DoD awards $57.6M for LITENING Targeting Pod Logistics Support to Northrop Grumman, a sole-source contract
Contract Overview
Contract Amount: $57,607,745 ($57.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2016-12-08
End Date: 2020-12-31
Contract Duration: 1,484 days
Daily Burn Rate: $38.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT FOR LITENING TARGETING POD
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $57.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT FOR LITENING TARGETING POD Key points: 1. Contract awarded to a single, established provider, limiting competitive pricing. 2. Significant funding allocated for contractor logistics support, indicating reliance on specialized services. 3. Long contract duration (2016-2020) suggests a stable, ongoing need. 4. Engineering Services sector (NAICS 541330) is critical for advanced military systems.
Value Assessment
Rating: fair
The contract value of $57.6M over four years for logistics support of targeting pods appears reasonable given the specialized nature of the equipment. However, without competitive bidding, it's difficult to ascertain if this represents the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach bypasses competitive price discovery, potentially leading to higher costs for taxpayers. The justification for sole-source is not provided but likely relates to unique capabilities or existing system integration.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the most cost-effective solution available.
Public Impact
Ensures continued operational readiness of critical Air Force targeting systems. Supports advanced military technology through specialized maintenance and logistics. Potential for cost overruns due to lack of competitive pressure. Impacts the Air Force's ability to maintain and upgrade its sensor capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Lack of transparency on justification for sole-source.
- Long-term contract may not reflect current market prices.
Positive Signals
- Ensures critical system support continuity.
- Leverages established expertise for complex technology.
Sector Analysis
This contract falls within the Engineering Services sector, which is vital for the development, maintenance, and support of complex defense systems. Spending in this area is often high due to the specialized knowledge and technology involved, with benchmarks varying widely based on system complexity and service scope.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation or subcontracting in the provided data, suggesting limited opportunities for small businesses on this specific award.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of the Air Force is responsible for monitoring this contract's performance and expenditures. Further review would be needed to assess the effectiveness of existing oversight mechanisms.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Potential for inflated pricing
- Lack of competitive benchmarking
- Limited transparency on justification
- No indication of small business participation
Tags
engineering-services, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $57.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT FOR LITENING TARGETING POD
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 $57.6 million.
What is the period of performance?
Start: 2016-12-08. End: 2020-12-31.
What was the specific justification for awarding this contract as sole-source, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically involves factors like unique technical capabilities, proprietary technology, or lack of alternative sources. To ensure fair pricing, the government might rely on historical pricing data, independent cost estimates, or price analysis techniques. However, without competition, the potential for inflated costs remains a concern that requires diligent oversight.
How does the cost of this contract compare to similar logistics support contracts for comparable targeting pods, and what is the potential risk of cost overruns?
Benchmarking this contract against similar agreements is challenging without access to detailed cost breakdowns and market data. The risk of cost overruns is elevated in sole-source situations due to the absence of competitive pressure to optimize efficiency and pricing. Regular audits and performance reviews are essential to mitigate this risk.
What is the long-term impact of relying on a single contractor for critical logistics support, particularly concerning technological advancements and potential vendor lock-in?
Long-term reliance on a single contractor can lead to vendor lock-in, making it difficult and costly to switch providers or adopt new technologies. This can stifle innovation and potentially lead to outdated systems if the contractor does not proactively invest in upgrades. It also concentrates risk, as the government becomes highly dependent on one entity's performance and stability.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
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: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $57,607,745
Exercised Options: $57,607,745
Current Obligation: $57,607,745
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852313D0002
IDV Type: IDC
Timeline
Start Date: 2016-12-08
Current End Date: 2020-12-31
Potential End Date: 2020-12-31 00:00:00
Last Modified: 2022-08-08
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