DoD's $34.3M contract for ASIP U-2 SE PHASE II awarded to Northrop Grumman for navigation systems

Contract Overview

Contract Amount: $34,292,893 ($34.3M)

Contractor: Northrop Grumman Space & Mission Systems Corp.

Awarding Agency: Department of Defense

Start Date: 2007-05-24

End Date: 2010-01-31

Contract Duration: 983 days

Daily Burn Rate: $34.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ASIP U-2 SE PHASE II

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95119

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $34.3 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP. for work described as: ASIP U-2 SE PHASE II Key points: 1. Contract awarded for critical navigation and guidance systems, essential for U-2 aircraft operations. 2. Northrop Grumman, a major defense contractor, secured this firm-fixed-price contract. 3. The contract duration of 983 days suggests a significant, multi-year effort. 4. Awarded under full and open competition, indicating a potentially competitive bidding process. 5. The contract value of $34.3 million falls within a typical range for specialized aerospace systems. 6. Focus on Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.

Value Assessment

Rating: good

The contract value of $34.3 million for the ASIP U-2 SE PHASE II appears reasonable for specialized aerospace systems manufacturing. Benchmarking against similar contracts for navigation and guidance systems would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that cost risks are largely borne by the contractor, which can be beneficial for the government if managed effectively. However, without detailed cost breakdowns or comparisons to industry standards for similar components, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was intended to be open, specific sources may have been excluded for particular reasons. The number of bidders is not specified, but the 'full and open' designation suggests multiple entities had the opportunity to bid. This level of competition is generally favorable for price discovery and achieving competitive pricing.

Taxpayer Impact: A full and open competition, even with exclusions, generally leads to better pricing for taxpayers compared to sole-source or limited competition scenarios, as it encourages multiple vendors to offer their best terms.

Public Impact

The primary beneficiaries are the U.S. Air Force, which operates the U-2 reconnaissance aircraft, ensuring the continued functionality of its navigation and guidance systems. The contract delivers essential components and services for the ASIP U-2 SE PHASE II program, crucial for mission success. The geographic impact is primarily within the United States, likely involving manufacturing and testing facilities, with the ultimate operational impact on global reconnaissance missions. Workforce implications include skilled engineers, technicians, and manufacturing personnel within Northrop Grumman and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise in the specialized manufacturing process.
Dependence on a single prime contractor, Northrop Grumman, for critical system components.
Risk of schedule delays impacting the operational readiness of U-2 aircraft if production or integration issues occur.

Positive Signals

Firm-fixed-price contract structure shifts cost risk to the contractor.
Awarded through a competitive process, suggesting potential for optimized pricing.
Northrop Grumman's established track record in aerospace and defense systems.
Focus on essential navigation and guidance systems, critical for aircraft safety and mission effectiveness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced navigation and guidance systems for military aircraft. The market for such specialized components is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Comparable spending benchmarks would involve analyzing other contracts for similar avionics and system integration for high-value military platforms, which typically represent significant investments.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration (ss: false, sb: false). While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on Northrop Grumman's internal policies and the specific needs of the program, potentially impacting the small business ecosystem within the aerospace supply chain.

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 embedded in the firm-fixed-price contract terms, requiring delivery of specified systems. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns are typically not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Airborne Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Aerospace Navigation and Guidance Systems
Military Aircraft Avionics
Defense Research and Development
U-2 Aircraft Sustainment Programs

Risk Flags

Potential for sole-source justification if 'exclusion of sources' was extensive.
Firm-fixed-price contracts can sometimes lead to less contractor flexibility on changes.
Long contract duration increases exposure to economic fluctuations and technological obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.3 million to NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.. ASIP U-2 SE PHASE II

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SPACE & MISSION 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 $34.3 million.

What is the period of performance?

Start: 2007-05-24. End: 2010-01-31.

What is Northrop Grumman's historical performance on similar aerospace system contracts with the Department of Defense?

Northrop Grumman has a long and extensive history of delivering complex aerospace and defense systems to the Department of Defense. They are a prime contractor on numerous high-value programs, including aircraft, spacecraft, and advanced electronics. While specific performance metrics for individual contracts are often not public, the company's continued success in securing large, competitive contracts suggests a generally positive track record. However, like any large defense contractor, they have faced scrutiny and challenges on specific programs related to cost, schedule, and performance. A detailed review of past performance evaluations and contract modifications for similar navigation and guidance system contracts would be necessary for a comprehensive assessment.

How does the $34.3 million contract value compare to industry benchmarks for similar navigation and guidance system development and manufacturing?

Benchmarking the $34.3 million contract value requires comparing it to similar contracts for the development and manufacturing of specialized navigation and guidance systems for military aircraft. Factors such as system complexity, technological maturity, required performance specifications, and production volume significantly influence cost. Contracts for advanced avionics, especially for platforms like the U-2 which require highly specialized and reliable systems, can range from tens to hundreds of millions of dollars. Without specific details on the system's components and capabilities, a precise benchmark is difficult. However, for a multi-year development and production effort for a critical aircraft system, $34.3 million appears to be within a plausible range, assuming it covers a defined scope of work and not the entire lifecycle sustainment or upgrade.

What are the primary risks associated with this specific contract, and how are they being mitigated?

The primary risks associated with this contract include technical challenges in developing and manufacturing highly specialized navigation and guidance systems, potential schedule delays impacting U-2 operational readiness, and cost overruns, although the firm-fixed-price structure mitigates the latter for the government. Mitigation strategies likely involve rigorous program management by both the Air Force and Northrop Grumman, phased development and testing, robust quality assurance processes, and clear contractual milestones. The 'exclusion of sources' in the competition might indicate specific technical requirements or past performance considerations that narrowed the field, potentially reducing some risks but also limiting broader competition. Continuous monitoring of technical progress and supplier performance is crucial.

What is the expected impact of this contract on the operational capabilities and readiness of the U-2 reconnaissance aircraft fleet?

This contract is expected to have a direct and positive impact on the operational capabilities and readiness of the U-2 reconnaissance aircraft fleet by ensuring the availability of updated or replacement navigation and guidance systems. These systems are fundamental to the aircraft's ability to perform its intelligence, surveillance, and reconnaissance (ISR) missions safely and effectively. By providing these critical components, the contract helps sustain the U-2's long-term viability and its role in national security. The 'SE PHASE II' designation suggests this is part of an ongoing effort to enhance or maintain these systems, implying improvements or continued high performance levels for the fleet.

How has spending on U-2 aircraft sustainment and modernization programs evolved over the past five years?

Spending on U-2 aircraft sustainment and modernization programs has been a consistent, albeit evolving, part of the Air Force's budget. While specific figures for 'ASIP U-2 SE PHASE II' are tied to this individual contract, overall spending on the U-2 fleet reflects its continued importance for strategic ISR missions, even as newer platforms are developed. Historically, the U-2 program has required significant investment in sustainment, upgrades, and specialized systems like navigation and guidance. Recent trends may show a shift towards extending the life of the U-2 while simultaneously investing in future ISR capabilities, meaning spending on programs like this one remains critical for maintaining current operational readiness. Detailed budget documents and historical contract awards would provide precise spending trends.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 6377 SAN IGNACIO AVE, SAN JOSE, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $34,292,893

Exercised Options: $34,292,893

Current Obligation: $34,292,893

Contract Characteristics

Cost or Pricing Data: YES

Timeline