DoD's $18.17M Global Hawk COMSEC Solution Awarded to Northrop Grumman Without Competition

Contract Overview

Contract Amount: $18,171,062 ($18.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2026-01-29

Contract Duration: 853 days

Daily Burn Rate: $21.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GLOBAL HAWK INTERIM COMMUNICATION SECURITY (COMSEC) SOLUTION 1B

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GLOBAL HAWK INTERIM COMMUNICATION SECURITY (COMSEC) SOLUTION 1B Key points: 1. This contract represents a sole-source award for a critical communication security solution for the Global Hawk program. 2. The absence of competition raises questions about potential price overruns and the lack of market-driven cost efficiencies. 3. The duration of the contract (over 2 years) suggests a need for sustained support, but the procurement method limits transparency. 4. Performance context is limited due to the sole-source nature, making external benchmarking difficult. 5. The contract falls within the Aircraft Manufacturing sector, supporting a key defense platform. 6. The firm-fixed-price structure aims to control costs, but the lack of competition may undermine this. 7. No small business set-aside was applied, indicating potential missed opportunities for smaller firms in this specialized area.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. While the firm-fixed-price (FFP) structure is generally favorable for cost control, the absence of competition means there's no direct market comparison to assess if the negotiated price represents optimal value for money. Without alternative proposals, it's difficult to determine if the $18.17 million is aligned with industry standards for similar security solutions or if there's potential for inflated costs. Further analysis would require access to internal cost breakdowns or historical data for comparable sole-source procurements.

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. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition means that Northrop Grumman was the only bidder, preventing a price discovery process driven by multiple offers. This procurement strategy limits the government's ability to leverage market forces to secure the best possible pricing and terms.

Taxpayer Impact: Taxpayers may be paying a premium for this critical communication security solution due to the absence of competitive pressure. Without competing offers, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher overall expenditure for the Department of Defense.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Air Force, ensuring secure communications for the Global Hawk unmanned aerial system. The services delivered include the provision and maintenance of a Communication Security (COMSEC) solution, vital for protecting sensitive data. The geographic impact is primarily within the operational theater of the Global Hawk, though the contractor's facility in California is involved. Workforce implications include specialized roles in cybersecurity, engineering, and logistics required to support this advanced defense system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to no competitive bidding.
Reliance on a single contractor for a critical security component could pose supply chain risks.
No small business participation noted, potentially limiting opportunities for smaller innovative firms.

Positive Signals

Firm-fixed-price contract structure aims to provide cost certainty.
Contract supports a critical defense asset (Global Hawk), ensuring operational readiness.
Northrop Grumman is an established defense contractor with experience in aerospace and defense systems.

Sector Analysis

The Global Hawk Interim Communication Security (COMSEC) Solution falls within the broader aerospace and defense sector, specifically supporting unmanned aerial systems (UAS). This sector is characterized by high technological complexity, significant government investment, and often long-term sustainment contracts. Comparable spending benchmarks are difficult to establish for specialized COMSEC solutions due to their unique nature and the proprietary technologies involved. However, the overall market for defense electronics and cybersecurity solutions is substantial, with major players like Northrop Grumman holding significant market share.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the available data. The sole-source nature of the award further limits the potential for small business involvement. This approach may overlook opportunities to foster innovation and competition within the small business defense industrial base for specialized cybersecurity solutions.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. As a sole-source award, the justification for the procurement method and the negotiated price will be subject to internal review. Transparency is limited due to the lack of public competition. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but the initial award process itself lacks the inherent transparency of a competitive bid.

Related Government Programs

Global Hawk Unmanned Aerial System Sustainment
DoD Cybersecurity Programs
Defense Communication Systems
Northrop Grumman Defense Contracts

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns
Critical security component dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GLOBAL HAWK INTERIM COMMUNICATION SECURITY (COMSEC) SOLUTION 1B

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 $18.2 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-01-29.

What is the specific nature of the 'interim' COMSEC solution being provided?

The term 'interim' suggests that this Communication Security (COMSEC) solution is a temporary measure or a bridge to a more permanent or advanced system. It likely addresses immediate security needs for the Global Hawk's communication channels while a long-term strategy is developed or implemented. The specific functionalities would involve encrypting/decrypting communications, managing cryptographic keys, and ensuring the integrity and confidentiality of data transmitted to and from the Global Hawk. The 'interim' status might imply a solution that is easier to deploy or adapt, but potentially less robust or feature-rich than a fully developed, long-term system. Further details on the specific technologies and their limitations would be necessary for a complete understanding.

Why was this contract awarded on a sole-source basis instead of being competed?

The contract was awarded on a sole-source basis, indicating that the Department of Defense (DoD) determined that Northrop Grumman Systems Corporation was the only responsible source capable of providing the required Global Hawk Interim Communication Security (COMSEC) Solution. Common justifications for sole-source awards include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when only one contractor possesses the necessary security clearances or infrastructure. Without specific documentation from the DoD justifying this sole-source determination (e.g., a Justification and Approval document), it is difficult to ascertain the precise reasons. However, for specialized defense systems like the Global Hawk, it is plausible that only the original equipment manufacturer or a highly specialized subcontractor possesses the requisite knowledge and access.

How does the $18.17 million cost compare to similar COMSEC solutions or previous contracts for the Global Hawk?

Direct comparison of the $18.17 million cost is challenging due to the sole-source nature of this award and the specific 'interim' designation of the COMSEC solution. Without competitive bids, there is no market benchmark to assess value for money. To evaluate this cost, one would need access to historical spending data for previous COMSEC solutions on the Global Hawk program, or data on similar sole-source procurements for other advanced military platforms. If this represents a significant increase over previous solutions or is disproportionately high compared to industry benchmarks for comparable security functionalities (even if not directly for the Global Hawk), it could indicate a potential lack of cost efficiency. Analysis of Northrop Grumman's cost breakdown, if available, would also be crucial.

What are the potential risks associated with relying on a single contractor for a critical security solution?

Relying on a single contractor, like Northrop Grumman in this case, for a critical security solution like the Global Hawk COMSEC system presents several risks. Firstly, there's a risk of vendor lock-in, where the government becomes heavily dependent on one supplier, potentially limiting future flexibility and negotiation power. Secondly, a sole-source arrangement can reduce competitive pressure, potentially leading to higher prices and less incentive for innovation or efficiency improvements over time. Thirdly, supply chain disruptions affecting the sole provider could have a significant impact on the operational readiness of the Global Hawk. Finally, if the contractor experiences financial difficulties or strategic shifts, the government might face challenges in ensuring the continued availability and support of this essential security component.

What is Northrop Grumman's track record with the Global Hawk program and similar defense contracts?

Northrop Grumman has a significant and long-standing track record with the Global Hawk program, having been the prime contractor responsible for its development and production. This deep involvement provides them with extensive institutional knowledge of the platform's systems, including its communication and security requirements. Beyond the Global Hawk, Northrop Grumman is a major defense contractor with a broad portfolio encompassing aerospace, defense electronics, and information systems. They have a history of delivering complex systems to the Department of Defense and other government agencies. While their experience is extensive, the specific performance on this particular 'interim' COMSEC solution, especially under a sole-source award, would require a more granular review of past performance metrics and delivery history.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA869023B1002

Pricing Type: FIRM FIXED PRICE (J)

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: $18,363,560

Exercised Options: $18,363,560

Current Obligation: $18,171,062

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $8,253,892

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA869021D1009

IDV Type: IDC

Timeline