DoD's $143.8M contract for aircraft countermeasures sustains critical defense capabilities

Contract Overview

Contract Amount: $143,805,487 ($143.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-05-31

End Date: 2026-04-30

Contract Duration: 1,430 days

Daily Burn Rate: $100.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LARGE AIRCRAFT INFARED COUNTERMEASURES ACQUISITION SUSTAINMENT ENGINEERING REQUIREMENTS CROSS FUNCTIONAL

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $143.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LARGE AIRCRAFT INFARED COUNTERMEASURES ACQUISITION SUSTAINMENT ENGINEERING REQUIREMENTS CROSS FUNCTIONAL Key points: 1. Contract awarded to a single, established defense contractor, suggesting specialized capabilities. 2. The contract's duration of nearly four years indicates a long-term need for sustainment. 3. Fixed-price contract type aims to control costs, but requires careful monitoring of scope. 4. Focus on sustainment engineering suggests a need to maintain existing, vital defense systems. 5. Awarded by the Air Force, highlighting its importance to air combat readiness. 6. The North American Industry Classification System (NAICS) code 334419 points to electronic component manufacturing, a key area for advanced defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this sustainment contract is challenging without specific performance metrics or comparable sole-source awards. However, the fixed-price nature provides some cost control. The total value of $143.8 million over approximately four years suggests a significant investment in maintaining critical aircraft countermeasures, implying a substantial need. Further analysis would require understanding the scope of 'sustainment engineering requirements' and comparing the per-unit cost of services or components to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of a necessary component or service. While this ensures access to specialized expertise, it limits opportunities for price competition and may result in higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as the government lacks the leverage of competitive bidding. This necessitates robust oversight to ensure fair pricing and prevent cost overruns.

Public Impact

The primary beneficiaries are the U.S. Air Force and its aircrews, who rely on these countermeasures for survivability. Services delivered include sustainment engineering, ensuring the continued operational readiness of critical defense systems. The geographic impact is national, supporting Air Force operations worldwide. Workforce implications include maintaining specialized engineering and technical jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of competition may reduce incentives for innovation and efficiency from the contractor.
Sustainment contracts can become 'evergreen' if not carefully managed, leading to long-term, sole-source dependencies.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests access to established expertise and supply chains.
Fixed-price contract type provides a degree of cost certainty for the government.
The contract's duration indicates a commitment to maintaining critical defense capabilities, ensuring operational readiness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on electronic warfare and countermeasures. The market for such specialized components and sustainment services is often dominated by a few large, established defense contractors due to high barriers to entry, including R&D costs, security clearances, and specialized manufacturing capabilities. Spending in this area is critical for maintaining technological superiority and operational effectiveness of military aircraft.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Northrop Grumman actively engages small businesses for specific components or services not detailed here. Further investigation into subcontracting plans would be needed to assess potential small business involvement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, scrutiny on pricing, performance, and scope management is crucial. The Defense Contract Management Agency (DCMA) likely plays a role in contract administration and oversight. Transparency is facilitated through contract databases, but detailed performance metrics and cost breakdowns may be less accessible due to the sole-source nature and defense sensitivities.

Related Government Programs

Aircraft Survivability Equipment
Electronic Warfare Systems
Air Force Sustainment Programs
Defense Electronics Manufacturing
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award
Potential for cost overruns
Lack of competitive pricing
Long-term contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $143.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LARGE AIRCRAFT INFARED COUNTERMEASURES ACQUISITION SUSTAINMENT ENGINEERING REQUIREMENTS CROSS FUNCTIONAL

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 $143.8 million.

What is the period of performance?

Start: 2022-05-31. End: 2026-04-30.

What specific types of infrared countermeasures are covered under this sustainment contract?

The provided data does not specify the exact types of infrared countermeasures (IRCM) systems covered. However, 'LARGE AIRCRAFT INFRARED COUNTERMEASURES ACQUISITION SUSTAINMENT ENGINEERING REQUIREMENTS CROSS FUNCTIONAL' suggests a broad scope encompassing the sustainment of systems designed to protect large aircraft from infrared-guided missiles. This could include various components such as missile warning systems, jammers, flares, and chaff dispensers, along with the associated software and hardware requiring ongoing engineering support to ensure their effectiveness and reliability in evolving threat environments.

How does the $143.8 million value compare to historical spending on similar aircraft countermeasures sustainment?

Direct comparison of the $143.8 million value to historical spending on similar contracts is difficult without access to detailed historical data and specific contract line item numbers (CLINs). However, the amount represents a significant, multi-year investment by the Department of Defense, specifically the Air Force, for sustainment. Given the critical nature of countermeasures for large aircraft survivability, this level of funding is not unexpected for a sole-source contract covering engineering, maintenance, and potential upgrades over a period of nearly four years. Benchmarking would require identifying comparable sole-source sustainment contracts for similar platforms or systems.

What are the primary risks associated with a sole-source contract for critical defense sustainment?

The primary risks associated with this sole-source contract include potential cost overruns due to lack of competitive pricing, reduced contractor incentive to innovate or improve efficiency, and long-term dependency on a single supplier. Taxpayers may bear a higher cost compared to a competed contract. Furthermore, if the contractor faces financial difficulties or operational issues, it could disrupt the sustainment of critical defense capabilities. Ensuring robust government oversight, including detailed cost analysis and performance monitoring, is essential to mitigate these risks.

What is Northrop Grumman's track record with Department of Defense sustainment contracts, particularly for electronic warfare systems?

Northrop Grumman is a major defense contractor with extensive experience in sustainment and electronic warfare systems for the Department of Defense. They are known for producing and supporting a wide range of advanced technologies, including infrared countermeasures, radar systems, and other electronic warfare solutions across various military platforms. Their track record typically involves large, complex, long-term contracts. While specific performance details for every contract are not publicly available, their continued selection for significant sustainment programs indicates a generally accepted capability and reliability in meeting DoD requirements for critical systems.

How does the fixed-price contract type (PT) mitigate cost risks for the government in this sustainment effort?

The Firm Fixed Price (FFP) contract type is intended to provide the government with cost certainty. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This shifts the risk of cost overruns from the government to the contractor. For the government, this means the total expenditure is largely defined upfront, simplifying budget planning. However, it is crucial that the initial price is fair and reasonable, and that the scope of work is well-defined to prevent costly change orders or disputes.

What is the strategic importance of sustaining these infrared countermeasures for the Air Force's operational readiness?

Sustaining infrared countermeasures (IRCM) is strategically vital for the U.S. Air Force's operational readiness and aircrew survivability. These systems are designed to detect, jam, and decoy heat-seeking missiles, which pose a significant threat to aircraft in contested airspace. Ensuring these countermeasures are operational, reliable, and effective through dedicated sustainment engineering allows the Air Force to maintain its ability to project power, conduct missions safely, and protect its valuable assets and personnel. Without effective sustainment, the performance of these critical defensive systems would degrade, increasing vulnerability.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

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: $143,805,487

Exercised Options: $143,805,487

Current Obligation: $143,805,487

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $1,412,118

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA863819D0001

IDV Type: IDC

Timeline