DoD awards $8.57M to Northrop Grumman for EGI navigation system repair, raising competition concerns
Contract Overview
Contract Amount: $8,573,600 ($8.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-09-20
End Date: 2026-10-20
Contract Duration: 760 days
Daily Burn Rate: $11.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EMBEDDED GLOBAL POSITIONING SYSTEM / INERTIAL NAVIGATION SYSTEM (EGI), LN-251 REPAIR AND RETURN
Place of Performance
Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $8.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: EMBEDDED GLOBAL POSITIONING SYSTEM / INERTIAL NAVIGATION SYSTEM (EGI), LN-251 REPAIR AND RETURN Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Focus on repair and return services for critical navigation systems highlights reliance on incumbent. 3. Lack of competition may indicate specialized nature of repair or limited market availability. 4. Performance period extends over two years, suggesting ongoing need for maintenance. 5. The contract value, while significant, needs benchmarking against similar repair services. 6. Northrop Grumman's role as a sole provider for this specific repair is a key risk indicator.
Value Assessment
Rating: questionable
The contract value of $8.57 million for repair and return of EGI systems appears reasonable on its face, but without competitive bidding, it's difficult to ascertain true value for money. Benchmarking against similar repair contracts for complex avionics systems would be necessary to assess pricing effectiveness. The firm fixed-price nature provides some cost certainty, but the lack of competition prevents a robust comparison to market rates.
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 is typically used when a unique product or service is required, or when only one vendor possesses the necessary expertise or proprietary information. The lack of competition means there was no opportunity for other qualified companies to bid, potentially leading to higher prices than if multiple bids were received.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, the government cannot be assured it is receiving the best possible price for these critical repair services.
Public Impact
The primary beneficiaries are the Department of the Air Force, ensuring the operational readiness of aircraft equipped with EGI systems. Services delivered include the repair and return of Embedded Global Positioning System / Inertial Navigation Systems (EGI), crucial for navigation and guidance. The geographic impact is primarily within the United States, supporting Air Force operations and maintenance facilities. Workforce implications include the continued employment of specialized technicians at Northrop Grumman required for these complex repairs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and value assessment.
- Reliance on a single contractor for critical navigation system repair poses a supply chain risk.
- Potential for cost overruns if pricing is not rigorously managed due to lack of competition.
Positive Signals
- Northrop Grumman is an established provider with likely deep expertise in EGI systems.
- Firm fixed-price contract offers cost predictability for the government.
- The contract ensures the continued operational capability of essential navigation systems for the Air Force.
Sector Analysis
The aerospace and defense sector is characterized by high technological complexity and significant government procurement. This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry. The market for specialized repair services of advanced avionics like EGI systems is often concentrated among a few key players due to proprietary technology and extensive testing requirements. Comparable spending benchmarks for such niche repair services are difficult to establish publicly due to the specialized nature and limited number of providers.
Small Business Impact
This contract does not appear to involve a small business set-aside, as Northrop Grumman Systems Corporation is a large defense contractor. There is no explicit mention of subcontracting requirements for small businesses within the provided data. The focus on specialized repair for a specific system likely means that opportunities for small businesses in this particular contract are minimal, unless they are part of Northrop Grumman's supply chain for non-specialized components or services.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, making public scrutiny of pricing and performance more challenging. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- DoD Navigation Systems Procurement
- Air Force Avionics Maintenance Contracts
- GPS/INS System Support
- Northrop Grumman Defense Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Dependency on single contractor
Tags
defense, department-of-defense, department-of-the-air-force, northrop-grumman-systems-corporation, sole-source, firm-fixed-price, repair-and-return, navigation-systems, avionics, egis, utah, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. EMBEDDED GLOBAL POSITIONING SYSTEM / INERTIAL NAVIGATION SYSTEM (EGI), LN-251 REPAIR AND RETURN
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 $8.6 million.
What is the period of performance?
Start: 2024-09-20. End: 2026-10-20.
What is Northrop Grumman's track record with similar EGI repair contracts for the Department of Defense?
Northrop Grumman Systems Corporation has a long history of providing complex systems and services to the Department of Defense, including navigation and guidance systems. While specific details on past EGI repair contracts are not publicly itemized in this data, the company's extensive experience with military avionics suggests a strong capability. Their involvement in the development and sustainment of various GPS and inertial navigation systems for military platforms indicates a deep understanding of the technology and operational requirements. Historical performance data, if available through government contract databases or performance reports, would provide a more granular view of their reliability, quality, and adherence to schedules for similar repair and return services.
How does the $8.57 million contract value compare to other EGI repair services or similar avionics repair contracts?
Benchmarking the $8.57 million contract value for EGI repair and return services is challenging without access to a broader dataset of comparable sole-source or competitively awarded contracts for similar avionics systems. The value is influenced by factors such as the complexity of the EGI system, the specific repair procedures required, the number of units to be serviced, and the duration of the contract (approximately two years). Given the specialized nature of military-grade navigation systems and the limited number of qualified repair providers, costs can be significantly higher than for more common electronic repairs. A thorough value analysis would require comparing this contract's unit repair costs, if discernible, against industry averages for high-reliability, mission-critical component repair, factoring in the sole-source aspect which inherently removes competitive pricing pressure.
What are the primary risks associated with awarding this contract on a sole-source basis?
The primary risk associated with awarding this contract on a sole-source basis is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, Northrop Grumman may not have the same incentive to offer the most cost-effective solution. Another significant risk is reduced innovation; a sole-source award limits the opportunity for other companies to propose alternative or more efficient repair methods. Furthermore, it creates a dependency on a single contractor, which can pose a supply chain risk if the contractor experiences production issues, financial instability, or decides to discontinue the service. This dependency also makes it difficult for the government to switch providers if performance issues arise or if a better value proposition emerges elsewhere.
What is the expected impact of this contract on the operational readiness of Air Force aircraft?
This contract is expected to have a positive impact on the operational readiness of Air Force aircraft that rely on the Embedded Global Positioning System / Inertial Navigation System (EGI). By ensuring the repair and return of these critical navigation components, the contract directly supports the availability and functionality of the aircraft's navigation and guidance capabilities. EGI systems are vital for mission success, enabling accurate navigation in diverse operational environments. Maintaining these systems through timely and effective repair services minimizes downtime for aircraft, ensuring that Air Force assets are available for training, deployment, and operational missions as needed. The two-year performance period suggests a sustained commitment to maintaining this readiness.
Are there any historical spending patterns with Northrop Grumman for EGI systems or similar navigation equipment?
Historical spending patterns with Northrop Grumman for EGI systems or similar navigation equipment are not detailed in the provided data. However, Northrop Grumman is a major defense contractor with a long-standing relationship with the Department of Defense, often involved in the sustainment and upgrade of complex avionics and navigation systems. To understand historical spending, one would need to analyze past contract awards to Northrop Grumman for EGI systems, related components, or similar navigation and guidance equipment across different military branches. This analysis would reveal trends in contract values, competition levels (sole-source vs. competed), and the duration and scope of services provided over time, offering insights into the government's long-term investment in these technologies and the contractor's role.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
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: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 91367
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: $8,573,600
Exercised Options: $8,573,600
Current Obligation: $8,573,600
Subaward Activity
Number of Subawards: 32
Total Subaward Amount: $9,198
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA857619D0001
IDV Type: IDC
Timeline
Start Date: 2024-09-20
Current End Date: 2026-10-20
Potential End Date: 2026-10-20 00:00:00
Last Modified: 2025-12-10
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