DoD's $355M Airborne Signals Intelligence Payload Contract with Northrop Grumman Lacks Competition
Contract Overview
Contract Amount: $355,461,336 ($355.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2010-12-14
End Date: 2014-12-05
Contract Duration: 1,452 days
Daily Burn Rate: $244.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: ACAT 1D LOT 8 AIRBORNE SIGNALS INTELLIGENCE PAYLOAD (ASIP) AND INTEGRATE INTO GLOBAL HAWK PRODUCTION AIR VEHICLE AF-30
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $355.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ACAT 1D LOT 8 AIRBORNE SIGNALS INTELLIGENCE PAYLOAD (ASIP) AND INTEGRATE INTO GLOBAL HAWK PRODUCTION AIR VEHICLE AF-30 Key points: 1. Significant investment in advanced intelligence capabilities for Global Hawk. 2. Sole-source award to Northrop Grumman raises concerns about price discovery. 3. Lack of competition may lead to higher costs for taxpayers. 4. The ASIP program is critical for maintaining air superiority and intelligence gathering.
Value Assessment
Rating: questionable
The contract's value of $355.46 million for an Airborne Signals Intelligence Payload is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives.
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, was considered. This significantly limits price discovery and potentially reduces the government's leverage in negotiations.
Taxpayer Impact: The absence of competition could result in taxpayers paying a premium for this critical intelligence capability.
Public Impact
Enhances intelligence, surveillance, and reconnaissance (ISR) capabilities for the Air Force. Supports the Global Hawk unmanned aerial vehicle program, a key strategic asset. Provides advanced signals intelligence processing and analysis in real-time. Contributes to national security by offering critical battlefield awareness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of demonstrated price competition
- Potential for cost overruns without market pressure
Positive Signals
- Critical national security capability
- Supports a key strategic platform (Global Hawk)
- Advanced technology development
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on advanced electronics and aircraft systems. Spending in this area is often characterized by high R&D costs and long procurement cycles, with competition varying significantly by program.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, which is common for sole-source, high-technology procurements.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective program execution. The Department of the Air Force is responsible for managing this contract and ensuring it meets performance requirements.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for higher costs due to lack of market pressure.
- Dependency on a single contractor for critical technology.
- No clear indication of small business participation.
Tags
aircraft-manufacturing, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $355.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ACAT 1D LOT 8 AIRBORNE SIGNALS INTELLIGENCE PAYLOAD (ASIP) AND INTEGRATE INTO GLOBAL HAWK PRODUCTION AIR VEHICLE AF-30
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 $355.5 million.
What is the period of performance?
Start: 2010-12-14. End: 2014-12-05.
What is the estimated cost savings that could have been achieved through a competitive bidding process for this ASIP contract?
Quantifying exact savings without a competitive process is challenging. However, historical data from similar sole-source procurements in the defense sector often suggests potential savings ranging from 10% to 30% when competition is introduced. This could translate to tens of millions of dollars for a contract of this magnitude.
What are the specific risks associated with relying on a single supplier for critical intelligence payloads like ASIP?
The primary risks include vendor lock-in, reduced innovation due to lack of competitive pressure, and potential supply chain vulnerabilities if the sole supplier faces operational issues. It also limits the government's ability to leverage market dynamics for better pricing and technological advancements.
How does the integration of ASIP into the Global Hawk platform impact the overall effectiveness of ISR missions?
Integrating ASIP significantly enhances the Global Hawk's capabilities by providing advanced, real-time signals intelligence directly on the platform. This allows for faster data processing and dissemination, improving situational awareness and enabling more responsive decision-making during complex ISR missions.
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
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $355,794,790
Exercised Options: $355,794,790
Current Obligation: $355,461,336
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-12-14
Current End Date: 2014-12-05
Potential End Date: 2014-12-05 00:00:00
Last Modified: 2022-07-25
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