DoD Awards Northrop Grumman $138.6M for Radar Sustainment, Raising Value Concerns
Contract Overview
Contract Amount: $138,629,538 ($138.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-06-01
End Date: 2023-09-30
Contract Duration: 1,947 days
Daily Burn Rate: $71.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF: :OT: :IGF SUSTAINMENT SERVICES FOR BMEWS/PAVE PAWS RADARS
Place of Performance
Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $138.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF: :OT: :IGF SUSTAINMENT SERVICES FOR BMEWS/PAVE PAWS RADARS Key points: 1. Significant contract value of $138.6M for sustainment services. 2. Sole incumbent provider, Northrop Grumman, raises competition questions. 3. Potential risk associated with long-term sustainment of critical radar systems. 4. Defense sector spending on specialized engineering services.
Value Assessment
Rating: questionable
The contract value of $138.6M for sustainment services appears high given the lack of readily available benchmark data for similar long-term radar sustainment contracts. Without competitive pricing, it's difficult to definitively assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under full and open competition, but the specific nature of sustainment services for BMEWS/PAVE PAWS radars may limit the number of capable bidders. This could impact price discovery and potentially lead to higher costs.
Taxpayer Impact: Taxpayer funds are being used for critical defense infrastructure sustainment. The effectiveness of the competition method in securing optimal pricing is a key consideration for taxpayer impact.
Public Impact
Ensures continued operational readiness of critical early warning radar systems. Supports national security by maintaining surveillance capabilities. Potential for cost overruns if sustainment costs are not tightly managed. Impacts the defense industrial base through significant contract awards.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clear competition
- Potential for cost creep
- Long-term sustainment dependency
Positive Signals
- Ensures critical system availability
- Supports national security mission
Sector Analysis
This contract falls within the defense sector, specifically for engineering services related to specialized radar systems. Spending benchmarks for similar long-term sustainment contracts are difficult to ascertain due to the unique nature of the equipment.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation in this specific award, which is common for large, specialized defense contracts.
Oversight & Accountability
Oversight is provided by the Defense Contract Management Agency. The firm fixed-price contract type provides some cost control, but ongoing monitoring is crucial to ensure performance and prevent scope creep.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for sole-source dependency
- High contract value without clear benchmarks
- Long-term sustainment risks
- Limited visibility into specific sustainment tasks
Tags
engineering-services, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $138.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF: :OT: :IGF SUSTAINMENT SERVICES FOR BMEWS/PAVE PAWS RADARS
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $138.6 million.
What is the period of performance?
Start: 2018-06-01. End: 2023-09-30.
What is the justification for the limited competition in sustaining these specific radar systems, and how does it impact the overall cost-effectiveness?
The justification for limited competition likely stems from the highly specialized knowledge and proprietary access required to maintain the BMEWS/PAVE PAWS radar systems. This specialization can reduce the pool of eligible contractors, potentially leading to higher prices compared to more commoditized services. The government must ensure rigorous negotiation and oversight to mitigate this risk.
What are the long-term risks associated with relying on a single contractor for the sustainment of critical early warning radar infrastructure?
Long-term reliance on a single contractor creates a dependency that can lead to price escalation over time, reduced innovation, and potential vulnerabilities if the contractor faces financial instability or strategic shifts. It also limits the government's ability to leverage competitive market forces for better terms and services.
How effectively does the firm fixed-price contract type manage the financial risks for the government in this long-term sustainment scenario?
A firm fixed-price contract aims to transfer cost risk to the contractor. However, for complex, long-term sustainment, unforeseen technical issues or obsolescence can still lead to change orders or claims, increasing costs. Effective management requires robust baseline scope definition and diligent oversight to prevent contractor-initiated cost increases.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 14119 SULLYFIELD CIR STE A, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $153,684,007
Exercised Options: $153,684,007
Current Obligation: $138,629,538
Actual Outlays: $4,996,799
Subaward Activity
Number of Subawards: 1603
Total Subaward Amount: $608,677,443
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA872318D0001
IDV Type: IDC
Timeline
Start Date: 2018-06-01
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 00:00:00
Last Modified: 2025-10-28
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)