DoD's $22.5M Joint Tactical Ground Station contract awarded to Northrop Grumman without competition

Contract Overview

Contract Amount: $22,543,957 ($22.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-12-31

End Date: 2026-01-30

Contract Duration: 395 days

Daily Burn Rate: $57.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT TACTICAL GROUND STATION TASK ORDER 4

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80916

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $22.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JOINT TACTICAL GROUND STATION TASK ORDER 4 Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The firm-fixed-price contract structure aims to control costs, but the lack of competition limits benchmarking. 3. Performance period extends over 2 years, suggesting a need for ongoing support for critical systems. 4. Engineering services are the primary focus, indicating a reliance on specialized technical expertise. 5. The contract is a delivery order under a larger task order, implying it's part of a broader acquisition strategy. 6. Awarded by the Department of the Air Force, highlighting its role in supporting air and space operations.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the $22.5 million price represents a fair market value for the engineering services provided. While the firm-fixed-price structure offers some cost certainty, the absence of competition means taxpayers may not be benefiting from the most economical pricing achievable through a competitive process. Further analysis would require access to historical pricing for similar services or internal cost estimates.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition means there were no other bidders to compare against, potentially limiting the government's ability to secure the best possible price and terms. This raises concerns about whether the government explored all available options for competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage that competition provides to negotiate lower prices. It also limits opportunities for other businesses to compete for and win federal contracts.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Air Force, which will receive critical engineering services. The contract supports the Joint Tactical Ground Station (JTAGS) program, essential for processing and disseminating intelligence. Services delivered will likely ensure the continued operational readiness and effectiveness of key military intelligence systems. The geographic impact is national, supporting defense operations, though specific deployment locations for the JTAGS system are classified. Workforce implications include the utilization of specialized engineering talent, likely concentrated within Northrop Grumman's existing workforce.

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 non-competitive nature.
Potential for vendor lock-in if JTAGS requires highly specialized, proprietary knowledge.
Limited opportunities for small businesses to participate in this specific contract award.

Positive Signals

Award to an established contractor with a track record in defense systems.
Firm-fixed-price contract provides cost certainty for the government.
Delivery order structure suggests integration into a larger, ongoing program.
Contract duration ensures continued support for critical national security infrastructure.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and upgrades of complex military systems. Comparable spending benchmarks are difficult to establish precisely without knowing the specific nature of the JTAGS engineering tasks, but large-scale defense contracts for specialized engineering often run into tens or hundreds of millions of dollars. This contract represents a significant, albeit specific, investment in maintaining advanced defense capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Northrop Grumman Systems Corporation, is a large business. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan for this delivery order is not detailed here. The absence of a set-aside means direct opportunities for small businesses to bid on this specific contract are limited, though they may be involved as subcontractors.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. As a delivery order under a larger task order, it likely falls under existing oversight frameworks for that parent contract. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected. Accountability is managed through performance metrics and delivery schedules outlined in the contract.

Related Government Programs

Joint Tactical Ground Station (JTAGS) Program
Department of Defense Engineering Services
Air Force Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Northrop Grumman Defense Contracts
Sole-Source Defense Acquisitions

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JOINT TACTICAL GROUND STATION TASK ORDER 4

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 $22.5 million.

What is the period of performance?

Start: 2024-12-31. End: 2026-01-30.

What is the historical spending pattern for the Joint Tactical Ground Station (JTAGS) program, and how does this award compare?

Analyzing the historical spending for the JTAGS program is crucial for contextualizing this $22.5 million award. Without specific historical data readily available in this dataset, a comprehensive comparison is difficult. However, JTAGS is a critical intelligence system, and its sustainment and upgrade costs can be substantial over its lifecycle. If previous JTAGS-related engineering contracts were also sole-sourced or awarded to Northrop Grumman, it might indicate a consistent acquisition strategy. Conversely, if past contracts were competed, this sole-source award warrants closer scrutiny regarding justification and value. Understanding the trend of spending – whether increasing, decreasing, or stable – provides insight into the program's maturity and the government's long-term investment.

What specific engineering services are encompassed by this contract, and what is their criticality to JTAGS operations?

The contract specifies 'Engineering Services' (NAICS 541330) for the Joint Tactical Ground Station (JTAGS) Task Order 4. While the exact nature of these services is not detailed, they likely involve the design, development, integration, testing, modification, or sustainment of the JTAGS system. JTAGS is a vital component of the U.S. military's intelligence infrastructure, responsible for processing and disseminating time-sensitive intelligence data from various satellite platforms to tactical commanders. Therefore, the engineering services provided under this contract are critical for ensuring the system's operational readiness, reliability, and potentially its modernization to counter evolving threats or incorporate new intelligence sources. Any disruption or deficiency in these services could directly impact the military's situational awareness and decision-making capabilities.

What is Northrop Grumman's track record with the JTAGS program and similar sole-source defense contracts?

Northrop Grumman Systems Corporation has a significant track record in the defense sector, often serving as a prime contractor for complex military systems. Their involvement with the Joint Tactical Ground Station (JTAGS) program suggests they possess specialized knowledge and capabilities essential for its operation and sustainment. Regarding sole-source contracts, large defense contractors frequently receive such awards, particularly for follow-on work, unique system sustainment, or when specific expertise is required that only one entity possesses. While Northrop Grumman's history likely includes numerous sole-source awards, the justification for each is critical. A review of their past performance on JTAGS and similar sole-source contracts would reveal their ability to deliver required services effectively and at a reasonable cost, even in the absence of direct competition.

How does the $22.5 million value compare to industry benchmarks for similar engineering services, considering the sole-source nature?

Directly comparing the $22.5 million value to industry benchmarks is challenging due to the sole-source award and the specific nature of JTAGS engineering services. Standard industry benchmarks often rely on data from competitively procured contracts, which typically drive prices down. For sole-source contracts, especially those involving highly specialized or proprietary technology like JTAGS might entail, the 'market rate' is less defined. Northrop Grumman is a major defense contractor, and their pricing reflects significant overhead, R&D investment, and specialized labor costs. Without competitive bids, it's difficult to definitively state if this price is optimal. However, the government likely relies on internal cost analyses, historical pricing data for the specific system, and negotiation to ensure the price is 'fair and reasonable,' even if not the lowest possible.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

Awarding a $22.5 million contract on a sole-source basis carries several potential risks. Primarily, there is the risk of paying a higher price than would be achieved through competition, as the government lacks the leverage to negotiate aggressively against multiple bidders. This can lead to inefficient use of taxpayer funds. Another risk is reduced innovation; without competitive pressure, the contractor may have less incentive to find novel or more cost-effective solutions. There's also a risk of complacency or reduced service quality over time, as the contractor knows they are the only option. Furthermore, sole-source awards can stifle market competition, potentially hindering the growth of other capable firms and limiting future sourcing options for the government.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102

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: $59,681,202

Exercised Options: $23,259,016

Current Obligation: $22,543,957

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $698,895

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M22D0062

IDV Type: IDC

Timeline