DoD awards $74.5M for LITENING TARGETING PODS to Northrop Grumman, a sole-source contract

Contract Overview

Contract Amount: $74,480,517 ($74.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-12-23

End Date: 2025-09-30

Contract Duration: 1,377 days

Daily Burn Rate: $54.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LITENING TARGETING PODS

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $74.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING TARGETING PODS Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant duration of 1377 days suggests a long-term need for targeting pods. 3. The contract is for Engineering Services, indicating a focus on support and development. 4. Northrop Grumman is the sole contractor, highlighting potential market concentration. 5. The contract's value of $74.5M warrants scrutiny for value for money. 6. Delivery Order type suggests this is part of a larger indefinite-delivery contract.

Value Assessment

Rating: questionable

Benchmarking the value for money on this sole-source contract is challenging without competitive data. The $74.5 million award over approximately 3.8 years for targeting pods suggests a substantial investment. Without comparable contract data or a competitive bidding process, it's difficult to definitively assess if the pricing is optimal or if taxpayers are receiving the best possible value. Further analysis would require understanding the specific technical requirements and the market landscape for such specialized equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that can arise from competitive bidding processes, potentially leading to higher overall expenditure for these targeting pods.

Public Impact

The Department of the Air Force benefits from the acquisition of advanced LITENING TARGETING PODS. These pods are critical for intelligence, surveillance, and reconnaissance (ISR) missions, enhancing combat effectiveness. The contract supports advanced aerospace engineering services, contributing to technological development in defense. The primary beneficiaries are military personnel who rely on this technology for mission success. The contract is managed by the Department of Defense, ensuring national security objectives are met.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-sourcing.
Potential for cost overruns without competitive benchmarks.
Long contract duration could mask inefficiencies.
Dependence on a single supplier for critical technology.

Positive Signals

Northrop Grumman is a known entity in defense contracting.
The contract supports advanced targeting technology, crucial for military operations.
Firm Fixed Price contract type provides some cost certainty.
Delivery Order structure may indicate flexibility within a broader framework.

Sector Analysis

The defense sector, particularly aerospace and defense electronics, is characterized by high R&D costs, long product development cycles, and significant government procurement. Northrop Grumman is a major player in this space, specializing in advanced systems like targeting pods. The market for such specialized defense equipment is often concentrated, with a limited number of qualified suppliers. This contract fits within the broader category of defense procurement for advanced sensor and targeting systems, a critical component of modern air power.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that small businesses are unlikely to be directly involved as prime contractors or through mandatory subcontracting opportunities on this specific award. The focus is on a large, established defense contractor, potentially limiting opportunities for smaller firms to participate in this particular procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. The Air Force is the specific agency managing the award. Transparency is limited due to the sole-source nature of the award. Accountability measures would be embedded within the contract terms and conditions, including performance metrics and payment schedules. The Inspector General of the Department of Defense may have jurisdiction for audits and investigations if any irregularities are suspected.

Related Government Programs

LITENING Targeting Pods
Defense Procurement
Aerospace and Defense Systems
Northrop Grumman Contracts
Department of the Air Force Acquisitions

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Dependency on single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LITENING 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 $74.5 million.

What is the period of performance?

Start: 2021-12-23. End: 2025-09-30.

What is the historical spending trend for LITENING TARGETING PODS by the Department of Defense?

Analyzing historical spending on LITENING TARGETING PODS requires access to comprehensive federal procurement data beyond this single award. However, the recurring need for such advanced targeting systems suggests consistent investment over time. Factors influencing spending include technological upgrades, fleet modernization, operational tempo, and geopolitical demands. Without specific historical data for this particular system or its predecessors, it's difficult to establish a precise trend. Generally, spending on advanced avionics and targeting systems tends to increase as technology evolves and new threats emerge, but budget constraints and program priorities can also lead to fluctuations. This $74.5 million award represents a significant, but potentially episodic, investment within a broader, ongoing sustainment and modernization effort for air-to-ground targeting capabilities.

How does the per-unit cost of these LITENING TARGETING PODS compare to similar systems or previous acquisitions?

Determining the per-unit cost for these LITENING TARGETING PODS is not feasible with the provided data, as the total award amount ($74.5 million) does not specify the number of units procured. Furthermore, the contract type is 'FIRM FIXED PRICE' for 'Engineering Services,' which may not directly translate to a simple per-unit hardware cost. To perform a meaningful comparison, one would need to know the quantity of pods acquired under this award and compare it to the unit prices of similar systems procured competitively by the DoD or other allied nations. Benchmarking is further complicated by the sole-source nature of this award, which inherently limits transparent price discovery. Without this comparative data, assessing the value for money on a per-unit basis remains speculative.

What are the specific engineering services being provided under this contract, and how do they relate to the targeting pods?

The contract specifies 'Engineering Services' (NAICS code 541330) in conjunction with LITENING TARGETING PODS. This suggests that the $74.5 million award is not solely for the purchase of new hardware, but likely encompasses a range of support activities. These services could include system integration, software development and updates, performance analysis, reliability testing, maintenance engineering, technical support, and potentially upgrades or modifications to existing pods. The long duration (1377 days) further supports the idea that this contract is for ongoing engineering support and sustainment rather than a one-time hardware acquisition. These services are crucial for ensuring the targeting pods remain operational, effective, and compatible with evolving aircraft systems and mission requirements.

What is Northrop Grumman's track record with the LITENING TARGETING POD system and similar defense contracts?

Northrop Grumman is a well-established defense contractor with extensive experience in developing and producing advanced aerospace systems, including targeting pods. The LITENING pod itself has been a significant product line for the company, widely used by the U.S. Air Force and other international partners for many years. Northrop Grumman has a long history of delivering complex systems to the Department of Defense across various domains. Their track record with targeting systems generally involves continuous upgrades and sustainment efforts to maintain technological relevance. While specific performance metrics for this particular contract are not detailed here, the company's overall position as a primary supplier of such systems indicates a substantial capability and a history of fulfilling large-scale defense contracts, though like any major contractor, they are subject to performance reviews and potential contract disputes.

What are the potential risks associated with a sole-source award for critical defense technology like targeting pods?

Sole-source awards for critical defense technology like targeting pods present several risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, potentially resulting in less value for taxpayer money. Secondly, it can reduce the incentive for the sole provider to innovate or improve efficiency, as there is no direct market pressure from competitors. Thirdly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences production issues, financial instability, or decides to discontinue the product line. This dependency can also impact supply chain resilience and lead times for repairs or replacements. Finally, sole-source justifications can sometimes be opaque, raising concerns about the necessity and fairness of the procurement process.

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: $75,871,005

Exercised Options: $75,871,005

Current Obligation: $74,480,517

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $1,260,710

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