DoD's $44.4M LAIRCM Repair Contract Awarded to Northrop Grumman Raises Oversight Questions
Contract Overview
Contract Amount: $44,386,624 ($44.4M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2021-12-23
End Date: 2022-12-14
Contract Duration: 356 days
Daily Burn Rate: $124.7K/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 $44.4 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: LAIRCM AAQ-24 REPAIRS Key points: 1. Significant contract value for specialized electronic repair services. 2. Sole-source award to Northrop Grumman limits competitive pricing. 3. Potential for cost overruns due to lack of competition. 4. Focus on critical aircraft defense systems highlights national security implications.
Value Assessment
Rating: questionable
The $44.4M award for LAIRCM repairs lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, assessing if this price is optimal or inflated is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman, was considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these critical repair services.
Public Impact
Taxpayers may be overpaying for essential aircraft defense system repairs. Lack of transparency in the procurement process raises concerns about accountability. The sole-source nature could stifle innovation in the repair and maintenance sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
- Limited oversight indicated
Positive Signals
- Critical defense system maintenance
- Contract awarded to established defense contractor
Sector Analysis
This contract falls under the Other Electronic and Precision Equipment Repair and Maintenance sector, specifically for the Air Force's LAIRCM system. Spending in this niche area is often characterized by high technical requirements and limited vendor pools, making competitive bidding challenging but crucial.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corp, a large prime contractor. There is no indication that small businesses were involved in this specific sole-source award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award warrants closer scrutiny regarding the justification for not pursuing competitive bidding. Enhanced oversight is needed to ensure fair pricing and prevent potential waste.
Related Government Programs
- Other Electronic and Precision Equipment Repair and Maintenance
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Potential for cost overruns and taxpayer overpayment.
- Limited transparency in the procurement process.
- No clear indication of small business participation.
- Reliance on a single contractor for critical system maintenance.
Tags
other-electronic-and-precision-equipment, department-of-defense, ga, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.4 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $44.4 million.
What is the period of performance?
Start: 2021-12-23. End: 2022-12-14.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. For this LAIRCM repair contract, the Department of Defense would need to provide detailed documentation proving that Northrop Grumman was the only entity capable of performing the required specialized repairs within the given timeframe and specifications, thereby precluding any competitive bidding process.
How does the $44.4M cost compare to similar repair contracts for advanced electronic systems, and what cost controls are in place?
Without access to comparable sole-source or competitively bid contracts for similar advanced electronic systems, a direct cost comparison is difficult. However, the absence of competition raises concerns about potential price inflation. Robust cost-reimbursement controls, detailed auditing, and performance metrics should be rigorously applied by the Air Force to mitigate risks associated with this sole-source award.
What is the long-term strategy for ensuring cost-effective maintenance and repair of the LAIRCM system, considering this sole-source award?
The long-term strategy should involve exploring options to foster competition for future LAIRCM repair needs, potentially through technology transfer, contractor debriefings, or by encouraging other qualified firms to develop capabilities. The Department of Defense should also investigate performance-based contracts or service-level agreements that incentivize efficiency and cost savings over the system's lifecycle.
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: $44,386,624
Exercised Options: $44,386,624
Current Obligation: $44,386,624
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852218D0002
IDV Type: IDC
Timeline
Start Date: 2021-12-23
Current End Date: 2022-12-14
Potential End Date: 2022-12-14 00:00:00
Last Modified: 2022-03-31
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