Northrop Grumman awarded $175.6M contract for RAAF C-130J-30 AN/ALQ-251 development, including design, test, and production

Contract Overview

Contract Amount: $175,646,426 ($175.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2025-03-28

End Date: 2029-03-27

Contract Duration: 1,460 days

Daily Burn Rate: $120.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DESIGN, TEST, PRODUCTION, REPAIR, SUPPORT, AND PROGRAM MANAGEMENT TO DEVELOP THE NEW CONFIGURATION AN/ALQ-251 REQUIRED BY THE ROYAL AUSTRALIAN AIR FORCE (RAAF) C-130J-30 PROGRAM. FMS CASE CODES: AT-D-SAI-037; AT-D-SAI-706; AT-D-SAI-004

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $175.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DESIGN, TEST, PRODUCTION, REPAIR, SUPPORT, AND PROGRAM MANAGEMENT TO DEVELOP THE NEW CONFIGURATION AN/ALQ-251 REQUIRED BY THE ROYAL AUSTRALIAN AIR FORCE (RAAF) C-130J-30 PROGRAM. FMS CASE CODES: AT-D-SAI-037; AT-D-SAI-706; AT-D-SAI-004 Key points: 1. Contract focuses on developing a new electronic warfare configuration for the Royal Australian Air Force's C-130J-30 aircraft. 2. The award includes comprehensive services from design and testing through production, repair, support, and program management. 3. This is a Foreign Military Sales (FMS) case, indicating international cooperation and defense support. 4. The contract's cost-plus-fixed-fee structure suggests potential for cost overruns, requiring close oversight. 5. The duration of nearly four years indicates a significant, long-term development effort. 6. The specific nature of the AN/ALQ-251 system points to advanced electronic warfare capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the AN/ALQ-251 system's capabilities and development costs. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D, carries inherent risks of cost escalation. The total value of over $175 million for a specialized electronic warfare system development over four years appears within a reasonable range for such advanced defense technology, but a detailed cost breakdown and comparison to similar EW system development contracts would be necessary for a more definitive assessment of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded on a sole-source basis. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of a required technology. The lack of competition means that pricing and terms were negotiated directly with Northrop Grumman, potentially limiting opportunities for cost savings that could arise from a competitive bidding process.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to leverage competitive pressures to drive down costs. The government relies on negotiation and oversight to ensure a fair price, but the absence of competing offers inherently removes a key mechanism for price discovery and potential savings.

Public Impact

The primary beneficiaries are the Royal Australian Air Force (RAAF), which will receive an upgraded electronic warfare capability for its C-130J-30 aircraft. The contract delivers advanced electronic warfare system development, including design, testing, production, and ongoing support. The geographic impact is primarily in Australia, with the system intended for deployment on RAAF aircraft. Workforce implications include specialized engineering, testing, and manufacturing roles within Northrop Grumman and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure introduces risk of cost overruns.
Sole-source award limits price discovery and potential savings.
Complexity of advanced electronic warfare systems can lead to unforeseen development challenges.
Reliance on a single contractor for critical defense technology.

Positive Signals

Award to a known defense contractor with established expertise in aerospace and electronic systems.
Clear definition of services from design through production and support.
Long-term contract duration allows for thorough development and integration.
Supports a key ally (Australia) through Foreign Military Sales.

Sector Analysis

The defense electronics sector is characterized by high R&D investment, long product lifecycles, and significant technological complexity. Contracts for electronic warfare systems are a critical component of this sector, aimed at providing aircraft with protection against threats. The market is dominated by a few large prime contractors, including Northrop Grumman, who possess the specialized knowledge and facilities required. Spending in this area is driven by evolving threat landscapes and the need for continuous technological advancement, with comparable contracts often involving substantial multi-year commitments and values in the tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Northrop Grumman, as a large prime contractor, is expected to manage the subcontracting process. While specific subcontracting goals are not detailed here, large defense contracts often include provisions for small business participation to foster innovation and distribute economic benefits. The impact on the small business ecosystem would depend on the extent to which Northrop Grumman engages small businesses for specialized components or services related to the AN/ALQ-251 system.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Air Force and the Department of Defense's contracting and program management offices. Given the FMS nature, there will also be coordination with Australian defense procurement authorities. Accountability measures will be tied to contract milestones, performance metrics, and adherence to the cost-plus-fixed-fee agreement. Transparency is generally limited for sole-source defense contracts, especially those involving sensitive technologies, but reporting requirements will be stipulated within the contract terms.

Related Government Programs

AN/ALQ Electronic Warfare Systems
C-130J Super Hercules Program
Foreign Military Sales (FMS)
Department of Defense Engineering Services
Aerospace Electronic Systems Development

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Long contract duration
Advanced technology development

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $175.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DESIGN, TEST, PRODUCTION, REPAIR, SUPPORT, AND PROGRAM MANAGEMENT TO DEVELOP THE NEW CONFIGURATION AN/ALQ-251 REQUIRED BY THE ROYAL AUSTRALIAN AIR FORCE (RAAF) C-130J-30 PROGRAM. FMS CASE CODES: AT-D-SAI-037; AT-D-SAI-706; AT-D-SAI-004

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 $175.6 million.

What is the period of performance?

Start: 2025-03-28. End: 2029-03-27.

What is the specific threat environment the AN/ALQ-251 system is designed to counter?

The specific threat environment the AN/ALQ-251 system is designed to counter is not detailed in the provided data. However, electronic warfare (EW) systems generally aim to detect, identify, and protect aircraft from radar-guided missiles, enemy radar surveillance, and other electromagnetic threats. The AN/ALQ designation suggests it is an airborne electronic warfare system. Given its integration with the C-130J-30, a tactical transport aircraft, the system likely focuses on self-protection against threats encountered during transport missions, such as air-to-air or surface-to-air missile threats, and potentially electronic intelligence gathering. The Royal Australian Air Force's operational needs and the evolving regional threat landscape would dictate the precise capabilities and targets of this system.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar R&D projects?

The Cost-Plus-Fixed-Fee (CPFF) structure is a common contract type for research and development (R&D) and complex system development where the scope of work or final costs are uncertain at the outset. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the contractor agrees to a set price regardless of actual costs, offering greater cost certainty to the buyer but potentially higher risk for the contractor. For R&D, CPFF is often preferred because it allows flexibility to adapt to technical challenges and discoveries without constant renegotiation of the price. However, it shifts cost risk to the government, necessitating robust oversight to control expenditures and ensure the fixed fee remains reasonable relative to the effort.

What is Northrop Grumman's track record with the C-130J platform and similar electronic warfare systems?

Northrop Grumman has a significant and established track record with the C-130J platform and in the development of advanced electronic warfare (EW) systems. The company is a major defense contractor with extensive experience in aerospace systems integration, avionics, and electronic warfare solutions across various aircraft platforms. They have been involved in upgrades and sustainment for numerous military aircraft, including transport and tactical platforms. Their portfolio includes a range of EW systems such as radar warning receivers, jammers, and countermeasures. While specific details on their involvement with the AN/ALQ-251 system prior to this award are not provided, their broad expertise in both aircraft systems and EW technology positions them as a capable provider for this type of specialized development contract.

What are the potential risks associated with the long duration (nearly 4 years) of this development contract?

The nearly four-year duration of this development contract presents several potential risks. Firstly, technological obsolescence is a concern; the threat landscape and available countermeasures can evolve rapidly, potentially making the developed system less effective by the time it is fully fielded. Secondly, program execution risks increase with duration; there's a higher chance of encountering unforeseen technical challenges, supply chain disruptions, or personnel changes that could impact timelines and costs. Thirdly, cost control becomes more challenging over extended periods, especially with a CPFF structure, as cumulative cost growth can be significant. Finally, maintaining consistent program focus and stakeholder alignment over such a long timeframe requires sustained management effort and clear communication channels.

How does this contract fit into the broader context of US-Australia defense cooperation?

This contract fits squarely within the broader context of robust US-Australia defense cooperation, specifically through the Foreign Military Sales (FMS) program. The FMS program facilitates the transfer of defense articles, services, and training from the US to allied nations, strengthening their military capabilities and interoperability with US forces. By providing Australia with an advanced electronic warfare system for its C-130J-30 aircraft, the US is enhancing a key ally's operational effectiveness and survivability. This type of collaboration is a cornerstone of the US security strategy in the Indo-Pacific region, promoting stability and collective security by ensuring partners have access to cutting-edge defense technology and support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA852324R0004

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008

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: $175,646,426

Exercised Options: $175,646,426

Current Obligation: $175,646,426

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $190,356

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline