Air Force awards $71.4M for LITENING Targeting Pods to Northrop Grumman, a sole-source contract

Contract Overview

Contract Amount: $71,438,992 ($71.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-03-28

End Date: 2026-03-31

Contract Duration: 733 days

Daily Burn Rate: $97.5K/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 $71.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LITENING CATP TARGETING PODS Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant investment in advanced targeting technology for the Air Force. 3. Long-term contract duration suggests sustained need for these capabilities. 4. Geographic concentration in Illinois for contract performance. 5. Firm Fixed Price contract type shifts cost risk to the contractor. 6. Potential for follow-on work given the nature of defense systems.

Value Assessment

Rating: fair

The contract value of $71.4 million for LITENING CATP Targeting Pods is substantial. Without direct comparable sole-source awards for the same system, a precise value-for-money assessment is challenging. However, the lack of competition inherently limits the government's ability to secure the lowest possible price. Benchmarking against similar advanced targeting pod systems, if available, would be necessary for a more robust evaluation. The firm fixed price structure is positive in that it caps the government's expenditure.

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 solicited. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. The rationale for sole-source awards often relates to unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The absence of competition here means taxpayers may not be benefiting from the most cost-effective solution.

Taxpayer Impact: Sole-source awards limit the government's leverage in price negotiations, potentially leading to higher costs for taxpayers compared to a competitively bid contract. This reduces the opportunity for market forces to ensure optimal value.

Public Impact

The primary beneficiaries are the U.S. Air Force and its aircrews, who will receive advanced targeting capabilities. The contract supports the delivery of LITENING CATP Targeting Pods, crucial for precision strike missions. Contract performance is concentrated in Illinois, potentially benefiting the local economy and workforce. This procurement sustains the operational readiness and effectiveness of Air Force combat aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or improve efficiency.
Dependence on a single supplier for critical targeting technology poses a long-term strategic risk.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Northrop Grumman is an established defense contractor with a track record in this technology area.
The contract ensures the continued availability of essential targeting pods for Air Force operations.

Sector Analysis

The defense electronics sector, particularly targeting and sensor systems, is characterized by high research and development costs and long product lifecycles. Northrop Grumman is a major player in this market. Spending on advanced targeting pods is a critical component of overall defense modernization efforts, enabling precision strikes and reducing collateral damage. Comparable spending benchmarks would typically be found within the broader defense procurement of avionics and sensor systems.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the 'sb': false parameter. Northrop Grumman is a large prime contractor. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in the provided data. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Defense Contract Management Agency (DCMA) likely provides on-site oversight for performance and quality. Transparency is generally limited for sole-source awards, but contract modifications and performance reports are typically managed internally. Inspector General investigations could be initiated if performance issues or fraud are suspected.

Related Government Programs

Air Force Avionics Procurement
Defense Targeting and Navigation Systems
Precision Strike Weapon Systems
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Dependence on single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $71.4 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 $71.4 million.

What is the period of performance?

Start: 2024-03-28. End: 2026-03-31.

What is the historical spending trend for LITENING CATP Targeting Pods by the Department of Defense?

Analyzing historical spending on LITENING CATP Targeting Pods requires access to historical contract databases. Typically, such systems would reveal a pattern of awards, potentially including both sole-source and competitive procurements over several fiscal years. The trend would likely show consistent investment in this technology, reflecting its ongoing importance for air operations. Fluctuations in spending could be attributed to modernization cycles, changes in operational tempo, or the introduction of new systems. Without specific historical data, it's difficult to provide precise figures, but the sustained need for such capabilities suggests a consistent, albeit potentially variable, expenditure over time.

How does the unit cost of the LITENING CATP Targeting Pod under this contract compare to publicly available benchmarks or previous awards?

Determining the precise unit cost requires dividing the total contract value by the number of units procured, which is not provided in the data. Furthermore, comparing this sole-source award to benchmarks is challenging. If previous awards for the same pod system were competitively bid, their unit costs would serve as a more reliable benchmark. However, sole-source contracts often result in higher unit prices due to the lack of competitive pressure. Publicly available data on advanced targeting pod unit costs can vary significantly based on system sophistication, age, and procurement volume. A detailed analysis would necessitate comparing this contract's implied unit cost against similar systems procured competitively or against the contractor's own previous sole-source pricing history, if available.

What are the specific risks associated with relying on a sole-source provider for critical defense technology like targeting pods?

Relying on a sole-source provider for critical defense technology like targeting pods introduces several significant risks. Firstly, it eliminates price competition, potentially leading to inflated costs for the government and taxpayers. Secondly, it can foster complacency in the contractor, reducing incentives for innovation, efficiency improvements, or proactive maintenance. Thirdly, it creates a single point of failure; any disruption in the sole-source provider's operations, such as production issues, financial instability, or geopolitical factors affecting the company, could severely impact the military's operational capabilities. Lastly, it limits the government's flexibility to switch to alternative or superior technologies should they emerge on the market.

What is Northrop Grumman's track record with the LITENING CATP Targeting Pod program and similar defense contracts?

Northrop Grumman has a well-established track record with the LITENING Advanced Targeting Pod program, having been the primary developer and supplier for many years. The LITENING pod is a widely deployed system used by numerous U.S. and international air forces, indicating a history of successful production and integration. The company has extensive experience in developing and manufacturing complex electro-optical/infrared (EO/IR) systems, sensors, and targeting solutions for military applications. Their broader portfolio includes a range of defense electronics, including radar systems, electronic warfare systems, and communication systems, demonstrating a deep understanding of the defense market and government contracting requirements. Past performance reviews and contract awards would provide further detail on their reliability and quality.

How does the contract duration (end date) of March 31, 2026, align with the expected operational lifespan and modernization cycle of targeting pods?

The contract end date of March 31, 2026, suggests a period of approximately two years from the award date for delivery orders under this contract. This duration is relatively short for the full lifecycle of a major defense system like a targeting pod, which can remain in service for a decade or more. This likely indicates that the contract covers a specific period of sustainment, upgrades, or a defined set of new procurements rather than the entire lifespan of the pods. Targeting pods typically undergo upgrades and modernization to incorporate new technologies and maintain effectiveness against evolving threats. The end date suggests that future requirements beyond 2026 will likely be addressed through subsequent contracts, potentially involving re-competition or further sole-source awards depending on market conditions and technological advancements.

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: $71,438,992

Exercised Options: $71,438,992

Current Obligation: $71,438,992

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $2,133,293

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