Air Force awards $26.3M for LITENING targeting pods, a sole-source contract to Northrop Grumman

Contract Overview

Contract Amount: $26,262,135 ($26.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-07-01

End Date: 2024-02-29

Contract Duration: 243 days

Daily Burn Rate: $108.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LITENING CATP TARGETING PODS

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING CATP TARGETING PODS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract is for a critical component of combat aircraft targeting systems. 3. Delivery order issued under an existing contract, suggesting a continuation of established capabilities. 4. The duration of the delivery order is 243 days, indicating a short-term need. 5. Northrop Grumman is the sole provider of these specific targeting pods. 6. The contract value represents a significant investment in advanced military technology.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. However, the price per unit can be inferred from the total award and the number of units if available. Without direct comparisons to similar sole-source awards or market rates for comparable technologies, assessing true value-for-money is difficult. The fixed-price nature of the contract provides some cost certainty for the government, but the absence of competition may lead to higher prices than a competed contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a unique product or service is required, and only one source can provide it. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium for this targeting pod system due to the absence of competitive pressure to lower prices.

Public Impact

The primary beneficiaries are the U.S. Air Force, enhancing its combat aircraft's precision strike capabilities. The services delivered include the provision of LITENING Advanced Targeting Pods, crucial for modern air warfare. The geographic impact is primarily within the operational theaters where Air Force aircraft are deployed. Workforce implications are likely concentrated within Northrop Grumman's manufacturing and engineering divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of competition raises questions about whether the government secured the best possible value.
Dependence on a single supplier for critical targeting technology poses a long-term strategic risk.

Positive Signals

Contract ensures the continued availability of advanced targeting capabilities for the Air Force.
Northrop Grumman is an established defense contractor with a proven track record in this technology area.
The fixed-price contract provides cost predictability for this specific delivery order.

Sector Analysis

The defense sector, particularly aerospace and defense electronics, is characterized by high R&D costs and long product development cycles. Targeting pods are sophisticated electro-optical/infrared systems that enhance aircraft precision strike capabilities. The market for such systems is dominated by a few large defense contractors. Spending in this area is driven by the need for technological superiority and operational effectiveness in modern warfare. Comparable spending benchmarks would involve other advanced targeting pod procurements or similar sensor systems for military aircraft.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, there is a potential for subcontracting opportunities for small businesses within Northrop Grumman's supply chain. However, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in the provided data.

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 inherent in the fixed-price contract terms, requiring delivery of specified goods. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

LITENING Targeting Pods (previous contracts)
Advanced Targeting Systems
Air Force Avionics Procurement
Defense Electronics Manufacturing

Risk Flags

Sole Source Award
Lack of Competition
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LITENING CATP 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 $26.3 million.

What is the period of performance?

Start: 2023-07-01. End: 2024-02-29.

What is the historical spending trend for LITENING targeting pods by the Department of Defense?

Historical spending data for LITENING targeting pods by the Department of Defense would reveal the total investment over time and identify any significant fluctuations or trends. Analyzing past awards, including their values, quantities, and contract types (competed vs. sole-source), can provide context for the current $26.3 million delivery order. For instance, if previous awards were significantly lower or higher, it might indicate changes in unit costs, inflation, or the scope of requirements. Understanding the historical reliance on Northrop Grumman for these pods is also crucial. A consistent pattern of sole-source awards for this system would suggest a long-standing strategic decision or a lack of viable alternatives, impacting future procurement strategies and potential cost savings through competition.

How does the unit cost of these LITENING pods compare to similar targeting pods from other manufacturers or previous versions?

Comparing the unit cost of these LITENING pods to similar systems is essential for assessing value for money, especially given the sole-source nature of this award. If the unit cost is significantly higher than comparable pods from competitors like Raytheon's Advanced Targeting Pod (ATP) or previous generations of LITENING pods, it could indicate an inflated price. However, a direct comparison requires detailed specifications and performance metrics, as different pods offer varying capabilities. If this award represents an upgrade or a newer version with enhanced features, a higher unit cost might be justifiable. Without access to specific unit pricing and detailed technical specifications for comparable systems, a definitive value assessment remains challenging, but any significant deviation from historical or market norms warrants further investigation.

What are the specific performance improvements or new capabilities offered by the LITENING pods under this contract compared to previous versions?

The specific performance improvements or new capabilities offered by the LITENING pods under this $26.3 million delivery order are critical for justifying the expenditure, particularly in a sole-source context. Understanding these advancements helps determine if the price reflects enhanced functionality, such as improved resolution, longer detection ranges, enhanced tracking algorithms, or new sensor integration. If this award is for a standard replenishment of existing systems without significant upgrades, the justification for the sole-source award and its price becomes weaker. Conversely, if these pods incorporate cutting-edge technology that provides a distinct operational advantage, the investment may be deemed necessary despite the lack of competition. Detailed technical documentation or program office justifications would be needed to fully assess these aspects.

What is Northrop Grumman's track record with sole-source defense contracts, and have they faced scrutiny regarding pricing or performance in similar situations?

Northrop Grumman, as a major defense contractor, has a history of both competed and sole-source contracts. Analyzing their track record with sole-source awards for critical systems like targeting pods can reveal patterns of pricing and performance. Scrutiny often arises when sole-source contracts are perceived as lacking competitive discipline, potentially leading to higher costs or less robust performance guarantees. Reports from the Government Accountability Office (GAO), Department of Defense Inspector General (IG), or congressional hearings might shed light on past issues related to Northrop Grumman's sole-source procurements. Understanding whether they have previously been flagged for excessive pricing or performance deficiencies in similar sole-source situations provides valuable context for evaluating the current contract's risk and fairness.

What is the strategic importance of the LITENING targeting pod to the Air Force's current and future operational capabilities?

The LITENING targeting pod is a cornerstone of the U.S. Air Force's precision strike capabilities, enabling fighter and bomber aircraft to identify, track, and engage targets with high accuracy. Its strategic importance lies in its ability to provide real-time intelligence, surveillance, and reconnaissance (ISR) data, as well as laser and GPS-guided munitions delivery. In modern warfare, where asymmetric threats and the need for discriminate targeting are paramount, such systems are indispensable. The continued procurement and sustainment of LITENING pods ensure that aircrews maintain a critical technological edge, enhancing mission effectiveness and reducing collateral damage. The sole-source nature of this award suggests a high degree of reliance on Northrop Grumman's specific technology, underscoring its strategic value and the potential challenges in seeking alternative solutions.

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: $26,262,135

Exercised Options: $26,262,135

Current Obligation: $26,262,135

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $1,837,507

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