DoD's $13.5M AN/APN 241 radar system contract awarded to Northrop Grumman shows fair value with limited competition

Contract Overview

Contract Amount: $13,492,358 ($13.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-09-26

End Date: 2009-09-30

Contract Duration: 735 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/APN 241 GROUP B SETS AND REPLENISHMENT SPARES

Place of Performance

Location: NORWALK, FAIRFIELD County, CONNECTICUT, 06855

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $13.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AN/APN 241 GROUP B SETS AND REPLENISHMENT SPARES Key points: 1. The contract value of $13.5 million for radar systems and spares appears reasonable given the scope. 2. Competition was limited, raising questions about optimal price discovery for taxpayer funds. 3. The contract duration of 735 days suggests a focused, short-term need for these components. 4. Northrop Grumman's role as a key defense contractor positions them well for this type of award. 5. The award falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, a significant sector for defense procurement. 6. Fixed-price contract type helps mitigate cost overrun risks for the government.

Value Assessment

Rating: fair

The $13.5 million contract for AN/APN 241 radar systems and replenishment spares represents a moderate investment. Benchmarking against similar sole-source or limited-competition awards for specialized aircraft components is challenging due to proprietary data. However, the fixed-price nature of the contract provides some assurance against escalating costs. Without more granular data on the specific components and services included, a definitive value-for-money assessment is difficult, but the price does not appear excessively high for specialized defense equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, specific circumstances led to the exclusion of some potential bidders. The exact reasons for exclusion are not detailed in the provided data. A limited competition environment can sometimes lead to higher prices compared to full and open competition, as the pool of potential suppliers is restricted. The presence of only one awardee suggests that Northrop Grumman was the sole responsive or capable bidder under the specified conditions.

Taxpayer Impact: Limited competition can mean taxpayers may not benefit from the most competitive pricing achievable in a broader market. This can result in a less efficient use of public funds if alternative, lower-cost solutions were available but not considered.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating aircraft equipped with the AN/APN 241 radar system. The contract delivers essential radar systems and replenishment spares, ensuring operational readiness and maintenance capabilities. The geographic impact is primarily within the operational theaters and maintenance bases of the U.S. Air Force. Workforce implications include support for manufacturing, logistics, and maintenance personnel involved with the radar systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price negotiation, potentially increasing costs for taxpayers.
Lack of transparency regarding the 'exclusion of sources' makes it difficult to fully assess the fairness of the competition.
Reliance on a single awardee for critical spares could pose supply chain risks if Northrop Grumman faces production issues.

Positive Signals

The fixed-price contract type helps control costs and provides budget certainty.
Awarding to an established defense contractor like Northrop Grumman suggests a focus on reliability and proven performance.
The contract addresses the need for replenishment spares, indicating proactive maintenance planning by the Air Force.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft components. The market for specialized radar systems and their associated parts is often dominated by a few large, established defense contractors due to high barriers to entry, including technological expertise, security clearances, and existing government relationships. Spending in this sub-sector is driven by military modernization programs and the need to maintain aging fleets. Comparable spending benchmarks are difficult to ascertain without specific details on the technology and quantity of units procured.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-value contract awarded to a major defense contractor, the primary impact on small businesses would likely be through subcontracting opportunities. However, without specific subcontracting plans or goals detailed in the award, it's unclear how extensively small businesses will participate in fulfilling this contract. The focus on a specialized component like radar systems may limit the scope for broad small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight structures. The Air Force, as the procuring agency, would be responsible for monitoring performance and ensuring compliance with contract terms. Inspector General (IG) offices within the DoD may conduct audits or investigations into contract execution if specific concerns arise regarding waste, fraud, or abuse. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics are often not publicly disclosed.

Related Government Programs

AN/APN Radar Systems
Aircraft Electronic Systems
Defense Procurement
Northrop Grumman Defense Contracts
Air Force Avionics
Radar Spares and Replenishment

Risk Flags

Limited Competition
Potential for Higher Costs
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AN/APN 241 GROUP B SETS AND REPLENISHMENT SPARES

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 $13.5 million.

What is the period of performance?

Start: 2007-09-26. End: 2009-09-30.

What is the specific function and technological generation of the AN/APN 241 radar system?

The AN/APN 241 is a radar altimeter system used in various military aircraft. It provides crucial altitude information to the flight crew and other aircraft systems, particularly important for low-level flight operations, navigation, and targeting. While specific technological details are often classified or proprietary, radar altimeters like the AN/APN 241 typically operate by transmitting radio waves towards the ground and measuring the time it takes for the reflected signal to return, thereby calculating the precise height above terrain. Its inclusion in replenishment spares suggests it is a critical and potentially aging component within the Air Force's inventory.

How does the $13.5 million contract value compare to previous spending on the AN/APN 241 system?

Analyzing historical spending requires access to detailed procurement data beyond the scope of this single award. The provided data shows this contract awarded in 2007 with an end date in 2009, totaling $13.5 million. To compare, one would need to query databases like FPDS for all prior and subsequent contracts related to the AN/APN 241 system, looking at award amounts, quantities, and contract types. Without this broader context, it's impossible to determine if this $13.5 million represents a typical, increased, or decreased level of investment for this specific radar system.

What were the specific reasons for excluding other sources in this 'Full and Open Competition After Exclusion of Sources' award?

The designation 'Full and Open Competition After Exclusion of Sources' implies that a solicitation was issued broadly, but specific criteria or circumstances led to the exclusion of certain potential offerors before final evaluation. Common reasons for such exclusions include: failure to meet minimum technical requirements, inability to obtain necessary security clearances, lack of specific certifications, or if only one source possessed the proprietary data rights or unique capabilities essential for performance. Without further documentation from the contracting agency (Department of the Air Force), the precise rationale for excluding other sources in this particular AN/APN 241 contract remains unspecified.

What is Northrop Grumman's track record with AN/APN 241 systems or similar radar altimeter contracts?

Northrop Grumman is a major defense contractor with extensive experience in aerospace systems, including avionics and radar technology. While this specific award is for the AN/APN 241, Northrop Grumman likely has a broad portfolio of contracts involving similar radar altimeter systems or components across various military platforms. Their long-standing presence in the defense industry suggests a capability to produce and support such critical equipment. A deeper dive into their contract history would reveal the extent of their involvement with this specific system or comparable technologies, including past performance ratings and any significant issues encountered.

What are the potential risks associated with relying on a single contractor for replenishment spares of critical aircraft components?

Relying on a single contractor, like Northrop Grumman in this case, for replenishment spares of critical components such as the AN/APN 241 radar system introduces several risks. Firstly, it creates a potential single point of failure in the supply chain; any production delays, quality issues, or business disruptions faced by the contractor can directly impact aircraft availability. Secondly, limited competition can lead to higher unit prices over time, as the government may lack leverage for price negotiations. Lastly, it can stifle innovation and competition from other potential suppliers who might offer more cost-effective or technologically advanced alternatives if given the opportunity.

How does the fixed-price contract type mitigate risks for this specific radar system procurement?

The 'Firm Fixed Price' (FFP) contract type is advantageous for the government as it shifts the majority of the cost risk to the contractor, Northrop Grumman. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs incurred. This provides budget certainty for the Department of the Air Force and incentivizes the contractor to manage their costs efficiently. If Northrop Grumman's costs exceed the agreed-upon price, their profit margin will decrease; conversely, if they manage costs effectively, their profit will increase. This structure is generally preferred for procurements where the scope of work is well-defined, as it is for the supply of specific radar systems and spares.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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

Financial Breakdown

Contract Ceiling: $13,492,358

Exercised Options: $13,492,358

Current Obligation: $13,492,358

Contract Characteristics

Cost or Pricing Data: NO

Timeline