DoD's $37.6M Northrop Grumman Contract for LASER X Software Sustainment Lacks Competition
Contract Overview
Contract Amount: $37,659,095 ($37.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2027-04-30
End Date: 2026-04-30
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: LARGE AIRCRAFT INFRARED COUNTERMEASURES ACQUISITION SYSTEMS ENGINEERING REQUIREMENT CROSS FUNCTIONAL (LASER X) CY24-26 SOFTWARE SUSTAINMENT
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $37.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LARGE AIRCRAFT INFRARED COUNTERMEASURES ACQUISITION SYSTEMS ENGINEERING REQUIREMENT CROSS FUNCTIONAL (LASER X) CY24-26 SOFTWARE SUSTAINMENT Key points: 1. Significant contract value ($37.6M) for critical aircraft countermeasures software sustainment. 2. Sole-source award to Northrop Grumman raises concerns about competitive pricing. 3. Limited competition may lead to higher costs and reduced innovation. 4. The sector is Other Electronic Component Manufacturing, with potential IT implications.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive benchmarks, assessing the value for money is difficult, especially given the sole-source nature.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and potentially increases costs for the government.
Taxpayer Impact: The absence of competition could result in taxpayers paying a premium for this software sustainment.
Public Impact
Ensures continued operational readiness of critical Air Force aircraft. Supports advanced infrared countermeasures technology. Potential for increased costs due to lack of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of transparency in pricing
Positive Signals
- Sustains critical defense technology
- Ensures aircraft survivability
Sector Analysis
This contract falls under Other Electronic Component Manufacturing, but the nature of the product (infrared countermeasures software) suggests significant IT and defense sector overlap. Benchmarks for similar specialized software sustainment contracts are often difficult to obtain due to proprietary technology.
Small Business Impact
The data indicates no specific set-aside for small businesses, and the prime contractor is Northrop Grumman, a large corporation. There is no information provided on subcontracting opportunities for small businesses.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. The Air Force should document the justification for not competing this requirement.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type can incentivize higher costs.
- Potential for price escalation without competitive pressure.
- Lack of small business participation noted.
Tags
other-electronic-component-manufacturing, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LARGE AIRCRAFT INFRARED COUNTERMEASURES ACQUISITION SYSTEMS ENGINEERING REQUIREMENT CROSS FUNCTIONAL (LASER X) CY24-26 SOFTWARE SUSTAINMENT
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 $37.7 million.
What is the period of performance?
Start: 2027-04-30. End: 2026-04-30.
What is the justification for awarding this contract sole-source, and has an adequate price analysis been performed?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. An adequate price analysis is crucial to ensure the government is not overpaying. This would involve comparing proposed costs to historical prices, independent government cost estimates, or prices paid for similar services by other agencies, though such comparisons are challenging for highly specialized systems.
What are the risks associated with relying on a single vendor for sustainment of critical countermeasures software?
The primary risks include vendor lock-in, potential price escalation over time, reduced incentive for innovation, and supply chain vulnerabilities if the vendor faces financial or operational difficulties. Dependence on one supplier can also limit the government's flexibility in adopting new technologies or making system-wide upgrades.
How will the effectiveness of the software sustainment be measured, and what are the key performance indicators?
Effectiveness is typically measured through metrics such as system uptime, response time to reported issues, successful implementation of patches and updates, and achievement of security requirements. Key Performance Indicators (KPIs) should be clearly defined in the contract to ensure the contractor meets performance expectations and the software remains functional and secure.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
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: $37,659,095
Exercised Options: $37,659,095
Current Obligation: $37,659,095
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
Start Date: 2027-04-30
Current End Date: 2026-04-30
Potential End Date: 2027-04-30 00:00:00
Last Modified: 2025-09-16
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