DoD's JSTARS Recap Program awarded $66M to Northrop Grumman for radar risk reduction

Contract Overview

Contract Amount: $66,049,387 ($66.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2016-03-24

End Date: 2019-11-27

Contract Duration: 1,343 days

Daily Burn Rate: $49.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JSTARS RECAP PROGRAM - RADAR RISK REDUCTION EFFORT

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $66.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JSTARS RECAP PROGRAM - RADAR RISK REDUCTION EFFORT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits competitive pressure, potentially impacting price efficiency. 3. Contract duration of over three years suggests a significant, long-term project. 4. Focus on radar risk reduction highlights a critical, albeit specialized, defense capability. 5. The program falls under the Defense Contract Management Agency's purview. 6. Northrop Grumman's extensive experience in aerospace and defense likely influenced the award.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a sole-source award, raises concerns about value for money. Without competitive bidding, it is difficult to benchmark the pricing against market rates or alternative solutions. The fixed fee component provides some cost control, but the overall cost is subject to the actual costs incurred by the contractor. Further analysis would be needed to compare the cost of this risk reduction effort to similar R&D initiatives within the DoD or other agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was considered. This typically occurs when a specific capability or technology is unique to a single provider, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to a higher price than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government did not benefit from the cost-saving mechanisms that typically arise from a competitive procurement process.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units relying on advanced radar systems for intelligence, surveillance, and reconnaissance. The contract delivers critical risk reduction for the JSTARS Recap Program, aiming to ensure the future effectiveness of airborne surveillance capabilities. The geographic impact is primarily within the defense sector, supporting national security objectives. Workforce implications include specialized engineering, technical, and program management roles within Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Cost-plus-fixed-fee contract structure can lead to cost overruns if not managed tightly.
Lack of transparency in pricing due to non-competitive nature.
Potential for contractor lock-in given the specialized nature of the technology.

Positive Signals

Addresses critical defense capability (radar risk reduction).
Awarded to a major defense contractor with proven capabilities.
Contract duration allows for thorough risk mitigation and development.
Fixed fee provides some level of cost predictability.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on advanced sensor technology and system integration. The market for such specialized defense systems is characterized by high barriers to entry, significant R&D investment, and a limited number of prime contractors capable of delivering complex solutions. Comparable spending benchmarks would likely involve other major defense acquisition programs focused on ISR (Intelligence, Surveillance, and Reconnaissance) platforms and their associated sensor suites.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely limited unless Northrop Grumman voluntarily engages them for specific components or services. The broader ecosystem impact would depend on whether small businesses are integrated into Northrop Grumman's supply chain for this program.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract's terms, including reporting requirements and the fixed-fee structure. Transparency may be limited due to the sole-source nature, but contract modifications and performance reviews would be subject to internal DoD oversight and potentially congressional inquiries.

Related Government Programs

JSTARS Program
ISR Platforms
Advanced Radar Systems
Defense Acquisition Programs
Northrop Grumman Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Limited price competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JSTARS RECAP PROGRAM - RADAR RISK REDUCTION EFFORT

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 $66.0 million.

What is the period of performance?

Start: 2016-03-24. End: 2019-11-27.

What is the track record of Northrop Grumman Systems Corporation with similar sole-source, cost-plus-fixed-fee defense contracts?

Northrop Grumman Systems Corporation has a long history of executing complex defense contracts, including those awarded on a sole-source and cost-plus-fixed-fee (CPFF) basis. Their extensive experience spans various defense platforms, including aircraft, satellites, and advanced sensor systems. While CPFF contracts offer flexibility for R&D and uncertain scope projects, they also carry inherent risks of cost escalation if not rigorously managed. Northrop Grumman's track record suggests they possess the technical and program management capabilities to handle such contracts, but historical performance data across similar sole-source CPFF awards would be necessary to fully assess their efficiency and cost control effectiveness in comparable situations. Government oversight and robust auditing are crucial for mitigating risks associated with these contract types.

How does the $66 million award compare to other radar risk reduction efforts within the DoD?

Benchmarking the $66 million award for the JSTARS Recap Program's radar risk reduction against other DoD efforts is challenging without more specific data on the scope and technical complexity of those comparable programs. However, $66 million represents a significant investment for a risk reduction phase, suggesting a complex technological challenge or a broad scope of work. Typically, risk reduction efforts precede full-scale development and production, and their costs can vary widely based on the maturity of the technology, the number of risks being addressed, and the duration of the effort. Larger, more established programs might see higher total spending, but for a specific risk reduction initiative, this figure indicates a substantial commitment by the DoD to mitigate potential issues before committing to a full program.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract structure for the JSTARS Recap Program?

The primary risks associated with this sole-source, cost-plus-fixed-fee (CPFF) contract structure for the JSTARS Recap Program are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to higher costs for the government as there is no incentive for the contractor to offer the most competitive price. This reduces the government's leverage in price negotiations. Secondly, the CPFF structure, while providing flexibility for research and development where costs can be uncertain, carries a risk of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee, meaning that if costs escalate beyond initial estimates, the government bears the burden, potentially increasing the total contract value beyond the initial $66 million projection. Effective oversight and stringent cost controls are essential to mitigate these risks.

What is the expected impact of this contract on the future capabilities of the JSTARS program?

This contract is crucial for the future capabilities of the JSTARS program as it directly addresses 'Radar Risk Reduction.' This implies that the current JSTARS radar systems may be facing obsolescence, performance limitations, or technological challenges that need to be overcome for future operational effectiveness. By investing in risk reduction, the DoD aims to identify and mitigate potential technical hurdles, explore new technologies, and refine designs before committing to a full recapitalization or upgrade. Successful execution of this contract should pave the way for a more capable, reliable, and potentially modernized JSTARS platform, ensuring its continued relevance in intelligence, surveillance, and reconnaissance missions.

How has historical spending on JSTARS-related programs evolved, and does this $66M award align with past trends?

Historical spending on JSTARS-related programs has been substantial, reflecting the program's long operational history and its critical role in airborne ISR. The original JSTARS fleet (E-8C) involved significant acquisition and sustainment costs over decades. The 'Recap' program signifies a planned modernization or replacement effort, indicating a shift in spending focus from sustainment to development and acquisition of new capabilities. This $66 million award for radar risk reduction is likely a precursor to larger investments in the recapitalization phase. While it represents a significant sum for a specific risk reduction effort, it should be viewed within the context of the overall lifecycle costs of a major defense platform modernization, which can run into billions of dollars over many years. Therefore, this award aligns with the trend of ongoing investment in the JSTARS capability, albeit at an earlier, risk-focused stage.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: 1580B W NURSERY RD MS B585, LINTHICUM HEIGHTS, MD, 21090

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: $66,069,809

Exercised Options: $66,069,809

Current Obligation: $66,049,387

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline