DoD's $36.6M contract for advanced targeting pods awarded to Northrop Grumman without competition

Contract Overview

Contract Amount: $36,656,288 ($36.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-09-23

End Date: 2024-05-31

Contract Duration: 981 days

Daily Burn Rate: $37.4K/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 $36.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING ADVANCED TARGETING PODS Key points: 1. The contract value represents a significant investment in advanced defense technology. 2. Sole-source award raises questions about potential price inflation and lack of market pressure. 3. The duration of the contract (981 days) suggests a long-term need for these systems. 4. Performance context is critical given the strategic importance of targeting pods in modern warfare. 5. The 'Engineering Services' NAICS code indicates a focus on technical development and support. 6. The contract is positioned within the Defense sector, specifically for Air Force aviation assets.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The $36.6 million award for advanced targeting pods lacks a clear comparison point to similar contracts or market rates. The absence of competition suggests that taxpayers may not be receiving the most advantageous pricing. Further analysis would be needed to determine if the price is reasonable given the specific capabilities and technological advancements of these pods.

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 approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and can lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers did not benefit from potential cost savings that could have arisen from a bidding process. This could result in a higher overall expenditure for these advanced targeting systems.

Public Impact

The primary beneficiaries are the U.S. Air Force, receiving advanced targeting capabilities for its aircraft. The services delivered include the provision and potential support of LITENING Advanced Targeting Pods. The geographic impact is primarily within the operational theaters of the U.S. Air Force, with potential implications for personnel in Illinois where the contractor is based. Workforce implications may include specialized engineering and technical roles within Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce transparency in pricing.
Dependence on a single supplier could create future supply chain risks.

Positive Signals

Awarding to an established defense contractor suggests a level of trust in their capabilities.
The contract addresses a critical need for advanced targeting technology.
FIRM FIXED PRICE contract type provides cost certainty for the government.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on avionics and targeting systems. The market for advanced targeting pods is characterized by high technological barriers to entry and a limited number of specialized manufacturers. Spending in this area is driven by the need for precision strike capabilities and intelligence, surveillance, and reconnaissance (ISR) assets. Comparable spending benchmarks would typically involve other major defense procurements for similar sensor systems.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the 'sb': false field. There is no explicit information regarding subcontracting plans for small businesses. The award to a large prime contractor like Northrop Grumman suggests that opportunities for small businesses would likely be through subcontracts, the extent of which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the FIRM FIXED PRICE contract type, which aims to fix costs. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

LITENING Targeting Pod Program
Air Force Avionics Procurement
Defense Advanced Sensor Systems
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.7 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 $36.7 million.

What is the period of performance?

Start: 2021-09-23. End: 2024-05-31.

What is the specific technological advantage of the LITENING Advanced Targeting Pods being procured?

The LITENING Advanced Targeting Pod is a multi-target, multi-mission system designed to provide fighter aircraft with high-resolution imagery and precision-guided munitions delivery capabilities. It typically integrates infrared sensors, laser designators, and advanced image processing to enable pilots to detect, track, and engage targets accurately, even in adverse weather conditions or at extended ranges. Specific technological advancements can include improved sensor resolution, enhanced tracking algorithms, expanded target identification capabilities, and integration with networked warfare systems. The exact technological edge of the specific version procured under this contract would depend on its configuration and upgrade status, which is often classified or proprietary.

How does the $36.6 million contract value compare to historical spending on similar targeting pods?

Direct historical spending comparisons for this specific contract are challenging without more granular data on previous LITENING pod procurements or comparable systems from other manufacturers. However, advanced targeting pods are high-value, technologically sophisticated systems. The $36.6 million for a delivery order over approximately 32 months (981 days) suggests a significant investment per pod or for a batch of pods and associated support. Historically, such systems can range from hundreds of thousands to over a million dollars per unit, depending on the generation, capabilities, and quantity. The sole-source nature of this award prevents a direct price-per-unit comparison to a competitive market, making it difficult to assess if this represents a favorable historical price point without further justification from the agency.

What are the primary risks associated with a sole-source award for critical defense equipment?

The primary risks associated with a sole-source award for critical defense equipment like advanced targeting pods include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened risk of vendor lock-in. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain, especially if the sole source faces production issues, financial instability, or geopolitical challenges. The government also loses the opportunity to explore alternative solutions or technologies that might have emerged from a competitive process.

What is Northrop Grumman's track record with providing targeting pods to the U.S. military?

Northrop Grumman has a long and established track record of providing targeting pods to the U.S. military, most notably with its LITENING family of pods. These pods have been a staple on various Air Force, Navy, and Marine Corps aircraft for decades, undergoing continuous upgrades to maintain their technological relevance. The company has consistently delivered these systems, which are critical for air-to-ground operations. Their extensive experience in this domain suggests a deep understanding of the requirements and a proven capability to produce and support these complex systems, which likely contributed to the sole-source justification for this particular award.

How does the 'Engineering Services' classification impact the understanding of this contract's scope?

The classification of 'Engineering Services' (NAICS code 541330) indicates that this contract likely encompasses more than just the physical delivery of targeting pods. It suggests that a significant portion of the contract value may be allocated to research and development, design, testing, integration, modification, or sustainment engineering related to the LITENING pods. This could include activities such as software development, hardware upgrades, performance analysis, and technical support. Understanding this scope is crucial because it implies ongoing technical work and expertise are being procured, not just a one-time hardware purchase, which can influence how value and performance are assessed over the contract's life.

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: $36,656,288

Exercised Options: $36,656,288

Current Obligation: $36,656,288

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