DoD awards $17.7M to Northrop Grumman for JSTARS E-8 fleet support, a sole-source contract

Contract Overview

Contract Amount: $17,729,021 ($17.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2018-09-27

End Date: 2021-07-31

Contract Duration: 1,038 days

Daily Burn Rate: $17.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SUPPORT OF JSTARS E-8 FLEET

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SUPPORT OF JSTARS E-8 FLEET Key points: 1. Contract awarded on a firm-fixed-price basis, providing cost certainty for the government. 2. The contract duration of 1038 days indicates a significant, long-term support requirement. 3. Sole-source award suggests potential limitations in market competition for these specialized services. 4. The engineering services category (NAICS 541330) points to complex technical and design support. 5. Awarded by the Defense Contract Management Agency, indicating a focus on defense readiness. 6. The contract was not competed, raising questions about potential cost efficiencies from broader bidding.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable bids. The firm-fixed-price structure offers some cost control. However, the absence of competition means the government may not have achieved the lowest possible price. Further analysis would require understanding the specific technical requirements and the market for such specialized engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary unique capabilities, technology, or security clearances. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed procurement.

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

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the JSTARS E-8 fleet, ensuring continued operational readiness. Services delivered include critical engineering support essential for the maintenance and sustainment of advanced surveillance aircraft. The geographic impact is primarily within the United States, supporting defense operations and maintenance facilities. Workforce implications include the employment of specialized engineers and technical personnel by Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Potential for vendor lock-in due to specialized nature of services.
Limited opportunities for small businesses to participate in this specific contract.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Northrop Grumman is a major defense contractor with established expertise in aerospace and defense systems.
Contract supports a critical intelligence, surveillance, and reconnaissance (ISR) platform for national security.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for military aircraft. The market for specialized support of advanced platforms like the JSTARS E-8 is often concentrated among a few large defense contractors. Spending in this area is driven by national security requirements and the need to maintain aging but critical defense assets.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, opportunities for small businesses to directly participate are likely limited unless they are part of Northrop Grumman's supply chain for this specific effort.

Oversight & Accountability

Oversight is likely conducted by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contract compliance and performance. Accountability measures would be tied to the firm-fixed-price terms and delivery schedules. Transparency is limited due to the sole-source nature of the award, with justifications typically being internal to the agency.

Related Government Programs

JSTARS Program Support
Airborne Surveillance and Reconnaissance Systems
Aerospace Engineering Services
Defense Logistics and Sustainment

Risk Flags

Sole-source award may lead to higher costs.
Lack of competition limits price discovery.
Potential for contractor dependency (vendor lock-in).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SUPPORT OF JSTARS E-8 FLEET

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2018-09-27. End: 2021-07-31.

What is the specific justification for awarding this contract on a sole-source basis to Northrop Grumman?

The provided data indicates the contract was 'NOT COMPETED' and is 'SOLE SOURCE'. While the specific justification is not detailed, common reasons for sole-source awards in defense contracting include unique technical capabilities, proprietary technology, essential integration with existing systems, or a lack of qualified alternative sources. For the JSTARS E-8 fleet, Northrop Grumman, as a major defense contractor with extensive experience in aerospace and electronic systems, likely possesses specialized knowledge and facilities critical for supporting this complex platform. The justification would typically involve demonstrating that only Northrop Grumman can meet the stringent requirements for maintaining and upgrading the E-8's sophisticated mission systems and airframe, ensuring continued operational effectiveness and national security.

How does the $17.7 million contract value compare to historical spending on JSTARS E-8 fleet support?

The provided data shows a single contract award of $17,729,020.58 for support of the JSTARS E-8 fleet from September 27, 2018, to July 31, 2021. To compare this to historical spending, one would need access to a broader dataset of all contracts awarded for JSTARS E-8 support over multiple fiscal years. This single award represents a portion of the total lifecycle costs for the fleet. Without data on previous or subsequent contracts, or the total program budget, it's difficult to ascertain if $17.7 million is high, low, or average. Analysis would require examining annual spending trends, contract types (e.g., sustainment, upgrades, training), and the number of contracts awarded over time to understand the overall financial commitment to the JSTARS E-8 program.

What are the key performance indicators (KPIs) or metrics used to assess Northrop Grumman's performance under this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or metrics for this contract. However, for a firm-fixed-price contract supporting a critical defense asset like the JSTARS E-8 fleet, performance is typically evaluated based on adherence to delivery schedules, quality of engineering services provided, technical performance of supported systems, and compliance with contractual requirements. The Defense Contract Management Agency (DCMA) would likely monitor these aspects. Specific metrics could include aircraft availability rates, mission system uptime, successful completion of maintenance and repair tasks, and timely delivery of engineering reports or solutions. Contractual clauses would define remedies for non-performance, such as liquidated damages or termination.

What is the potential impact of this contract on the future of the JSTARS E-8 fleet?

This contract, valued at approximately $17.7 million and spanning nearly three years, directly supports the continued operational readiness and sustainment of the JSTARS E-8 fleet. By ensuring the availability of critical engineering services, it helps maintain the fleet's capability to perform its intelligence, surveillance, and reconnaissance (ISR) mission. The nature of the support provided under this contract could influence the fleet's operational lifespan and its effectiveness in current and future military operations. However, the JSTARS program has faced discussions regarding its future and potential replacement by newer technologies, so this contract represents ongoing support rather than a definitive statement on the fleet's long-term strategic direction.

Are there any identified risks associated with Northrop Grumman's performance or the nature of this sole-source contract?

Yes, there are potential risks associated with this contract. The primary risk stems from its sole-source nature. Without competition, there's a reduced incentive for the contractor to optimize costs, potentially leading to higher prices than if the contract were competed. There's also a risk of vendor lock-in, where the government becomes dependent on Northrop Grumman's specialized knowledge, making it difficult to switch providers in the future. Performance risks include potential delays in service delivery, quality issues with the engineering support, or unforeseen technical challenges that could impact the JSTARS E-8 fleet's operational readiness. The firm-fixed-price structure mitigates cost overrun risks for the government but places the risk of performance failures or cost overruns on the contractor.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 W NASA BLVD, MELBOURNE, FL, 32902

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,768,173

Exercised Options: $17,729,021

Current Obligation: $17,729,021

Actual Outlays: $323,716

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $17,328,892

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F0960300D0210

IDV Type: IDC

Timeline