DoD's $12.7M contract for ACS 4.0 Production Install awarded to Northrop Grumman Systems Corp

Contract Overview

Contract Amount: $12,740,652 ($12.7M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2024-11-01

End Date: 2026-03-31

Contract Duration: 515 days

Daily Burn Rate: $24.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACS 4.0 PRODUCTION INSTALL

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: ACS 4.0 PRODUCTION INSTALL Key points: 1. Value for money assessment pending detailed cost analysis and benchmarking. 2. Sole-source award limits competitive dynamics and potential for price discovery. 3. Risk indicators include sole-source nature and potential for cost overruns. 4. Performance context relies on contractor's historical delivery and system integration capabilities. 5. Sector positioning within Aircraft Manufacturing (NAICS 336411) is specialized. 6. Contract duration of 515 days suggests a significant implementation phase.

Value Assessment

Rating: questionable

The contract value of $12.7 million for an 'ACS 4.0 Production Install' is difficult to assess without specific details on the scope of work and deliverables. Given the sole-source nature, a direct comparison to similar contracts is challenging. Benchmarking the value requires understanding the specific technology and services provided by Northrop Grumman Systems Corp. The firm fixed-price contract type offers some cost certainty, but the overall value proposition hinges on the successful implementation and operational effectiveness of the system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when a specific contractor possesses unique capabilities or when urgency precludes a competitive process. The lack of multiple bidders means that the government did not benefit from a range of proposals and price points, potentially leading to a higher cost than if the contract had been competed.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. The sole-source award limits opportunities for cost savings that could have been realized through a more open procurement process.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Air Force, which will receive the ACS 4.0 Production Install. The services delivered are related to the production and installation of an 'ACS 4.0' system, likely an advanced command and control or communication system. The geographic impact is centered in California, where the contract is being performed. Workforce implications may include specialized technical roles for installation, integration, and testing of the new system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award raises concerns about price reasonableness and potential lack of innovation.
Limited competition could result in less favorable contract terms.
Dependence on a single contractor for critical system installation.
Potential for scope creep or change orders given the complexity of production installs.

Positive Signals

Firm fixed-price contract provides cost predictability.
Contractor, Northrop Grumman Systems Corp, is a major defense contractor with extensive experience.
Specific system 'ACS 4.0' suggests an upgrade or new capability for the Air Force.

Sector Analysis

The Aircraft Manufacturing sector (NAICS 336411) is a highly specialized and capital-intensive industry focused on the design, development, and production of aircraft and related components. This contract likely falls within the defense sub-sector, involving advanced systems integration for military aviation. Comparable spending benchmarks are difficult to establish without knowing the exact nature of 'ACS 4.0', but large-scale system installations for defense applications can range from millions to billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses mandated by this specific award. The prime contractor, Northrop Grumman, may engage small businesses as subcontractors, but this is not a requirement of this particular contract. The absence of a set-aside means opportunities for small businesses to directly compete for this work are limited.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring delivery of specified goods and services. Transparency may be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Production Act Investments
Aircraft System Modernization Programs
Air Force Command and Control Systems
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (inherent in complex installs)
Contract performance risk (dependent on contractor execution)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to NORTHROP GRUMMAN SYSTEMS CORP. ACS 4.0 PRODUCTION INSTALL

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

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 $12.7 million.

What is the period of performance?

Start: 2024-11-01. End: 2026-03-31.

What is the specific functionality and purpose of the 'ACS 4.0' system being installed?

The provided data does not specify the exact functionality of the 'ACS 4.0' system. However, given the contractor (Northrop Grumman Systems Corp) and the agency (Department of the Air Force), it is highly probable that 'ACS' refers to an 'Advanced Command System' or a similar critical communication and control platform. These systems are vital for coordinating military operations, managing airspace, and ensuring secure communication channels. The '4.0' designation suggests it is a fourth-generation iteration, implying significant technological advancements over previous versions, potentially incorporating enhanced data processing, improved user interfaces, and greater network integration capabilities.

What is Northrop Grumman Systems Corp's track record with similar 'ACS' or command system installations for the Department of Defense?

Northrop Grumman Systems Corp has a substantial track record in developing and integrating complex systems for the Department of Defense, including command, control, communications, computers, and intelligence (C4I) solutions. They are a prime contractor on numerous large-scale defense programs, often involving sophisticated software and hardware integration. While specific details on their past 'ACS' installations are not provided, their extensive experience with programs like the B-2 bomber, E-2 Hawkeye, and various missile defense systems demonstrates their capability in handling large, complex, and critical technology deployments. Their history suggests a strong capacity for production and installation, though performance can vary across individual contracts.

How does the $12.7 million contract value compare to typical costs for similar production and installation projects in the defense sector?

The $12.7 million contract value for an 'ACS 4.0 Production Install' is moderate for a defense sector system installation, especially considering it's a sole-source award to a major contractor like Northrop Grumman. However, without knowing the precise scope, complexity, and duration of the 'ACS 4.0' system's implementation, a direct comparison is difficult. Simpler software installations or hardware upgrades might cost less, while comprehensive, ground-up system integrations for major platforms (like aircraft or ships) can easily run into tens or hundreds of millions. The firm fixed-price nature suggests a defined scope, but the 'production install' aspect implies significant effort. Benchmarking would require access to more detailed project specifications and cost breakdowns.

What are the primary risks associated with a sole-source award for a critical system installation like this?

The primary risks associated with a sole-source award for a critical system installation include potential lack of price competition, which can lead to higher costs for the government. There's also a risk of reduced innovation, as the contractor may face less pressure to find the most efficient or advanced solutions compared to a competitive environment. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future. Dependence on a single supplier also increases vulnerability if that supplier experiences financial difficulties, operational issues, or fails to meet delivery timelines. Finally, without competitive proposals, it can be harder to objectively assess the contractor's technical approach and overall value proposition.

What are the historical spending patterns for 'Aircraft Manufacturing' (NAICS 336411) by the Department of the Air Force?

Historical spending patterns for 'Aircraft Manufacturing' (NAICS 336411) by the Department of the Air Force are substantial, reflecting the branch's reliance on advanced aerial platforms and associated systems. This sector typically involves significant investments in research and development, procurement of new aircraft, and sustainment/modernization of existing fleets. Major contracts often include airframe production, engine manufacturing, avionics integration, and specialized system installations, similar to the 'ACS 4.0' contract. Spending in this area fluctuates based on modernization cycles, new program starts, and geopolitical demands. While the $12.7 million for this specific install is a fraction of the total, it represents a component of the broader Air Force's commitment to maintaining and advancing its aviation capabilities.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: 3520 E AVENUE M, PALMDALE, CA, 93550

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: $16,798,520

Exercised Options: $12,740,652

Current Obligation: $12,740,652

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $1,389,851

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA861624DB001

IDV Type: IDC

Timeline