DoD awards $50.6M for advanced targeting pods, with limited competition and a 4-year performance period

Contract Overview

Contract Amount: $50,581,403 ($50.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2020-06-15

End Date: 2023-06-30

Contract Duration: 1,110 days

Daily Burn Rate: $45.6K/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 $50.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING ADVANCED TARGETING PODS Key points: 1. Contract awarded for advanced targeting pods, a critical component for modern air warfare. 2. Limited competition suggests potential for higher pricing and reduced market pressure. 3. Long-term contract duration (over 3 years) allows for sustained delivery and potential for follow-on work. 4. Northrop Grumman Systems Corporation is the sole awardee, indicating a strong incumbent position. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. Geographic location of performance is Illinois, a key manufacturing hub.

Value Assessment

Rating: fair

Benchmarking the value for these advanced targeting pods is challenging without specific technical details and comparable contract awards. However, the $50.6 million award over approximately three years suggests a significant investment in sophisticated defense technology. The firm fixed-price contract type aims to control costs, but the lack of robust competition could lead to less favorable pricing compared to a more open market. Further analysis would require comparing unit costs to industry benchmarks and other government procurements for similar systems.

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 solicited. This approach is typically used when a unique capability is required, or when only one source can meet the government's needs. The absence of competition means that the government did not benefit from the price discovery mechanisms that multiple bidders would provide, potentially leading to a higher overall cost than if the contract had been competed.

Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive bidding. Without multiple offers, the government has less leverage to negotiate the best possible price for these essential defense systems.

Public Impact

The primary beneficiaries are the U.S. Air Force and other branches of the Department of Defense, who will receive advanced targeting capabilities. These pods enhance the precision and effectiveness of aerial munitions, improving mission success rates and reducing collateral damage. The contract supports jobs and economic activity within the aerospace and defense sector, particularly in Illinois. The delivery of these advanced systems contributes to maintaining U.S. military technological superiority.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Lack of competition raises questions about whether the government secured the best possible price.
Reliance on a single contractor for critical defense technology could pose supply chain risks.
The specific technical capabilities and performance metrics of the 'advanced' pods are not detailed, making independent value assessment difficult.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
The contract duration of over three years ensures sustained availability of critical equipment.
Northrop Grumman is an established defense contractor with a track record in producing targeting systems.
The award supports the modernization of U.S. military assets.

Sector Analysis

The defense sector is characterized by high-value, technologically advanced procurements. Advanced targeting pods are a critical component of modern air power, enabling precision strikes and intelligence gathering. The market for such systems is often concentrated among a few major defense contractors due to the specialized R&D and manufacturing capabilities required. Spending in this area is driven by the need for technological superiority and operational effectiveness in complex geopolitical environments. Comparable spending benchmarks would typically involve other major defense platforms and their associated sensor and targeting systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there an indication of specific subcontracting goals for small businesses in the provided data. The award to a large prime contractor like Northrop Grumman suggests that the primary focus is on the prime's capabilities. While large defense contracts can sometimes trickle down to small businesses through subcontracting opportunities, the absence of explicit set-asides or targets means that direct benefits to the small business ecosystem are not guaranteed and may be limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management and acquisition oversight bodies, such as the Defense Contract Management Agency (DCMA). The firm fixed-price nature of the contract provides a degree of cost control, but oversight would focus on ensuring timely delivery, adherence to specifications, and quality control. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

LITENING Targeting Pods
Advanced Precision Kill Weapon System (APKWS)
Sniper Advanced Targeting Pod (ATP)
Defense Acquisition Programs
Airborne Sensor Systems

Risk Flags

Sole-source award
Potential for reduced price competition
Lack of detailed technical specifications in public data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.6 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $50.6 million.

What is the period of performance?

Start: 2020-06-15. End: 2023-06-30.

What is the specific technical advancement of these LITENING pods compared to previous versions or competitors?

The provided data does not specify the exact technical advancements of these LITENING Advanced Targeting Pods. However, 'advanced' typically implies improvements in areas such as resolution, range, sensor fusion capabilities, data processing, and integration with newer aircraft platforms or weapon systems. These enhancements allow for more precise target identification, tracking, and engagement, potentially in more challenging environmental conditions or against more sophisticated countermeasures. Without detailed technical specifications or comparative analyses released by the DoD or Northrop Grumman, a precise understanding of the 'advanced' features remains limited to general industry expectations for such systems.

How does the $50.6 million award compare to historical spending on LITENING pods or similar targeting systems?

Historical spending data for LITENING pods or similar systems is not provided in the current dataset. However, $50.6 million over approximately three years represents a significant investment, averaging around $16.8 million per year. This figure should be benchmarked against previous contract awards for LITENING pods to identify trends in pricing and volume. Additionally, comparing this to the cost of other advanced targeting pods from competitors like Raytheon (e.g., Sniper ATP) would provide context on market competitiveness and value. A sustained, sole-source award of this magnitude suggests either a critical, ongoing need or a lack of viable alternatives driving the price.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key Performance Indicators (KPIs) for this contract are not explicitly detailed in the provided data. However, for defense procurement contracts of this nature, typical KPIs would likely include on-time delivery of pods, adherence to technical specifications and performance requirements (e.g., accuracy, reliability, sensor performance), defect rates, and potentially operational availability of the systems once fielded. The firm fixed-price nature also implies that cost control within the awarded amount is a critical performance aspect. The government would monitor these metrics to ensure they are receiving the expected value and capability for their investment.

What is Northrop Grumman's track record with producing advanced targeting pods for the DoD?

Northrop Grumman Systems Corporation has a well-established track record in producing advanced targeting pods for the Department of Defense. They are the manufacturer of the LITENING family of targeting pods, which have been in service for many years and have undergone numerous upgrades. The LITENING pod is a widely used system across various U.S. Air Force and Navy aircraft. Northrop Grumman also produces other advanced sensor systems. Their long-standing presence and continued awards in this specific technology area indicate a strong capability and a trusted relationship with the DoD for delivering these critical components.

Given the sole-source nature, what mechanisms are in place to ensure fair pricing and prevent contractor overreach?

While a sole-source award inherently limits direct price competition, the DoD employs several mechanisms to ensure fair pricing and prevent contractor overreach. These include rigorous cost analysis by contracting officers, review of the contractor's cost proposals, and potentially obtaining data from other government agencies or commercial sources for benchmarking. For sole-source procurements, the government often requires detailed cost breakdowns from the contractor. Furthermore, contract clauses related to 'Defective Cost or Pricing Data' can allow the government to recover overpayments if the contractor provided inaccurate cost information. Ongoing performance monitoring and the potential for future competition also serve as indirect pressures.

What is the expected lifespan and obsolescence risk associated with these advanced targeting pods?

The expected lifespan and obsolescence risk for these advanced targeting pods are not detailed in the provided data. However, advanced defense systems are typically designed with a service life of 10-20 years or more, with provisions for upgrades and sustainment. Obsolescence risk is managed through lifecycle management strategies, including technology insertion programs, component obsolescence management, and potential redesigns. Given the rapid pace of technological advancement, particularly in sensor and processing technology, the DoD likely has plans for periodic upgrades or replacements to ensure the pods remain effective against evolving threats and maintain compatibility with new platforms. The 3-year performance period of this specific contract likely covers initial delivery and potentially some sustainment.

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: 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: $50,715,114

Exercised Options: $50,715,114

Current Obligation: $50,581,403

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