JSTARS Program Support for E-8C Aircraft Awarded to Northrop Grumman for $27.9 Million
Contract Overview
Contract Amount: $27,933,881 ($27.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2021-11-01
End Date: 2022-10-31
Contract Duration: 364 days
Daily Burn Rate: $76.7K/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 $27.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JSTARS PROGRAM SUPPORT OF THE E-8C Key points: 1. Contract awarded for engineering services related to the JSTARS program. 2. Sole-source award indicates potential lack of market competition for these specific services. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Contract duration of 364 days suggests a focused scope of work. 5. Awarded by the Department of the Air Force, highlighting a critical defense capability. 6. Geographic location of performance in Florida may indicate specialized facilities or personnel.
Value Assessment
Rating: fair
The contract value of $27.9 million for a one-year support period for the JSTARS program appears to be within a reasonable range for specialized engineering services. However, without direct comparable contract data for similar JSTARS support or detailed cost breakdowns, a precise value-for-money assessment is challenging. The firm fixed-price structure suggests the government has negotiated a ceiling, but the absence of competition makes benchmarking against market rates difficult. Further analysis of the contractor's historical performance and pricing on similar defense contracts would be beneficial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when there is insufficient time to conduct a competitive procurement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bidders had participated.
Taxpayer Impact: Sole-source awards limit opportunities for other businesses and can result in taxpayers paying a premium due to the absence of competitive pressure on pricing.
Public Impact
The primary beneficiaries are the U.S. Air Force and the JSTARS program, ensuring continued operational readiness of the E-8C aircraft. Services delivered include critical engineering support essential for maintaining and potentially upgrading the JSTARS fleet. Geographic impact is concentrated in Florida, where the contractor's facilities are located, potentially supporting local jobs. Workforce implications include the utilization of specialized engineers and technical personnel within Northrop Grumman.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition, potentially increasing costs for taxpayers.
- Lack of transparency in the justification for sole-source procurement.
- Potential for cost overruns if not closely managed due to lack of competitive pressure.
Positive Signals
- Firm fixed-price contract shifts risk to the contractor.
- Contract supports a critical intelligence, surveillance, and reconnaissance (ISR) platform.
- Northrop Grumman is an established defense contractor with experience in complex systems.
Sector Analysis
The aerospace and defense sector is characterized by high R&D costs, long product development cycles, and significant government procurement. The JSTARS program falls within this sector, specifically supporting intelligence, surveillance, and reconnaissance (ISR) capabilities. Spending in this area is crucial for national security. Comparable spending benchmarks would involve analyzing other large, complex aircraft support contracts within the DoD, which often run into tens or hundreds of millions of dollars annually.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. As a sole-source award to a large prime contractor, it is unlikely to directly benefit the small business ecosystem unless Northrop Grumman voluntarily includes them in its supply chain. Further investigation into subcontracting plans would be necessary to determine any indirect impact.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is limited due to the sole-source nature of the award; however, contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- JSTARS Program
- E-8C Aircraft
- Airborne ISR Platforms
- Defense Engineering Services
- Northrop Grumman Defense Contracts
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for unbenchmarked pricing due to lack of competition.
Tags
defense, department-of-defense, air-force, jstars-program, e-8c, engineering-services, northrop-grumman, sole-source, firm-fixed-price, intelligence-surveillance-reconnaissance, aircraft-support, florida
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.9 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $27.9 million.
What is the period of performance?
Start: 2021-11-01. End: 2022-10-31.
What is the track record of Northrop Grumman Systems Corporation in supporting complex defense aircraft programs like JSTARS?
Northrop Grumman Systems Corporation has a long and extensive track record in supporting complex defense aircraft programs, including intelligence, surveillance, and reconnaissance (ISR) platforms. They are a major defense contractor involved in the development, manufacturing, and sustainment of various military systems. For the JSTARS program specifically, Northrop Grumman has been a key player, often involved in the integration, sustainment, and upgrade of the aircraft's mission systems. Their experience encompasses managing large-scale engineering efforts, ensuring platform availability, and incorporating technological advancements. This history suggests a deep understanding of the JSTARS platform's unique requirements and operational context, which likely contributed to their selection for this sole-source support contract.
How does the $27.9 million award compare to historical spending on JSTARS program support?
The $27.9 million award for one year of JSTARS program support represents a significant but not necessarily anomalous expenditure for a complex defense platform. Historical spending on JSTARS has varied year-to-year, influenced by modernization efforts, sustainment needs, and operational tempo. Annual spending on the program has often been in the tens to hundreds of millions of dollars when considering all aspects, including aircraft modifications, sensor upgrades, and operational support. This specific award for engineering services appears to be a component of the broader JSTARS sustainment strategy. To provide a precise comparison, one would need to analyze historical contract data for similar engineering and technical support services specifically for the JSTARS E-8C fleet over multiple fiscal years.
What are the primary risks associated with this sole-source contract for JSTARS support?
The primary risks associated with this sole-source contract are centered around cost and competition. Without competitive bidding, there is an inherent risk that the government may not achieve the best possible price, as market pressures are absent. This could lead to higher costs for taxpayers. Another risk is contractor performance; while Northrop Grumman is experienced, a sole-source award can sometimes reduce the urgency for a contractor to innovate or optimize efficiency compared to a competitive environment. Furthermore, reliance on a single source can create vulnerabilities if the contractor faces financial difficulties, operational issues, or if their proprietary knowledge becomes a bottleneck for future program developments or transitions.
How effective is the firm fixed-price contract type in managing costs for specialized engineering services like this?
The firm fixed-price (FFP) contract type is generally considered effective in managing costs for specialized engineering services, especially when the scope of work is well-defined. Under an FFP contract, the contractor assumes the majority of the cost risk, agreeing to a set price regardless of their actual costs incurred. This incentivizes the contractor to control expenses and perform efficiently to maximize profit. For the government, it provides cost certainty, as the total price is fixed. However, the effectiveness of FFP relies heavily on the clarity and completeness of the contract's specifications. If the scope is ambiguous or subject to significant change, it can lead to costly change orders or disputes, diminishing the cost-control benefits.
What are the implications of the contract being performed in Florida (st: FL)?
The implication of the contract being performed in Florida (st: FL) primarily relates to the geographic distribution of defense spending and potential workforce impacts. It suggests that Northrop Grumman has facilities or personnel in Florida capable of providing the required engineering services for the JSTARS program. This can contribute to the local economy in Florida through job creation and the utilization of local resources. From a program perspective, it might indicate the location of key JSTARS program management, engineering support centers, or maintenance facilities. It could also influence logistical considerations for any on-site work or collaboration required with other entities operating within the state.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT/REPAIR SHOP EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
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: $48,536,432
Exercised Options: $48,536,432
Current Obligation: $27,933,881
Subaward Activity
Number of Subawards: 59
Total Subaward Amount: $58,020,769
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: 2021-11-01
Current End Date: 2022-10-31
Potential End Date: 2022-10-31 00:00:00
Last Modified: 2022-09-15
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