JSTARS Program Support for E-8C awarded to Northrop Grumman for over $26.9 million

Contract Overview

Contract Amount: $26,948,614 ($26.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-11-01

End Date: 2021-02-18

Contract Duration: 475 days

Daily Burn Rate: $56.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JSTARS PROGRAM SUPPORT OF THE E-8C

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $26.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JSTARS PROGRAM SUPPORT OF THE E-8C Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Engineering services are critical for maintaining complex military aircraft. 3. Contract duration of 475 days suggests a focused scope of work. 4. The contract is a delivery order, indicating it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. Northrop Grumman is a major defense contractor with extensive experience in aerospace. 6. The fixed-price contract type shifts some risk to the contractor. 7. Geographic location in Florida may indicate specific operational or maintenance facilities.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the parent IDIQ contract's terms and the specific services rendered. However, the total award amount of over $26.9 million for engineering services over approximately 16 months suggests a significant investment. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money. Comparisons to similar sole-source engineering support contracts for specialized military platforms would be necessary for a more robust value assessment.

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 potential bidders. This approach is typically used when only one contractor possesses the necessary specialized knowledge, technology, or capability to perform the required services. While it ensures access to specific expertise, it bypasses the competitive process that could potentially drive down costs and encourage innovation.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the benefit of competition in driving down prices is lost. It also raises questions about whether opportunities for other qualified businesses were overlooked.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the E-8C Joint Surveillance Target Attack Radar System (JSTARS) aircraft. The services delivered are crucial for the continued operational readiness and effectiveness of the E-8C platform. The geographic impact is primarily linked to the E-8C's operational bases and maintenance facilities, likely within Florida. Workforce implications include specialized engineering and technical roles required for aircraft support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs than a competed contract.
Sole-source nature raises concerns about potential lack of innovation or efficiency improvements.
Dependence on a single contractor for critical support could pose long-term strategic risks.

Positive Signals

Award to an experienced incumbent contractor like Northrop Grumman suggests continuity of operations.
Fixed-price contract type provides cost certainty for the government.
Specific engineering expertise is likely required, justifying a specialized award.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically supporting intelligence, surveillance, and reconnaissance (ISR) platforms. The market for specialized engineering and sustainment services for advanced military aircraft is dominated by a few large, established defense contractors. Spending in this area is driven by the need to maintain the operational readiness of aging fleets and integrate new technologies. Comparable spending benchmarks would involve looking at other sustainment contracts for similar high-value military assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, Northrop Grumman, is a large aerospace and defense company. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is likely minimal, though large prime contractors often engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. As a delivery order under a larger contract, its oversight is integrated into the broader contract management framework. Transparency is limited due to the sole-source nature and the classification of defense-related contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

E-8C JSTARS Program
Aerospace Engineering Services
Defense Contractor Support
Intelligence, Surveillance, and Reconnaissance (ISR) Platforms
Military Aircraft Sustainment

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns (mitigated by FFP but still a risk)
Dependence on single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JSTARS PROGRAM SUPPORT OF THE E-8C

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 $26.9 million.

What is the period of performance?

Start: 2019-11-01. End: 2021-02-18.

What is the track record of Northrop Grumman Systems Corporation in supporting the JSTARS program or similar ISR platforms?

Northrop Grumman has a long-standing history with the JSTARS program, serving as the prime contractor for the aircraft's development and sustainment. Their extensive experience includes systems integration, avionics, and overall platform support for complex military aircraft. This deep institutional knowledge and established relationship with the platform are likely key factors in their continued sole-source awards for support services. Their broader portfolio includes numerous other advanced aerospace and defense programs, demonstrating a consistent capability in delivering sophisticated engineering and technical solutions for government clients.

How does the pricing of this contract compare to similar engineering support contracts for specialized military aircraft?

Direct comparison of pricing for this specific delivery order is difficult without access to the parent IDIQ contract details and a comprehensive market analysis of comparable sole-source engineering support for similar ISR platforms. However, given the sole-source nature, the pricing may not reflect the full benefit of competitive bidding. Benchmarking would require analyzing the labor rates, overhead, and profit margins against industry standards for highly specialized defense engineering services. The fixed-price nature provides some cost certainty, but the absence of competition is a primary factor limiting a definitive value-for-money assessment.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with this sole-source award include potential for higher costs compared to a competitive procurement, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market validation for the proposed pricing. There's also a strategic risk of over-reliance on a single provider for critical support, which could lead to vulnerabilities if the contractor faces financial difficulties or changes its business focus. Furthermore, it limits opportunities for other capable small and large businesses to compete for and gain experience on this important defense program.

How effective is the JSTARS program, and how does this contract contribute to its overall effectiveness?

The JSTARS program is a critical component of U.S. military intelligence, surveillance, and reconnaissance capabilities, providing ground moving target indication (GMTI) and battlefield management. This contract directly contributes to the program's effectiveness by ensuring the continued operational readiness and technical integrity of the E-8C aircraft. The engineering services provided are essential for maintaining complex avionics, software, and airframe systems, enabling the platform to perform its vital missions in support of combatant commanders. Without such support, the platform's availability and performance would degrade.

What are the historical spending patterns for JSTARS program support, and how does this award fit within that trend?

Historical spending on the JSTARS program, particularly for sustainment and support services, has been substantial due to the complexity and operational demands of the E-8C aircraft. Northrop Grumman, as the prime contractor, has consistently received significant contract awards for these services over the program's lifecycle. This $26.9 million delivery order is likely a component of ongoing, multi-year sustainment efforts. Analyzing historical data would reveal trends in annual spending, the proportion allocated to engineering services versus hardware, and the frequency of sole-source awards for specialized support, indicating a pattern of reliance on incumbent expertise.

What is the significance of the contract type (Firm Fixed Price) in managing costs and risks for this engineering service?

The Firm Fixed Price (FFP) contract type is significant because it establishes a ceiling price that the contractor must adhere to, regardless of their actual costs. This shifts the primary risk of cost overruns to Northrop Grumman. For the government, it provides a high degree of cost certainty, making budgeting more predictable. While FFP is generally preferred for cost control, its effectiveness in this sole-source context depends heavily on the accuracy of the initial cost estimates and the contractor's ability to manage their internal expenses efficiently. It incentivizes the contractor to control costs to maximize profit.

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: $48,204,348

Exercised Options: $48,204,348

Current Obligation: $26,948,614

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $11,216,411

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