Northrop Grumman awarded $316M for E-11A BACN platform maintenance, a critical airborne communications system
Contract Overview
Contract Amount: $315,935,949 ($315.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-09-24
End Date: 2023-04-23
Contract Duration: 2,037 days
Daily Burn Rate: $155.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT::IGF BATTLEFIELD AIRBORNE COMMUNICATIONS NODE E-11A PLATFORM MAINTENANCE
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $315.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF BATTLEFIELD AIRBORNE COMMUNICATIONS NODE E-11A PLATFORM MAINTENANCE Key points: 1. Contract value of $316M over six years suggests significant investment in maintaining a specialized communication platform. 2. Full and open competition indicates a potentially competitive bidding process, which can lead to better pricing. 3. The contract type (Cost Plus Fixed Fee) carries inherent risk of cost overruns, requiring close oversight. 4. This contract supports a unique and vital capability for the Air Force, highlighting its strategic importance. 5. The duration of the contract (2037 days) points to a long-term need for sustainment and support. 6. The relatively low number of bids (2) might suggest a specialized market or limited contractor availability.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to the specialized nature of the E-11A BACN platform. However, the total value of $316 million over approximately six years indicates a substantial investment. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can lead to higher costs compared to fixed-price contracts if not managed diligently. Further analysis would require comparing specific labor rates and material costs against industry standards for similar complex aerospace sustainment contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. However, only two bids were received, which could indicate a highly specialized market with limited suppliers capable of meeting the technical requirements for maintaining the E-11A BACN platform. This level of competition, while present, might not have driven the most aggressive pricing.
Taxpayer Impact: While competition was present, the limited number of bidders may have constrained the potential for significant cost savings for taxpayers compared to a scenario with more robust competition.
Public Impact
Provides critical battlefield airborne communications, enhancing situational awareness and command and control for deployed forces. Supports Air Force operations by ensuring the readiness and functionality of the E-11A aircraft and its specialized payload. Indirectly benefits warfighters by enabling reliable data links and voice communications in contested environments. The contract sustains jobs within the aerospace and defense industry, particularly in areas related to aircraft maintenance and systems support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases the risk of cost escalation if not closely monitored.
- Limited competition (2 bidders) may have reduced the incentive for aggressive pricing.
- The specialized nature of the E-11A platform could lead to sole-source dependencies for certain parts or expertise.
- Long contract duration requires sustained oversight to ensure continued value and performance.
Positive Signals
- Awarded under full and open competition, allowing for a broad range of potential bidders.
- The contract supports a critical and unique military capability, ensuring operational readiness.
- Northrop Grumman has a significant track record in aerospace and defense systems integration.
Sector Analysis
The E-11A Battlefield Airborne Communications Node (BACN) platform is a highly specialized segment within the aerospace and defense sector, focusing on advanced communication systems for military applications. This contract falls under the broader category of aircraft maintenance and support services. The market for such niche capabilities is often characterized by a limited number of highly qualified contractors due to the technical expertise and security clearances required. Spending in this area is driven by the need for secure, reliable, and adaptable communication networks in complex operational environments.
Small Business Impact
There is no indication that this contract included specific small business set-asides. Given the specialized nature of the E-11A BACN platform and the prime contractor, Northrop Grumman, it is likely that any small business involvement would be through subcontracting opportunities. The extent of small business participation will depend on Northrop Grumman's subcontracting plan and the availability of small businesses capable of providing specialized services or components required for the maintenance and sustainment of this advanced system.
Oversight & Accountability
Oversight for this Cost Plus Fixed Fee contract would typically involve the Department of the Air Force contracting officer and their representatives, who are responsible for monitoring costs, performance, and compliance. The contract's duration and value necessitate robust oversight mechanisms to ensure adherence to the contract terms and prevent cost overruns. Transparency is generally maintained through contract reporting requirements, though specific details of performance metrics and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Airborne Communications Systems
- Military Aircraft Maintenance
- Command and Control Systems
- Aerospace Sustainment Services
- Department of Defense IT and Communications
Risk Flags
- Cost Overrun Risk (CPFF)
- Limited Competition
- Specialized Technology Sustainment
- Long-Term Contract Management
Tags
defense, air-force, northrop-grumman, communications-systems, aircraft-maintenance, full-and-open-competition, cost-plus-fixed-fee, specialized-technology, virginia, definitive-contract, air-transportation-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $315.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::CT::IGF BATTLEFIELD AIRBORNE COMMUNICATIONS NODE E-11A PLATFORM MAINTENANCE
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 $315.9 million.
What is the period of performance?
Start: 2017-09-24. End: 2023-04-23.
What is the specific role and importance of the E-11A BACN platform in military operations?
The E-11A, equipped with the Battlefield Airborne Communications Node (BACN) payload, serves as a crucial airborne gateway. It bridges communication gaps between different types of military assets, including ground forces, aircraft, and command centers, that might otherwise be unable to communicate due to incompatible systems or terrain limitations. BACN essentially creates a "Wi-Fi hotspot in the sky," enabling seamless data sharing, voice communication, and enhanced situational awareness across diverse platforms. Its importance lies in ensuring that warfighters have reliable and secure communication links, which is fundamental for effective command and control, intelligence gathering, and mission success in complex and dynamic operational environments.
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and value for this type of service?
The Cost Plus Fixed Fee (CPFF) contract type is often used for complex projects where the scope of work is not precisely defined or is subject to change, such as long-term sustainment of specialized systems like the E-11A BACN. Under CPFF, the contractor is reimbursed for allowable costs plus a fixed fee, representing their profit. This structure provides flexibility for the government to adapt to evolving requirements. However, it shifts cost risk towards the government, as the final cost can exceed initial estimates if costs escalate. Compared to fixed-price contracts, CPFF offers less price certainty but can be more appropriate for R&D or highly technical services where cost estimation is difficult. For sustainment, a well-defined fixed-price contract might offer better cost control, but CPFF allows for necessary adjustments in maintaining a unique platform.
What are the potential risks associated with Northrop Grumman's track record on similar large defense contracts?
Northrop Grumman is a major defense contractor with extensive experience, which generally implies a strong understanding of complex systems and program management. However, like any large contractor, they have faced scrutiny on various programs regarding cost performance and schedule adherence. For this specific contract, potential risks related to their track record could include challenges in managing the complexities of the E-11A BACN system over its lifecycle, potential for cost overruns inherent in CPFF contracts, and ensuring timely delivery of maintenance and support services. A thorough review of their past performance on similar sustainment contracts, particularly those involving advanced communication platforms, would be necessary to fully assess these risks and identify any recurring issues.
Given the $316M value, what is the estimated annual spending on this contract, and how does it compare to other Air Force communication sustainment programs?
The total contract value is approximately $316 million over a period of roughly 2037 days (approximately 5.6 years). This averages out to an estimated annual spending of roughly $56 million per year ($316M / 5.6 years). Comparing this to other Air Force communication sustainment programs requires access to detailed spending data across various platforms. However, $56 million annually for the sustainment of a critical, specialized airborne communication system like the E-11A BACN is likely within the expected range for such high-value, technologically advanced assets. Programs supporting larger fleets or more common communication systems might have higher total annual expenditures, but the per-unit or per-platform cost for specialized systems can be substantial.
What are the implications of only two bids being received for this 'full and open' competition?
Receiving only two bids in a 'full and open' competition for a contract valued at $316 million suggests that the market for providing maintenance and support for the E-11A BACN platform is highly specialized and potentially concentrated. This could be due to the unique technology involved, stringent security requirements, or the need for specific certifications and expertise that only a few companies possess. While 'full and open' competition is the preferred method, a low number of bidders can limit price discovery and potentially lead to higher costs for the government than if there were more competitors vying for the contract. It also raises questions about market barriers and whether potential bidders were discouraged from participating for reasons other than capability.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2340 DULLES CORNER BLVD, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $330,897,032
Exercised Options: $330,897,032
Current Obligation: $315,935,949
Actual Outlays: $10,461,731
Subaward Activity
Number of Subawards: 1661
Total Subaward Amount: $679,005,626
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-09-24
Current End Date: 2023-04-23
Potential End Date: 2023-04-23 00:00:00
Last Modified: 2025-08-08
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