DoD's $177M B-1 RADAR RMIP contract awarded to Northrop Grumman, a sole-source procurement

Contract Overview

Contract Amount: $177,049,923 ($177.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2016-01-31

Contract Duration: 1,949 days

Daily Burn Rate: $90.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: B-1 RADAR RELIABILITY AND MAINTAINABILITY IMPROVEMENT PROGRAM (RMIP) PRODUCTION

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $177.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: B-1 RADAR RELIABILITY AND MAINTAINABILITY IMPROVEMENT PROGRAM (RMIP) PRODUCTION Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant investment in aircraft manufacturing, specifically for radar reliability. 3. Contract duration of 1949 days suggests a long-term sustainment or upgrade effort. 4. Awarded by the Defense Contract Management Agency, indicating a focus on defense readiness. 5. The contract's value places it as a substantial procurement within its sector. 6. No small business set-aside, suggesting prime contractor focus on large-scale operations.

Value Assessment

Rating: questionable

Benchmarking the value of this $177 million contract is challenging without detailed cost breakdowns and comparisons to similar radar system upgrades. The sole-source nature raises concerns about whether the government secured the best possible price. Without competitive bids, it's difficult to assess if the pricing reflects fair market value for the services and components provided for the B-1 RADAR RMIP. Further analysis would require access to cost-plus data or comparable sole-source awards for similar defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corporation, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for specialized capabilities or existing systems, they inherently limit price competition and may result in higher costs for the government compared to a fully competed contract.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that typically arise from a bidding process. This could translate to a higher overall expenditure for this specific defense program.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the B-1 bomber, ensuring enhanced radar reliability and maintainability. Services delivered include improvements and sustainment for the B-1's radar systems, crucial for mission effectiveness. The geographic impact is primarily on military bases where B-1 bombers are stationed and maintained. Workforce implications include specialized roles within Northrop Grumman and potentially at maintenance depots for the B-1 aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in sole-source justifications requires careful review.
Long contract duration could lead to cost overruns if not managed tightly.
Reliance on a single contractor for critical radar systems poses a potential supply chain risk.

Positive Signals

Focus on improving reliability and maintainability of critical B-1 radar systems enhances operational readiness.
Award to an established defense contractor like Northrop Grumman suggests access to specialized expertise.
Contract addresses a specific, critical need for the B-1 bomber fleet.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components and systems. The market for military aircraft upgrades and sustainment is dominated by a few large prime contractors. Spending in this area is driven by defense budgets and the need to maintain the operational effectiveness of aging fleets. Comparable spending benchmarks would involve other major aircraft system upgrade programs, often valued in the hundreds of millions to billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, Northrop Grumman, is a large aerospace and defense company. While large prime contractors often engage small businesses as subcontractors, the absence of a specific set-aside suggests that the primary award was not directed towards small business participation. The subcontracting opportunities for small businesses would depend on Northrop Grumman's internal procurement strategies for this specific program.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance and quality standards. Accountability measures are embedded in the contract terms, including delivery schedules and performance metrics. Transparency is a concern with sole-source awards; while justifications are required, they are not always publicly detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

B-1 Bomber Sustainment Programs
Avionics Modernization Contracts
Defense Radar System Procurement
Northrop Grumman Defense Contracts
Aircraft Component Manufacturing

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Reliance on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $177.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. B-1 RADAR RELIABILITY AND MAINTAINABILITY IMPROVEMENT PROGRAM (RMIP) PRODUCTION

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $177.0 million.

What is the period of performance?

Start: 2010-09-30. End: 2016-01-31.

What is Northrop Grumman's track record with B-1 bomber systems or similar radar technology?

Northrop Grumman has a long history of involvement with the B-1 bomber program, including providing and supporting various systems. The company is a major defense contractor with extensive experience in radar systems, avionics, and aircraft modifications across multiple platforms. Their track record with the B-1 specifically includes previous sustainment, upgrade, and component support contracts. While specific details on past performance for this exact RMIP contract are not provided, Northrop Grumman's overall experience in complex defense systems suggests a capability to execute such a program. However, a thorough assessment would require reviewing past performance metrics, any documented issues, and customer satisfaction feedback related to their work on the B-1 or comparable radar systems.

How does the $177 million value compare to similar radar reliability improvement programs for other aircraft?

Comparing the $177 million value of this B-1 RADAR RMIP contract requires context regarding the scope, duration, and technological complexity of similar programs. Radar reliability and maintainability improvement programs can vary significantly. For large, strategic bombers like the B-1, upgrades can be extensive, involving significant hardware, software, and integration efforts, potentially driving costs higher than for smaller or less complex aircraft. Without specific details on what constitutes 'improvement' in this RMIP, direct comparisons are difficult. However, major avionics and radar modernization efforts for other high-value military aircraft platforms have often reached hundreds of millions, and sometimes billions, of dollars. The sole-source nature of this award also complicates direct value comparisons, as competitive procurements often yield lower prices.

What are the primary risks associated with a sole-source award for critical defense systems like the B-1 radar?

The primary risks associated with a sole-source award for critical defense systems like the B-1 radar include reduced price competition, potentially leading to higher costs for the government and taxpayers. There's also a risk of contractor complacency, as the lack of competitive pressure might lessen the incentive for maximum efficiency and innovation. Furthermore, sole-source awards can create dependency on a single supplier, posing supply chain risks if that supplier faces production issues, financial instability, or geopolitical challenges. Ensuring adequate oversight and robust contract management becomes even more critical to mitigate these risks and verify that the government is receiving fair value and high-quality performance.

How effective are radar reliability and maintainability improvement programs in enhancing overall aircraft mission capability?

Radar reliability and maintainability improvement programs are generally highly effective in enhancing overall aircraft mission capability. Radars are complex, critical systems for navigation, targeting, and situational awareness. Improving their reliability reduces the likelihood of mission-aborting failures during critical operations. Enhancing maintainability simplifies and speeds up repairs, reducing downtime and increasing aircraft availability for missions. For platforms like the B-1 bomber, where operational readiness is paramount, such improvements directly translate to a more capable and dependable air asset, ensuring that the aircraft can perform its intended missions successfully and safely.

What has been the historical spending trend for B-1 bomber radar sustainment and upgrades?

Historical spending trends for B-1 bomber radar sustainment and upgrades would likely show consistent investment over the aircraft's service life, reflecting the need to maintain aging technology and adapt to evolving threats. Early in the B-1's service, spending might have focused on initial operational capability and basic sustainment. As the aircraft matured, spending would shift towards modernization, reliability improvements, and addressing obsolescence, such as the RMIP contract. The total amount spent over decades can be substantial, often running into billions when considering all aspects of radar support, including parts, labor, software updates, and major overhauls. Specific figures would require detailed analysis of historical defense budget allocations and contract awards related to the B-1's radar systems.

What is the significance of the 'Aircraft Manufacturing' NAICS code (336411) in the context of this contract?

The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' signifies that the primary business activity related to this contract involves the manufacturing of aircraft and/or aircraft parts. In the context of the B-1 RADAR RELIABILITY AND MAINTAINABILITY IMPROVEMENT PROGRAM (RMIP) PRODUCTION contract, this code indicates that the work performed by Northrop Grumman likely involves the production or manufacturing of components, subassemblies, or potentially integrated systems related to the B-1's radar, falling under the broader umbrella of aircraft manufacturing. This code is crucial for statistical purposes, economic analysis, and understanding the industrial sector to which the contract belongs.

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: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $250,200,316

Exercised Options: $181,169,112

Current Obligation: $177,049,923

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline