DoD Awards Northrop Grumman $61.2M for NATO Alliance Ground Surveillance
Contract Overview
Contract Amount: $61,225,101 ($61.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-08-31
End Date: 2029-04-30
Contract Duration: 2,069 days
Daily Burn Rate: $29.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NORTH ALLIANCE TREATY ORGANIZATION ALLIANCE GROUND SURVEILLANCE
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $61.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: NORTH ALLIANCE TREATY ORGANIZATION ALLIANCE GROUND SURVEILLANCE Key points: 1. Significant investment in NATO's intelligence, surveillance, and reconnaissance capabilities. 2. Sole-source award to Northrop Grumman highlights potential lack of alternatives or specialized expertise. 3. Long contract duration (2029) suggests a sustained need for these services. 4. Focus on aircraft manufacturing indicates a critical component of defense infrastructure.
Value Assessment
Rating: fair
The contract value of $61.2M over approximately 5.7 years needs further benchmarking against similar ISR platform sustainment contracts. Without comparable data, assessing optimal pricing is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs compared to a competitive environment.
Taxpayer Impact: Taxpayer funds are being allocated without competitive pressure, potentially leading to less cost-effective outcomes.
Public Impact
Enhances NATO's ability to monitor ground threats across its operational areas. Supports intelligence gathering and decision-making for allied forces. Contributes to the overall security and stability of the Euro-Atlantic region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Cost-plus contract type
Positive Signals
- Critical national security asset
- Supports alliance interoperability
Sector Analysis
This contract falls within the defense sector, specifically aircraft manufacturing, supporting intelligence, surveillance, and reconnaissance (ISR) platforms. Spending in this area is often driven by geopolitical needs and technological advancements.
Small Business Impact
The data indicates this is a large prime contract awarded to Northrop Grumman, a major defense contractor. There is no information provided on subcontracting opportunities for small businesses.
Oversight & Accountability
Oversight will be crucial given the sole-source nature and cost-plus contract type to ensure funds are used efficiently and effectively for the intended purpose of enhancing NATO's surveillance capabilities.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type carries inherent cost overrun risk.
- Long contract duration may not reflect evolving technological needs.
- Lack of small business participation noted.
Tags
aircraft-manufacturing, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. NORTH ALLIANCE TREATY ORGANIZATION ALLIANCE GROUND SURVEILLANCE
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 $61.2 million.
What is the period of performance?
Start: 2023-08-31. End: 2029-04-30.
What is the justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. For the NATO AGS program, it's likely related to the specialized nature of the platform and its integration within the alliance's existing infrastructure. Further documentation would be needed to confirm the specific reasons and explore if any market research was conducted to identify potential competitors.
How does the cost-plus fixed fee structure impact potential cost overruns and contractor incentives?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it incentivizes the contractor to complete the work, it shifts the risk of cost overruns to the government. This structure requires robust oversight to manage costs and ensure the fixed fee remains appropriate for the scope of work.
What are the key performance indicators (KPIs) for this contract to measure its effectiveness?
Key performance indicators for this contract would likely focus on the operational readiness and availability of the Alliance Ground Surveillance system, the timeliness and accuracy of intelligence provided, system uptime, and adherence to maintenance schedules. Measuring the system's contribution to NATO mission objectives and threat detection would also be crucial for assessing overall effectiveness.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
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: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
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: $62,686,027
Exercised Options: $62,686,027
Current Obligation: $61,225,101
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $2,964,510
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-08-31
Current End Date: 2029-04-30
Potential End Date: 2029-04-30 00:00:00
Last Modified: 2025-08-19
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