DoD awards $39.4M for LAIRCM AAQ-24 repairs, a sole-source contract to Northrop Grumman

Contract Overview

Contract Amount: $39,396,911 ($39.4M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2019-12-18

End Date: 2024-11-12

Contract Duration: 1,791 days

Daily Burn Rate: $22.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LAIRCM AAQ-24 REPAIRS

Place of Performance

Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $39.4 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: LAIRCM AAQ-24 REPAIRS Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. Limited competition may have resulted in a higher cost than a fully competed contract. 3. The contract duration of 1791 days suggests a long-term need for these repair services. 4. The contract is for repairs to the AN/AAQ-24 Large Aircraft Infrared Countermeasures (LAIRCM) system. 5. The contract is managed by the Defense Contract Management Agency. 6. The contract is a delivery order under a larger contract, indicating phased execution.

Value Assessment

Rating: questionable

The contract's value of $39.4 million for repairs to the LAIRCM system warrants scrutiny due to its sole-source nature. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The fixed-price nature of the contract provides some cost certainty, but the absence of competition limits the government's ability to ensure the best possible value. Further analysis would be needed to compare the unit costs of repairs to historical data or industry averages.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corp, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of multiple bidders significantly limits price discovery and may lead to less favorable pricing for the government compared to a fully competed procurement.

Taxpayer Impact: Taxpayers may be paying a premium for these repair services due to the absence of competitive pressure to drive down costs. The government's ability to negotiate favorable terms is diminished in a sole-source scenario.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating aircraft equipped with the AN/AAQ-24 LAIRCM system, ensuring the continued operational readiness of these critical defense assets. The services delivered include the repair and maintenance of the AN/AAQ-24 LAIRCM system, a vital component for protecting aircraft from missile threats. The contract has a geographic impact primarily within Georgia (ST='GA', SN='GEORGIA'), where the contract is managed or where services may be performed. The contract supports specialized technical roles within the aerospace and defense industry, likely requiring skilled technicians and engineers for the repair and maintenance of advanced electronic systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Lack of transparency in the bidding process makes it difficult to assess true value for money.
Long contract duration (1791 days) could mask inefficiencies or scope creep if not closely monitored.

Positive Signals

Fixed-price contract type provides some cost predictability for the government.
Contract is for essential repair services, ensuring the operational readiness of critical defense systems.
Award to an established contractor with likely expertise in the specific system.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, long product lifecycles, and significant government investment. Contracts for repair and maintenance of complex systems like the AN/AAQ-24 LAIRCM are crucial for sustaining military readiness. Northrop Grumman is a major player in this sector, with extensive experience in aerospace and defense technologies. Spending benchmarks for similar repair and maintenance contracts can vary widely based on system complexity and service scope, but sole-source awards often represent a higher cost per unit compared to competitive procurements.

Small Business Impact

This contract does not appear to have a small business set-aside (SB=false). Given the sole-source nature and the specialized technical requirements for repairing advanced defense systems, it is unlikely that significant subcontracting opportunities for small businesses would be mandated or readily available, unless Northrop Grumman proactively engages them for specific components or services.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded within the contract terms and conditions, including performance metrics and delivery schedules. Transparency may be limited due to the sole-source award, but contract award data is publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

AN/AAQ-24 LAIRCM System Support
Defense Electronic Systems Maintenance
Aerospace Component Repair
Military Aircraft Support Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.4 million to NORTHROP GRUMMAN SYSTEMS CORP. LAIRCM AAQ-24 REPAIRS

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $39.4 million.

What is the period of performance?

Start: 2019-12-18. End: 2024-11-12.

What is the historical spending pattern for LAIRCM AAQ-24 repairs with Northrop Grumman?

Detailed historical spending data for this specific contract line item (LAIRCM AAQ-24 repairs) with Northrop Grumman is not fully available in the provided data snippet. However, the current award of $39.4 million for a duration of 1791 days (approximately 4.9 years) suggests a significant and ongoing investment in maintaining this critical defense system. To understand the full historical pattern, one would need to access contract databases for previous awards related to the AN/AAQ-24 system, analyze trends in repair costs, and assess if this current contract represents an increase or decrease in spending relative to prior periods. The sole-source nature of this award also implies that historical pricing might not be a reliable benchmark if previous awards were competitively sourced.

How does the cost of this contract compare to similar repair contracts for electronic warfare systems?

Direct comparison of this $39.4 million contract for LAIRCM AAQ-24 repairs to 'similar' contracts is challenging without more specific data points. The AN/AAQ-24 is a sophisticated infrared countermeasures system, and its repair costs are influenced by factors such as the complexity of the components, the required diagnostic tools, and the specialized expertise needed. Given this is a sole-source award to Northrop Grumman, it is difficult to establish a competitive benchmark. To perform a robust comparison, one would need to identify contracts for the repair of comparable electronic warfare systems (e.g., other countermeasures, radar systems) awarded under competitive conditions, analyze their total value, duration, and scope of work, and then attempt to normalize for differences in system complexity and market conditions. The absence of competition here suggests potential for higher costs than might be achieved in a more open market.

What are the specific risks associated with a sole-source award for critical defense system repairs?

The primary risk associated with a sole-source award for critical defense system repairs, such as the LAIRCM AAQ-24, is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government has less leverage to negotiate favorable terms and may end up paying more than necessary. Another risk is reduced innovation, as the incumbent contractor may have less incentive to improve efficiency or develop cost-saving solutions. Furthermore, sole-source contracts can sometimes indicate a lack of market readiness or a dependency on a single supplier, which can create supply chain vulnerabilities. Ensuring robust oversight and performance management becomes even more critical in sole-source situations to mitigate these inherent risks and ensure the government receives adequate value for its investment.

What is Northrop Grumman's track record with the AN/AAQ-24 LAIRCM system?

Northrop Grumman Systems Corp is the original manufacturer and a primary contractor for the AN/AAQ-24 Large Aircraft Infrared Countermeasures (LAIRCM) system. Their track record with this system is extensive, as they are responsible for its development, production, and ongoing support. This includes previous contracts for the system's integration onto various military aircraft platforms and subsequent sustainment activities. The current sole-source award for repairs suggests a continued reliance on their specialized knowledge and proprietary data related to the LAIRCM system. While specific performance metrics for past contracts are not detailed here, their long-standing relationship and sole-source status imply a recognized capability and necessity for their continued involvement in maintaining the system's operational readiness.

What is the expected impact of this contract on the operational readiness of affected military aircraft?

This contract is expected to have a positive impact on the operational readiness of military aircraft equipped with the AN/AAQ-24 LAIRCM system. The LAIRCM is a crucial defensive system designed to protect aircraft from infrared-guided missiles. By ensuring the availability of repair and maintenance services for this system, the contract directly contributes to the ability of these aircraft to perform their missions safely and effectively. Timely and proficient repairs will minimize aircraft downtime, ensuring that a greater number of these platforms are mission-capable when needed. This is particularly important for aircraft operating in high-threat environments where countermeasures are essential for survivability.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 101 INDUSTRIAL PARK BLVD, WARNER ROBINS, GA, 31088

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: $39,396,911

Exercised Options: $39,396,911

Current Obligation: $39,396,911

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $2,487,399

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852218D0002

IDV Type: IDC

Timeline