DoD awards $56.1M for advanced targeting pods, with limited competition and extended delivery

Contract Overview

Contract Amount: $56,120,098 ($56.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-22

End Date: 2027-01-29

Contract Duration: 1,225 days

Daily Burn Rate: $45.8K/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 $56.1 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 air superiority. 2. Limited competition raises questions about price discovery and potential cost efficiencies. 3. Long contract duration suggests a sustained need for these specialized systems. 4. Northrop Grumman Systems Corporation is the sole awardee, indicating a concentrated market. 5. The contract is for Firm Fixed Price, which shifts cost risk to the contractor. 6. Delivery orders extend over a significant period, requiring careful performance monitoring.

Value Assessment

Rating: fair

Benchmarking the value for these advanced targeting pods is challenging without detailed cost breakdowns or comparable contract data. The $56.1 million award for an unspecified number of units over a multi-year period suggests a significant investment. Given the sole-source nature of this award, it is difficult to assess if the pricing reflects competitive market rates. Further analysis would require access to historical pricing for similar systems and a breakdown of the engineering services included.

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 or intellectual property essential for the requirement. The lack of competition limits the government's ability to solicit and evaluate alternative solutions or negotiate the most favorable pricing. It suggests that Northrop Grumman is the only entity capable of meeting the stringent technical specifications for these advanced targeting pods.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust oversight to ensure the awarded price is fair and reasonable.

Public Impact

The primary beneficiaries are the U.S. Air Force, enhancing its aerial combat capabilities. The contract delivers advanced targeting pods, crucial for precision strikes and intelligence gathering. The geographic impact is primarily within the operational theaters where the Air Force deploys these assets. Workforce implications may include specialized engineering and manufacturing roles at Northrop Grumman facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration (over 3 years) requires sustained oversight to ensure performance and value.
Lack of public detail on unit cost makes independent value assessment difficult.
Dependence on a single supplier for critical technology poses a long-term supply chain risk.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Awarding to Northrop Grumman leverages an established provider of defense systems.
Advanced targeting pods are essential for maintaining air superiority and mission effectiveness.

Sector Analysis

The defense sector, particularly aerospace and defense electronics, is characterized by high R&D costs, long product cycles, and significant government procurement. Advanced targeting pods represent a niche but critical segment within this market, requiring specialized engineering and manufacturing expertise. Spending in this area is driven by the need for technological superiority and precision warfare capabilities. Comparable spending benchmarks would involve other advanced sensor and targeting systems procured by the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the awardee is a large corporation, suggesting that subcontracting opportunities for small businesses may be limited or dependent on Northrop Grumman's internal subcontracting plans. Analysis of subcontracting reports would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded in the Firm Fixed Price contract type, which holds the contractor responsible for cost overruns. Transparency is limited due to the sole-source nature and the proprietary details of advanced defense technology. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Aerial Weapon Systems
Airborne Electronic Systems
Targeting and Navigation Systems
Defense Procurement
Aerospace Engineering Services

Risk Flags

Sole-source award
Long contract duration
Lack of unit pricing detail

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.1 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 $56.1 million.

What is the period of performance?

Start: 2023-09-22. End: 2027-01-29.

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

Analyzing historical spending on LITENING ADVANCED TARGETING PODS requires accessing procurement data over several fiscal years. While this specific award is for $56.1 million, previous awards for the same or similar systems would provide context on the program's lifecycle cost and the government's sustained investment. Without access to a comprehensive database of past contracts for this specific system, it's difficult to establish a precise spending trend. However, the ongoing need for such advanced systems suggests a consistent, albeit potentially fluctuating, level of expenditure driven by modernization efforts and operational requirements within the Air Force and potentially other branches.

How does the per-unit cost of these targeting pods compare to similar systems procured by other defense agencies or allied nations?

Determining the per-unit cost is crucial for benchmarking value, but this contract does not provide a unit price or quantity. The total award is $56.1 million for delivery orders over a period extending to January 2027. To compare, we would need to know the number of pods being procured. If we assume a hypothetical number of pods, we could then calculate an estimated per-unit cost. However, such comparisons are complex due to variations in technical specifications, included features (e.g., software, integration services), and the competitive landscape for each procurement. Allied nation procurements might offer some insight, but direct comparisons are often limited by different acquisition processes and national security considerations.

What are the specific technical capabilities and performance metrics of the LITENING ADVANCED TARGETING POD?

The LITENING Advanced Targeting Pod is a state-of-the-art system designed to provide aircrews with high-resolution imagery and precise targeting data. Key capabilities typically include advanced infrared sensors for day/night operation, laser designation for guiding munitions, and potentially features like image stabilization, automatic target tracking, and data links for real-time information sharing. While specific performance metrics (e.g., detection range, accuracy, resolution) are often classified or proprietary, the 'advanced' designation implies cutting-edge technology that enhances situational awareness and enables precision engagement of targets, even in challenging environments. Its role is critical for modern air-to-ground combat operations.

What is Northrop Grumman's track record with the LITENING targeting pod program and similar defense contracts?

Northrop Grumman has a well-established track record in developing and producing advanced targeting pods, including the LITENING family of systems. They have been a primary supplier to the U.S. Air Force and other military branches for many years, indicating a high degree of technical expertise and program execution capability. Their history with this program suggests a deep understanding of the system's requirements and a proven ability to deliver reliable and effective solutions. Past performance reviews and contract awards for similar systems would further illuminate their capabilities, but generally, they are considered a leading contractor in this domain.

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 present several risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from market pressures that typically drive down costs. Secondly, it can foster complacency in the contractor, potentially reducing incentives for innovation or efficiency improvements. Thirdly, it creates a dependency on a single supplier, which can be problematic if the contractor faces financial difficulties, production issues, or geopolitical challenges. This dependency also poses a long-term strategic risk, as it limits the government's options for future upgrades or alternative solutions, potentially hindering technological advancement.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: $56,120,098

Exercised Options: $56,120,098

Current Obligation: $56,120,098

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $4,058,261

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