DoD's $273M JSTARS E-8C Support Contract Awarded to Northrop Grumman
Contract Overview
Contract Amount: $273,085,889 ($273.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2020-11-01
End Date: 2023-05-31
Contract Duration: 941 days
Daily Burn Rate: $290.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
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 $273.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JSTARS PROGRAM SUPPORT OF THE E-8C Key points: 1. Significant contract value for specialized engineering services. 2. Sole-source award raises questions about competition and potential cost savings. 3. Risk of vendor lock-in and limited market competition. 4. Focus on critical defense intelligence, surveillance, and reconnaissance capabilities.
Value Assessment
Rating: questionable
The contract is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar specialized engineering services is difficult without more data on the specific tasks performed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs compared to a competitive process.
Taxpayer Impact: Without competition, taxpayers may be paying a premium for these essential engineering services, as there was no market pressure to drive down costs.
Public Impact
Ensures continued operational readiness of the E-8C JSTARS fleet. Supports critical intelligence, surveillance, and reconnaissance missions for national security. Potential for cost inefficiencies due to sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Essential defense capability
- Experienced contractor
Sector Analysis
This contract falls under Engineering Services, a broad category. Defense sector spending on specialized ISR platforms like JSTARS is substantial, often involving complex, long-term support contracts.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation and does not indicate any subcontracting to small businesses. This represents a missed opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. DoD should provide justification for the lack of competition.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited small business participation
Tags
engineering-services, department-of-defense, fl, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $273.1 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $273.1 million.
What is the period of performance?
Start: 2020-11-01. End: 2023-05-31.
What specific engineering services are included in this contract, and how do they contribute to the JSTARS platform's effectiveness?
This contract covers a range of engineering services essential for the JSTARS E-8C aircraft, including systems engineering, software development, and sustainment support. These services are critical for maintaining the platform's intelligence, surveillance, and reconnaissance capabilities, ensuring its readiness for complex military operations and providing vital battlefield information.
What are the primary risks associated with awarding this contract on a sole-source basis?
The primary risks of a sole-source award include a lack of competitive pricing, potentially leading to higher costs for taxpayers. It also reduces the incentive for the contractor to innovate or improve efficiency, as there is no direct competition. Furthermore, it can create vendor lock-in, making it difficult to switch providers or negotiate better terms in the future.
How does the Cost Plus Fixed Fee (CPFF) contract type impact the overall value and accountability for this expenditure?
The CPFF structure aims to provide a degree of cost certainty by capping the contractor's fee, but it still allows for the reimbursement of actual costs incurred. This can incentivize cost overruns if not rigorously monitored. Accountability relies heavily on the government's ability to audit costs and ensure that only reasonable and necessary expenses are reimbursed, which can be challenging with complex engineering services.
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32902
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $502,873,516
Exercised Options: $502,873,516
Current Obligation: $273,085,889
Subaward Activity
Number of Subawards: 360
Total Subaward Amount: $139,196,442
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
Start Date: 2020-11-01
Current End Date: 2023-05-31
Potential End Date: 2023-05-31 00:00:00
Last Modified: 2023-06-08
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