DoD Awards $44.2M for U-2 Aircraft Support to Northrop Grumman, Sole-Source Contract
Contract Overview
Contract Amount: $44,194,973 ($44.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2022-06-23
End Date: 2025-08-30
Contract Duration: 1,164 days
Daily Burn Rate: $38.0K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: U-2 AN/ASQ-230 AND ASSOCIATED DISTRIBUTED COMMON GROUND STATIONS SUPPORT AND SUSTAINMENT
Place of Performance
Location: MCCLELLAN, SACRAMENTO County, CALIFORNIA, 95652
Plain-Language Summary
Department of Defense obligated $44.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: U-2 AN/ASQ-230 AND ASSOCIATED DISTRIBUTED COMMON GROUND STATIONS SUPPORT AND SUSTAINMENT Key points: 1. Contract awarded to a single, established provider for specialized U-2 aircraft systems. 2. High value contract for critical intelligence, surveillance, and reconnaissance (ISR) platform. 3. Sole-source award raises questions about competition and potential price efficiencies. 4. Services fall under professional, scientific, and technical services, with IT implications for ground stations.
Value Assessment
Rating: fair
The contract value of $44.2 million for support and sustainment of the U-2's distributed common ground stations appears reasonable given the specialized nature of the aircraft and its systems. However, without competitive bidding, it's difficult to benchmark against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This limits price discovery and may result in higher costs than if multiple vendors had competed for the work.
Taxpayer Impact: Taxpayer funds are being used for a sole-source contract, potentially foregoing cost savings that could have been achieved through a competitive bidding process.
Public Impact
Ensures continued operational readiness of the U-2 reconnaissance aircraft, vital for national security. Supports advanced ground station technology essential for processing and disseminating intelligence data. Potential for increased costs due to lack of competition impacts overall defense budget efficiency. Sustains a critical, albeit aging, ISR platform within the Air Force's inventory.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Aging aircraft platform
Positive Signals
- Critical national security asset
- Specialized technical expertise required
- Long-term sustainment plan
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically supporting aerospace and defense systems. Spending benchmarks for similar sole-source sustainment contracts for specialized military platforms can vary widely, but typically involve significant investment due to unique requirements.
Small Business Impact
This contract was awarded to a large corporation, Northrop Grumman Systems Corporation, and does not appear to include provisions for small business participation. The specialized nature of the U-2 support likely limits opportunities for small businesses in this specific contract.
Oversight & Accountability
The Department of the Air Force is responsible for oversight of this contract. Given the sole-source nature, robust oversight is crucial to ensure fair pricing and effective service delivery to prevent potential cost overruns.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for overpayment due to sole-source award.
- Risk of cost overruns in a cost-plus contract.
- Dependence on a single contractor for critical systems.
- Aging platform may require increasing sustainment costs.
- Limited transparency into pricing without competition.
Tags
all-other-professional-scientific-and-te, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. U-2 AN/ASQ-230 AND ASSOCIATED DISTRIBUTED COMMON GROUND STATIONS SUPPORT AND SUSTAINMENT
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 $44.2 million.
What is the period of performance?
Start: 2022-06-23. End: 2025-08-30.
What is the justification for the sole-source award, and have alternative competitive strategies been considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems. For the U-2's specialized ground stations, it's plausible that Northrop Grumman possesses unique expertise. However, a thorough review should confirm that competitive avenues were explored and deemed less viable or more costly in the long run.
How is the cost-plus-fixed-fee structure being managed to ensure value for money given the lack of competition?
Cost-plus-fixed-fee contracts require diligent oversight to manage costs effectively. The Air Force must closely monitor Northrop Grumman's incurred costs, ensure they are reasonable and allocable, and that the fixed fee remains appropriate for the scope of work. Regular audits and performance reviews are essential to mitigate risks of cost escalation.
What is the long-term strategy for U-2 sustainment and potential replacement, and how does this contract align with it?
This contract provides sustainment through August 2025. The U-2 is an aging platform, and the Air Force is evaluating future ISR capabilities. This contract ensures current operational readiness but doesn't address the long-term strategic replacement of the U-2 fleet, which requires separate planning and investment decisions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 6379 SAN IGNACIO AVE, SAN JOSE, CA, 95119
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: $49,583,660
Exercised Options: $49,583,660
Current Obligation: $44,194,973
Subaward Activity
Number of Subawards: 33
Total Subaward Amount: $3,876,415
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852822D0013
IDV Type: IDC
Timeline
Start Date: 2022-06-23
Current End Date: 2025-08-30
Potential End Date: 2025-08-30 00:00:00
Last Modified: 2025-06-16
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