DoD Awards Northrop Grumman $165.5M Global Hawk Support Contract with No Competition
Contract Overview
Contract Amount: $165,457,090 ($165.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2021-04-29
End Date: 2029-01-31
Contract Duration: 2,834 days
Daily Burn Rate: $58.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: JAPAN GLOBAL HAWK CONTRACTOR LOGISTIC SUPPORT CONTRACT
Place of Performance
Location: SIERRA VISTA, COCHISE County, ARIZONA, 85635
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $165.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JAPAN GLOBAL HAWK CONTRACTOR LOGISTIC SUPPORT CONTRACT Key points: 1. Contract awarded to a single, established provider for specialized Global Hawk support. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Long-term contract duration (2029) suggests ongoing reliance on this specific provider. 4. Engineering services sector often involves complex, specialized requirements.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to benchmark pricing effectively against similar services. The awarded amount of $165.5M over its duration warrants scrutiny to ensure fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to drive down prices.
Taxpayer Impact: The absence of competition for this significant contract may result in taxpayers paying a premium for engineering services, as alternative, potentially more cost-effective solutions were not explored.
Public Impact
Taxpayers may be overpaying for essential Global Hawk maintenance and support. Limited visibility into the justification for a sole-source award. Potential for reduced technological advancement due to lack of competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of competition
Positive Signals
- Supports critical defense asset (Global Hawk)
- Experienced contractor
- Clear contract end date
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), which typically involves specialized technical expertise for complex systems like military aircraft. Benchmarking spending in this niche requires comparison with other high-value, specialized defense support contracts.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Air Force to ensure the contractor is performing efficiently and that costs are reasonable. Transparency regarding the justification for not competing the contract is crucial.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contract type offers limited incentive for contractor cost control.
- Sole-source award raises questions about market research and alternative solutions.
- Long contract duration could create vendor lock-in.
- Potential for reduced innovation due to absence of competitive pressure.
Tags
engineering-services, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $165.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JAPAN GLOBAL HAWK CONTRACTOR LOGISTIC SUPPORT CONTRACT
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 $165.5 million.
What is the period of performance?
Start: 2021-04-29. End: 2029-01-31.
What specific factors justified the sole-source award for Global Hawk contractor logistic support, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems. For the Global Hawk, this could relate to specialized knowledge of the platform's complex avionics, software, and maintenance requirements, held exclusively by Northrop Grumman. A thorough review would confirm if these factors were documented and if any market research was conducted to explore potential competition, even for specific task orders.
How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and potential overruns in this sole-source contract?
The CPFF structure incentivizes the contractor to incur costs, as their fixed fee is a percentage of those costs. While it provides the government with cost certainty on the fee, it offers less incentive for the contractor to control overall project expenses compared to fixed-price contracts. In a sole-source scenario, this structure heightens the risk of cost overruns and requires diligent government oversight to scrutinize allowable costs and ensure efficiency.
What is the long-term strategic implication of awarding such a significant, non-competed contract for a key defense asset like the Global Hawk?
Awarding a long-term, sole-source contract for critical support can create vendor lock-in, potentially stifling innovation and making it difficult to transition to new technologies or providers in the future. It also concentrates significant spending with one entity, potentially limiting opportunities for other capable firms. This approach requires careful consideration of the asset's lifecycle and future modernization plans to ensure sustained value and adaptability.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 4067 ENTERPRISE WAY, SIERRA VISTA, AZ, 85635
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $179,139,424
Exercised Options: $179,139,424
Current Obligation: $165,457,090
Subaward Activity
Number of Subawards: 151
Total Subaward Amount: $57,510,850
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-04-29
Current End Date: 2029-01-31
Potential End Date: 2029-01-31 00:00:00
Last Modified: 2025-11-24
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