DoD Awards Northrop Grumman $1.7B for F-16 AESA Radar Systems, Sole-Source Contract
Contract Overview
Contract Amount: $1,705,212,208 ($1.7B)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-05-31
End Date: 2028-12-12
Contract Duration: 4,213 days
Daily Burn Rate: $404.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: F-16 ACTIVE ELECTRONICALLY SCANNED ARRAY JOINT EMERGENT OPERATIONAL NEED
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $1.71 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: F-16 ACTIVE ELECTRONICALLY SCANNED ARRAY JOINT EMERGENT OPERATIONAL NEED Key points: 1. Northrop Grumman is the sole provider for this critical F-16 radar upgrade. 2. The contract value is substantial at $1.7 billion, indicating significant investment. 3. A sole-source award raises concerns about price discovery and potential overspending. 4. This spending falls within the aerospace and defense sector, characterized by high R&D costs.
Value Assessment
Rating: questionable
The contract is Cost Plus Fixed Fee, which can lead to higher costs than fixed-price contracts. Without competitive bidding, it's difficult to assess if the pricing is reasonable compared to similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning Northrop Grumman was the only source considered. This lack of competition limits price negotiation and may result in higher costs for the government.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium due to the absence of competitive pressure to reduce costs.
Public Impact
Enhances F-16 fighter jet capabilities with advanced radar technology. Supports ongoing modernization efforts for a key military asset. Ensures continued operational readiness for the Air Force. Potential for technological advancements in electronic warfare and targeting.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition
- Cost-plus contract type can inflate costs
- Long contract duration (2017-2028)
- Lack of transparency in pricing
Positive Signals
- Critical technology upgrade for F-16 fleet
- Supports national defense objectives
- Long-term sustainment and development
Sector Analysis
This contract is within the aerospace and defense sector, specifically for advanced radar systems. Spending benchmarks for similar complex defense systems are typically high, but competitive pricing is crucial for efficiency.
Small Business Impact
The data provided does not indicate any subcontracting opportunities for small businesses. The prime contractor is a large corporation, suggesting limited direct benefit to SMBs in this specific award.
Oversight & Accountability
The Department of the Air Force is responsible for oversight. Given the sole-source and cost-plus nature, robust oversight is critical to ensure cost control and contract compliance.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of competitive benchmarking
- Long contract duration
- Potential for cost overruns
Tags
search-detection-navigation-guidance-aer, department-of-defense, md, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.71 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION. F-16 ACTIVE ELECTRONICALLY SCANNED ARRAY JOINT EMERGENT OPERATIONAL NEED
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 $1.71 billion.
What is the period of performance?
Start: 2017-05-31. End: 2028-12-12.
What is the estimated cost savings if this contract had been competitively procured?
Quantifying exact savings from a hypothetical competition is challenging. However, sole-source, cost-plus contracts often result in higher prices than competitive, fixed-price agreements. Industry analysis suggests competitive bidding can yield savings of 10-30% or more on complex systems, depending on market dynamics and technology maturity.
What are the specific risks associated with relying on a single supplier for this critical technology?
Sole-source reliance creates significant risks, including potential price gouging, lack of innovation due to absent competition, and supply chain vulnerability. If Northrop Grumman faces production issues or decides to discontinue the product line, the Air Force would have limited alternatives, potentially impacting F-16 readiness.
How does the performance of this radar system compare to available commercial or international alternatives?
The F-16 AESA radar is a highly specialized military system designed for specific combat requirements, likely exceeding the capabilities of most commercial or general international alternatives. However, without competitive benchmarking, it's difficult to ascertain if its performance justifies the cost relative to potentially comparable, albeit non-identical, systems.
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
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580B W NURSERY RD MS B585, LINTHICUM HEIGHTS, MD, 21090
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: $2,367,671,978
Exercised Options: $1,785,229,345
Current Obligation: $1,705,212,208
Actual Outlays: $115,487,511
Subaward Activity
Number of Subawards: 330
Total Subaward Amount: $38,832,638
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-05-31
Current End Date: 2028-12-12
Potential End Date: 2031-05-31 00:00:00
Last Modified: 2025-12-18
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