DoD's $53M contract for advanced targeting pods awarded to Northrop Grumman, with limited competition

Contract Overview

Contract Amount: $53,074,980 ($53.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-01-01

End Date: 2022-05-31

Contract Duration: 1,246 days

Daily Burn Rate: $42.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LITENING ADVANCED TARGETING PODS

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $53.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING ADVANCED TARGETING PODS Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. Competition dynamics show a sole-source award, raising concerns about potential overpricing and reduced innovation. 3. Risk indicators include reliance on a single contractor and potential for cost overruns without competitive pressure. 4. Performance context is tied to the delivery of advanced targeting pods, critical for air force operations. 5. Sector positioning places this contract within the defense aerospace and engineering services market.

Value Assessment

Rating: questionable

The contract value of $53 million for advanced targeting pods is significant. However, without a competitive bidding process, it's challenging to benchmark the pricing against market rates or similar contracts. The lack of transparency in cost breakdowns makes it difficult to ascertain if the price reflects fair market value or if there's an opportunity for cost savings through competition. The sole-source nature inherently limits the ability to assess value-for-money effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Systems Corporation, was considered. This significantly limits the opportunity for price discovery and negotiation that typically occurs in a full and open competition. The absence of multiple bidders suggests that either no other capable vendors were identified or pursued, or that specific circumstances led to a sole-source justification.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without competing offers, the government has less leverage to negotiate the best possible price, potentially leading to higher overall spending for essential defense equipment.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives critical targeting technology. Services delivered include the provision of advanced targeting pods, enhancing aircraft surveillance and strike capabilities. Geographic impact is primarily within military operational theaters where these pods are deployed. Workforce implications include support for specialized engineering and manufacturing roles within Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in cost breakdown hinders thorough value-for-money assessment.
Dependence on a single contractor can create supply chain risks and reduce negotiation leverage.
Limited public information on performance metrics makes it difficult to gauge effectiveness beyond contract completion.

Positive Signals

Contract supports critical defense capabilities, enhancing air force operational effectiveness.
Northrop Grumman is an established defense contractor with experience in similar systems.
The contract duration of over three years suggests a sustained need for these capabilities.

Sector Analysis

This contract falls within the defense aerospace sector, specifically focusing on electronic warfare and targeting systems. The market for advanced targeting pods is characterized by high technological barriers to entry and a limited number of specialized manufacturers, often dominated by large defense contractors. Spending in this sub-sector is driven by military modernization efforts and the need for superior situational awareness and precision strike capabilities. Comparable spending benchmarks are difficult to establish publicly due to the proprietary nature of such systems and the specialized market.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by the 'sb' field being false. Furthermore, the 'ss' field is also false, suggesting no specific small business subcontracting goals were mandated or reported for this award. The sole-source nature of the award further limits opportunities for small businesses to participate as prime contractors or through subcontracting unless specifically included by the prime. The impact on the small business ecosystem is likely minimal for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are usually tied to contract deliverables, performance standards, and financial reporting. Transparency is limited due to the sole-source nature and the classification of defense-related procurements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Advanced Targeting Pods
Air Force Weapon Systems
Defense Electronics
Northrop Grumman Defense Contracts
Sole Source Defense Procurements

Risk Flags

Sole Source Award
Limited Competition
Lack of Transparency in Pricing
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LITENING ADVANCED TARGETING PODS

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 $53.1 million.

What is the period of performance?

Start: 2019-01-01. End: 2022-05-31.

What is the specific technological advancement or capability offered by these 'LITENING ADVANCED TARGETING PODS' compared to previous generations or competitor systems?

The provided data does not detail the specific technological advancements of the LITENING ADVANCED TARGETING PODS. Generally, advanced targeting pods offer enhanced resolution, longer detection ranges, improved tracking capabilities, and integration with a wider array of munitions compared to older systems. They often incorporate features like infrared sensors, laser designators, and data links for real-time information sharing. Without specific technical specifications or comparative analyses released by the Department of Defense or Northrop Grumman, a precise comparison to previous generations or competitor systems remains speculative. However, the 'advanced' designation implies significant upgrades in sensor fusion, image processing, and operational flexibility crucial for modern air combat and intelligence, surveillance, and reconnaissance (ISR) missions.

Given the sole-source award, what justification did the Department of the Air Force provide for not competing this requirement?

The data provided indicates the contract was 'NOT COMPETED' and lists the contract type as 'SOLE SOURCE'. However, the specific justification for this sole-source award is not included in the dataset. Typically, sole-source justifications under federal acquisition regulations (FAR) must meet stringent criteria, such as the existence of only one responsible source capable of providing the supplies or services, or a public exigency requiring that the Government act immediately. For defense procurements, justifications often relate to unique technical capabilities, proprietary technology, or the need for commonality with existing systems to ensure interoperability and reduce training and logistical burdens. A formal Justification for Other Than Full and Open Competition (JOFOC) would have been required and likely approved internally by the Air Force.

How does the unit cost or total contract value compare to publicly available benchmarks for similar advanced targeting pod systems from other defense contractors?

Direct comparison of the $53 million total contract value for these LITENING ADVANCED TARGETING PODS to publicly available benchmarks for similar systems is challenging due to several factors. Firstly, the market for advanced targeting pods is specialized, with a limited number of prime contractors. Secondly, contract details, including unit pricing and specific configurations, are often not fully disclosed for national security or proprietary reasons. Northrop Grumman's LITENING pods are a known product line, but pricing can vary significantly based on the specific variant, quantity, integration requirements, and support packages. Without access to detailed cost breakdowns or comparative procurement data from other agencies or nations for equivalent systems (e.g., from Lockheed Martin or Raytheon), establishing a precise value-for-money benchmark is difficult. The sole-source nature of this award further complicates direct price comparisons.

What are the key performance indicators (KPIs) or metrics used to evaluate the success and effectiveness of these targeting pods post-delivery?

The provided data does not specify the key performance indicators (KPIs) or metrics used to evaluate the success and effectiveness of the LITENING ADVANCED TARGETING PODS. In defense contracts of this nature, performance evaluation typically involves assessing factors such as reliability (Mean Time Between Failures - MTBF), operational availability, accuracy of targeting data, sensor performance under various environmental conditions (e.g., weather, day/night), integration success with specific aircraft platforms, and user feedback from aircrews. Contractual terms often include acceptance criteria and potential penalties for failing to meet specified performance thresholds. However, these specific KPIs are usually detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which are not publicly available in this dataset.

What is Northrop Grumman's historical track record with the LITENING pod program and similar targeting systems, particularly concerning delivery timelines and budget adherence?

Northrop Grumman has a long-standing history with the LITENING targeting pod program, which has been in service and undergoing upgrades for many years across various U.S. and allied air forces. The company generally has a strong track record in producing advanced targeting and reconnaissance systems. Historically, the LITENING program has been considered successful, with numerous upgrades enhancing its capabilities over time. While specific delivery timelines and budget adherence for individual contracts can vary, Northrop Grumman is a major defense contractor with extensive experience managing complex programs. Issues related to delivery delays or cost overruns can occur in any large defense program, but the continued procurement and upgrades of the LITENING pod suggest overall program satisfaction and successful execution by the contractor in meeting the evolving needs of the Air Force.

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: $53,074,980

Exercised Options: $53,074,980

Current Obligation: $53,074,980

Actual Outlays: $-79,223

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $22,968

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA854019D0001

IDV Type: IDC

Timeline