End Date: 2008-08-28

Contract Duration: 699 days

Daily Burn Rate: $35.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200612!000243!5700!FA8504!WR-ALC/LBK !FA850406C0014 !A!N! !N! ! !20060929!20080928!966764417!008255408!016435559!N!NORTHROP GRUMMAN NORDEN SYSTEM!10 NORDEN PL !NORWALK !CT!06855!55990!001!09!NORWALK !FAIRFIELD !CONN !+000021881755!N!N!000000000000!5841!RADAR EQUIPMENT, AIRBORNE !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: NORWALK, FAIRFIELD County, CONNECTICUT, 06855

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $24.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200612!000243!5700!FA8504!WR-ALC/LBK !FA850406C0014 !A!N! !N! ! !20060929!20080928!966764417!008255408!016435559!N!NORTHROP GRUMMAN NORDEN SYSTEM!10 NORDEN PL !NORWALK !CT!06855!55990!001!09!NORWALK !FAIR… Key points: 1. The contract's value of $249 million for airborne radar systems warrants scrutiny regarding its cost-effectiveness. 2. Awarded on a non-competitive basis, the lack of a bidding process limits price discovery and potentially inflates costs. 3. The contract duration of 699 days suggests a significant project, but performance metrics are not detailed. 4. Northrop Grumman's established presence in defense contracting indicates a strong incumbent, but also potential for complacency. 5. The specific nature of 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' suggests a specialized, high-value component. 6. The absence of small business subcontracting data makes it difficult to assess broader economic impact.

Value Assessment

Rating: questionable

The total award of $249,342,550 for airborne radar equipment appears substantial. Without a competitive bidding process, it is difficult to benchmark this price against market rates or similar contracts. The lack of detailed cost breakdowns or performance metrics makes a definitive value-for-money assessment challenging. However, the specialized nature of airborne radar systems often commands high prices due to technological complexity and R&D investment. Further analysis would be needed to determine if this price reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating a sole-source procurement. This means that only one contractor, Northrop Grumman Systems Corporation, was solicited. The lack of competition means that potential alternative suppliers were not considered, and the government did not benefit from a bidding war that could drive down prices. This approach is typically justified when only one source can meet the requirement, but it limits the government's ability to ensure the best possible price and terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available. The absence of competition removes a key mechanism for ensuring cost efficiency.

Public Impact

The primary beneficiary of this contract is the Department of the Air Force, which will receive advanced airborne radar systems. The contract delivers critical components for national defense, likely enhancing surveillance and operational capabilities. The geographic impact is centered around Northrop Grumman's operations in Norwalk, Connecticut, and potentially other facilities involved in production and integration. Workforce implications include employment opportunities for engineers, technicians, and manufacturing personnel within Northrop Grumman and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpricing and reduced value for taxpayer funds.
Limited transparency regarding the justification for a sole-source award.
Absence of detailed performance metrics makes it difficult to assess the effectiveness and efficiency of the awarded funds.
No clear indication of small business participation or subcontracting opportunities.

Positive Signals

Award to a large, established defense contractor like Northrop Grumman suggests a high likelihood of technical capability and delivery reliability.
The contract addresses a critical defense need for advanced radar systems.
Firm Fixed Price contract type provides cost certainty for the government, assuming the scope is well-defined.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced electronic systems. The market for airborne radar is characterized by high barriers to entry due to complex technology, significant R&D costs, and stringent government certification requirements. Major players include large defense contractors with specialized expertise. Spending in this sub-sector is driven by military modernization programs and the need for enhanced situational awareness and targeting capabilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it provide information on subcontracting plans. As a sole-source award to a large corporation, it is unlikely that small businesses were directly involved as prime contractors. The absence of explicit subcontracting goals means that the direct economic benefit to the small business ecosystem from this specific award is not guaranteed and likely minimal unless Northrop Grumman voluntarily engages them.

Oversight & Accountability

Oversight for this Department of Defense contract would typically fall under the purview of the Department of the Air Force's contracting and program management offices. Inspector General offices within the DoD are responsible for investigating fraud, waste, and abuse. Transparency is limited due to the sole-source nature and the lack of publicly available performance reports or detailed cost justifications. Accountability relies heavily on the contractor's internal processes and the government's contract administration.

Related Government Programs

Airborne Surveillance and Reconnaissance Systems
Defense Electronics Manufacturing
Naval Radar Systems
Ground Support Radar Equipment
Electronic Warfare Systems

Risk Flags

Sole-source award lacks transparency and competitive pricing.
Potential for cost overruns due to lack of competition.
Limited public information on performance metrics and justification.
No clear small business subcontracting goals identified.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200612!000243!5700!FA8504!WR-ALC/LBK !FA850406C0014 !A!N! !N! ! !20060929!20080928!966764417!008255408!016435559!N!NORTHROP GRUMMAN NORDEN SYSTEM!10 NORDEN PL !NORWALK !CT!06855!55990!001!09!NORWALK !FAIRFIELD !CONN !+000021881755!N!N!000000000000!5841!RADAR EQUIPMENT, AIRBORNE !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !334511!E! !3! ! ! ! ! !999

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 $24.9 million.

What is the period of performance?

Start: 2006-09-29. End: 2008-08-28.

What is the specific type and capability of the airborne radar system being procured?

The contract specifies 'RADAR EQUIPMENT, AIRBORNE' under the Product Service Code (PSC) '334511' (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing). While the exact model or technical specifications are not detailed in the provided data, the PSC suggests advanced systems crucial for military aircraft operations. These systems are likely designed for functions such as target detection, tracking, navigation, and potentially electronic warfare support, contributing to the overall mission effectiveness of the platforms they are integrated into.

What is the justification for awarding this contract on a sole-source basis?

The provided data explicitly states the contract was 'NOT COMPETED'. While the specific justification is not included, common reasons for sole-source awards in defense contracting include: unique technical capabilities possessed by only one contractor, urgent and compelling needs where competition is not feasible, or if the system is a sole-source derivative of an existing platform. Without further documentation, such as a Justification and Approval (J&A) document, the precise rationale remains undisclosed. This lack of transparency is a common concern with sole-source procurements.

How does the contract's value compare to similar airborne radar systems procured by the DoD?

Benchmarking this $249 million contract against similar procurements is challenging without more specific details on the system's capabilities and quantity. Airborne radar systems vary significantly in complexity and cost. However, given the sole-source nature and the specialized field, it is plausible that the price reflects significant R&D, advanced technology, and integration costs. A comparative analysis would require identifying contracts with comparable PSCs, award dates, and system functionalities, which are not readily available in this dataset. The lack of competition inherently makes direct price comparison difficult.

What are the performance metrics and delivery schedule outlined in the contract?

The contract data indicates an award date of September 29, 2006, and an estimated completion date of August 28, 2008, giving a duration of approximately 699 days (or 23 months). However, specific performance metrics, such as technical performance requirements, delivery milestones, or quality assurance standards, are not detailed in the provided summary data. The contract type is 'FIRM FIXED PRICE' (FFP), which typically means the contractor is obligated to deliver the specified goods or services at a fixed price, regardless of the actual costs incurred. This implies that performance expectations should be clearly defined within the contract's statement of work.

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

Northrop Grumman Systems Corporation is a major defense contractor with a long history of delivering complex systems, including radar and electronic warfare equipment, to the Department of Defense. They have a substantial portfolio of contracts across various military branches. While this specific contract was sole-source, the company's overall track record generally involves successful execution of large-scale defense programs. However, like any large contractor, they may have faced past performance issues or contract disputes on other programs, which would typically be documented in government performance databases (e.g., Contractor Performance Assessment Reporting System - CPARS).

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: 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: 10 NORDEN PL, NORWALK, CT, 04

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline