Air Force awards $25.8M sole-source contract for LITENING Targeting Pod support to Northrop Grumman

Contract Overview

Contract Amount: $25,844,836 ($25.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-07-28

End Date: 2025-10-31

Contract Duration: 826 days

Daily Burn Rate: $31.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LITENING TARGETING POD SUPPORT AND SUSTAINMENT

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $25.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING TARGETING POD SUPPORT AND SUSTAINMENT Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant duration of over two years suggests a need for sustained support. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. Northrop Grumman is a major defense contractor, indicating a reliance on established players. 5. The engineering services NAICS code suggests complex technical support is required. 6. The contract's value, while substantial, needs benchmarking against similar sustainment contracts.

Value Assessment

Rating: questionable

The contract value of $25.8 million for approximately 2.7 years of support for LITENING Targeting Pods is difficult to benchmark without more specific details on the scope of services. As a sole-source award, there is no direct comparison to assess pricing competitiveness. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. This necessitates robust oversight to ensure costs remain reasonable and the fixed fee adequately compensates the contractor for the effort.

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 among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the Department of the Air Force did not benefit from a competitive bidding process, which could have potentially driven down costs and spurred innovation.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing the requirement, there is less assurance that the government is receiving the best possible price for the services rendered.

Public Impact

The primary beneficiaries are the U.S. Air Force units utilizing LITENING Targeting Pods, ensuring their operational readiness. Services delivered include sustainment and support, crucial for maintaining the functionality of advanced targeting systems. The contract is based in Illinois, indicating a concentration of support activities in that state. Workforce implications include the potential for skilled engineering and technical jobs at Northrop Grumman's Illinois facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Cost Plus Fixed Fee contract type carries a risk of cost overruns without stringent oversight.
Lack of competition may reduce incentives for innovation and efficiency improvements.
Reliance on a single contractor for critical sustainment could create vendor lock-in.

Positive Signals

Northrop Grumman is an established provider with likely deep expertise in LITENING Targeting Pods.
Sustained support ensures the continued operational capability of essential Air Force assets.
The contract duration suggests a stable, long-term requirement being met.

Sector Analysis

The defense sector, particularly aerospace and defense, relies heavily on specialized engineering services for the sustainment of complex weapon systems. The market for targeting pod support is likely dominated by a few key original equipment manufacturers (OEMs) like Northrop Grumman, who possess the proprietary knowledge and technical data. Spending in this area is critical for maintaining air superiority and mission effectiveness. Comparable spending benchmarks would typically involve analyzing other sustainment contracts for similar avionics or targeting systems.

Small Business Impact

This contract does not appear to involve a small business set-aside, as Northrop Grumman is a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within this award. The focus on a sole-source award to a prime contractor of this size typically means limited direct opportunities for small businesses unless they are existing subcontractors to Northrop Grumman.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will be critical, likely falling under the purview of the Department of the Air Force's contracting and program management offices. Accountability measures will focus on tracking incurred costs against the contract ceiling and ensuring the fixed fee is earned through performance. Transparency may be limited due to the sole-source nature, but contract performance reports and financial audits would be key oversight mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

LITENING Targeting Pod Program
Air Force Avionics Support Contracts
Defense Contractor Sustainment Services
Aerospace Engineering Services

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost escalation
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LITENING TARGETING POD SUPPORT AND SUSTAINMENT

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 $25.8 million.

What is the period of performance?

Start: 2023-07-28. End: 2025-10-31.

What is Northrop Grumman's track record with LITENING Targeting Pods and similar sustainment contracts?

Northrop Grumman has a long-standing history with the LITENING Targeting Pod system, having developed and manufactured it. They have consistently been awarded contracts for its sustainment, upgrades, and support across various U.S. military branches and international partners. Their track record generally indicates deep technical expertise and a reliable supply chain for this specific product line. Analyzing past performance metrics on similar sustainment contracts, including on-time delivery, quality of service, and cost control, would provide further insight into their capabilities and potential risks associated with this award. However, specific performance data is often sensitive and not publicly available in detail.

How does the $25.8 million value compare to historical spending on LITENING Pod support?

To accurately compare the $25.8 million value, historical spending data for LITENING Targeting Pod support contracts awarded to Northrop Grumman or other entities would be necessary. This data should ideally cover similar periods and scopes of work, such as sustainment, repair, and logistics. Without access to a comprehensive database of past contracts for this specific system, a direct comparison is challenging. However, given the duration of over two years and the nature of advanced targeting pod technology, a multi-million dollar sustainment contract is not unusual within the defense sector. Benchmarking against contracts for comparable systems (e.g., other targeting pods or advanced sensor systems) could offer a broader perspective on value for money.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract for sustainment?

The primary risks associated with a sole-source CPFF contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved through a competitive bidding process. The government lacks the leverage of multiple offers to negotiate the best possible terms. Secondly, the CPFF structure reimburses the contractor for allowable costs plus a fixed fee. While the fee is fixed, the total cost can escalate if the contractor incurs higher-than-expected costs, which are then passed on to the government. This necessitates rigorous government oversight to scrutinize costs, ensure efficiency, and prevent unnecessary expenditures. Without strong oversight, CPFF contracts can become susceptible to cost overruns and reduced value for money.

What is the expected program effectiveness and impact of this sustainment contract?

The expected program effectiveness hinges on Northrop Grumman's ability to provide timely and high-quality sustainment services for the LITENING Targeting Pods. Effective sustainment ensures that these critical assets remain operational, reliable, and capable of performing their intended mission of identifying and tracking targets for aircrews. This directly impacts the Air Force's combat readiness and effectiveness in various operational theaters. The contract's duration suggests a commitment to maintaining a certain level of operational capability over the medium term. Success will be measured by the uptime of the pods, the speed and quality of repairs, and the availability of necessary spare parts and technical support, all contributing to mission success.

Are there alternative solutions or contractors that could provide similar support?

Given that LITENING Targeting Pods are a proprietary system developed by Northrop Grumman, it is highly probable that they are the only entity with the complete technical data package, specialized tooling, and trained personnel required for comprehensive sustainment. While other defense contractors might offer general engineering or maintenance services, they would likely lack the specific expertise and authorization to service the LITENING system effectively. Therefore, for full sustainment, alternative solutions from different contractors are often limited unless the government pursues a strategy to develop second-source capabilities, which is a complex and lengthy process, or if the contract scope was limited to non-proprietary aspects.

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: COST PLUS FIXED FEE (U)

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: $25,844,836

Exercised Options: $25,844,836

Current Obligation: $25,844,836

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $15,455,612

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