DoD's $27.7M Contract for LAIRCM Integration on German A319CJ Aircraft Raises Questions
Contract Overview
Contract Amount: $27,744,976 ($27.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2013-05-22
End Date: 2017-06-30
Contract Duration: 1,500 days
Daily Burn Rate: $18.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: GERMANY HOS A319CJ LAIRCM INTEGRATION
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $27.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GERMANY HOS A319CJ LAIRCM INTEGRATION Key points: 1. The contract awarded to Northrop Grumman Systems Corporation for LAIRCM integration on German A319CJ aircraft lacks competitive justification. 2. The sole-source nature of this award limits price discovery and potentially increases costs for taxpayers. 3. The absence of competition and the firm-fixed-price structure present risks regarding cost control and value for money. 4. This contract falls under 'Other Electronic Component Manufacturing' but involves specialized aircraft modification.
Value Assessment
Rating: questionable
The contract value of $27.7 million for LAIRCM integration is difficult to assess without comparable contracts. The firm-fixed-price structure suggests an attempt to control costs, but the lack of competition hinders a true market-based valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This significantly limits price discovery and may lead to higher costs than if multiple vendors had competed.
Taxpayer Impact: The lack of competition for this sole-source contract means taxpayers may not be receiving the best possible price for this specialized defense system integration.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding for this specialized defense technology. The integration of LAIRCM systems is critical for aircraft survivability, impacting national security interests. The long duration of the contract (1500 days) suggests a complex integration process, requiring careful oversight.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Lack of price transparency.
- Potential for cost overruns without competitive pressure.
Positive Signals
- Awarded to a known defense contractor.
- Firm-fixed-price contract aims for cost certainty.
Sector Analysis
This contract falls under the 'Other Electronic Component Manufacturing' sector, specifically involving the integration of a sophisticated electronic warfare system (LAIRCM) onto aircraft. Spending benchmarks for such specialized defense integrations are highly variable and depend heavily on the specific system and platform.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large, sole-source defense contracts.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure the government is receiving fair value. The Department of the Air Force is responsible for monitoring performance and costs throughout the contract's duration.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Contract duration is lengthy, increasing risk exposure.
- No clear indication of small business participation.
- Limited transparency on cost justification.
Tags
other-electronic-component-manufacturing, department-of-defense, il, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GERMANY HOS A319CJ LAIRCM INTEGRATION
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 $27.7 million.
What is the period of performance?
Start: 2013-05-22. End: 2017-06-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of adequate competition. Without further documentation, it's unclear why Northrop Grumman was the only viable option. A thorough review would examine if market research was conducted to identify potential competitors or if a competitive process was deemed impractical or too costly.
How does the per-unit cost of this LAIRCM integration compare to similar systems installed on other aircraft platforms, considering the firm-fixed-price structure?
Comparing the per-unit cost is challenging without specific benchmarks for LAIRCM integration on A319CJ aircraft. While a firm-fixed-price contract aims for cost certainty, the absence of competition means this price isn't validated against market alternatives. A detailed cost analysis by the government, or comparison with publicly available data on similar defense system integrations, would be necessary to assess value.
What is the expected impact of this LAIRCM integration on the operational effectiveness and survivability of the German A319CJ aircraft?
LAIRCM (Large Aircraft Infrared Countermeasures) systems are designed to protect aircraft from infrared-guided missiles, significantly enhancing survivability. Integrating this system onto the German A319CJ aircraft is expected to bolster its defense capabilities, making it more resilient in potentially hostile environments. This directly contributes to the operational effectiveness of the platform for its intended missions.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $27,943,839
Exercised Options: $27,744,976
Current Obligation: $27,744,976
Subaward Activity
Number of Subawards: 65
Total Subaward Amount: $795,999,610
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-05-22
Current End Date: 2017-06-30
Potential End Date: 2017-06-30 00:00:00
Last Modified: 2017-07-20
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