DoD's $22.3M contract for optical instruments awarded to Litton Systems Inc. with no competition

Contract Overview

Contract Amount: $22,368,316 ($22.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2003-03-13

End Date: 2013-08-12

Contract Duration: 3,805 days

Daily Burn Rate: $5.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200311!000855!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785403C6004 !A!N! !N!P00001 !20030313!20040130!139301295!139301295!016435559!N!LITTON SYSTEMS INC !2787S ORANGE BLOSSOM TRL !APOPKA !FL!32703!01700!095!12!APOPKA !ORANGE !FLORIDA !+000000060995!N!N!000000000000!AZ11!RDTE/OTHER RESEARCH & DEVELOPMENT-BASIC RESEARCH !A5 !WEAPONS !2000!NOT DISCERNABLE OR CLASSIFIED !333314!E! !3! ! !C! ! !99990909!B! ! !N!A!D!N!J!1!001!N!2A!Z!N!C! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: APOPKA, ORANGE County, FLORIDA, 32703, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200311!000855!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785403C6004 !A!N! !N!P00001 !20030313!20040130!139301295!139301295!016435559!N!LITTON SYSTEMS INC !2787S ORANGE BLOSSOM TRL !APOPKA !FL!32703!01700!095!12!APOPKA !ORANGE !FLORIDA !+000000060995!N!N!000000000000!AZ11!RDTE/O… Key points: 1. The contract value of $22.3 million represents a significant investment in specialized optical equipment. 2. The absence of competition raises questions about potential overpricing and lack of market-driven cost efficiencies. 3. The contract duration of over 10 years suggests a long-term need for these optical instruments. 4. The award to a single vendor, Litton Systems Inc., limits opportunities for broader industry engagement and innovation. 5. The 'RDTE/OTHER RESEARCH & DEVELOPMENT-BASIC RESEARCH' classification indicates a focus on foundational scientific advancement. 6. The contract's geographic impact is localized to Florida, where Litton Systems Inc. is based.

Value Assessment

Rating: questionable

The contract's value of $22.3 million for optical instruments over a 10-year period warrants scrutiny, especially given the lack of competitive bidding. Without comparable contract data or market benchmarks, it is difficult to definitively assess value for money. However, the absence of competition often leads to higher prices than would be achieved in a more open market. The fixed-price nature of the contract shifts some risk to the contractor, but the overall cost-effectiveness remains uncertain.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no formal competition. This approach is typically used when only one vendor possesses the necessary specialized capabilities or when urgency dictates a rapid award. The lack of bidders means that the government did not benefit from price discovery through a competitive process, potentially leading to a higher price than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium for these optical instruments due to the absence of competitive pressure to lower prices. The government missed an opportunity to leverage market forces to secure the best possible value.

Public Impact

The primary beneficiaries are likely the U.S. Marine Corps, which will receive advanced optical instruments for its operations. The contract supports research and development in the field of optical instruments, potentially leading to technological advancements. The contract's impact is concentrated in Apopka, Florida, supporting local employment and economic activity at Litton Systems Inc. The contract contributes to the U.S. military's technological superiority by providing specialized equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated costs for taxpayers.
Sole-source award limits opportunities for innovation from other potential vendors.
Long contract duration could lead to complacency or reduced urgency in delivery.
No clear indication of performance metrics or penalties for non-performance.

Positive Signals

Contract awarded to a known entity, Litton Systems Inc., suggesting established capabilities.
Firm Fixed Price contract structure shifts some financial risk to the contractor.
Contract supports critical research and development for defense applications.
Long-term nature of the contract provides stability for both the government and the contractor.

Sector Analysis

This contract falls within the 'Optical Instrument and Lens Manufacturing' sector, a specialized niche within the broader manufacturing industry. The defense sector often requires highly specialized optical equipment for surveillance, targeting, and navigation systems. Spending in this area is driven by technological advancements and the need for superior performance in demanding environments. Comparable spending benchmarks are difficult to ascertain without more specific details on the type of optical instruments procured, but R&D contracts in defense can range widely in value.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The sole-source nature of the award to Litton Systems Inc. suggests that small businesses were not actively solicited or considered as primary contractors for this specific requirement. This limits the direct economic benefit to the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Given the R&D nature, specific technical oversight would also be crucial. Transparency is limited due to the sole-source award and the classification of 'NOT DISCERNABLE OR CLASSIFIED' for some details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Research and Development
Naval Systems Procurement
Optical and Electro-Optical Systems
Advanced Technology Development

Risk Flags

Sole-source award lacks competitive justification.
Potential for cost overruns due to lack of competition.
Long contract duration may not align with evolving technological needs.
Limited transparency regarding specific deliverables and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200311!000855!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785403C6004 !A!N! !N!P00001 !20030313!20040130!139301295!139301295!016435559!N!LITTON SYSTEMS INC !2787S ORANGE BLOSSOM TRL !APOPKA !FL!32703!01700!095!12!APOPKA !ORANGE !FLORIDA !+000000060995!N!N!000000000000!AZ11!RDTE/OTHER RESEARCH & DEVELOPMENT-BASIC RESEARCH !A5 !WEAPONS !2000!NOT DISCERNABLE OR CLASSIFIED !333314!E! !3! ! !C! ! !99990909!B! ! !N!A!D!N!J!1!001!N!2A!Z!N!C! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

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 Navy).

What is the total obligated amount?

The obligated amount is $22.4 million.

What is the period of performance?

Start: 2003-03-13. End: 2013-08-12.

What specific types of optical instruments were procured under this contract, and what are their intended applications?

The provided data indicates the contract is for 'RDTE/OTHER RESEARCH & DEVELOPMENT-BASIC RESEARCH' related to 'WEAPONS' and falls under 'Optical Instrument and Lens Manufacturing.' However, the specific types of optical instruments are not detailed and are likely classified or considered proprietary. These could range from advanced targeting systems, surveillance optics, or components for directed energy weapons. The 'basic research' designation suggests the contract may focus on foundational technologies rather than immediately deployable systems, aiming to explore new scientific principles or capabilities in optics for future defense applications.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The data explicitly states the contract was 'NOT COMPETED.' Sole-source awards are typically justified when only one responsible source is available or capable of meeting the requirement. This could be due to unique proprietary technology, specialized expertise held exclusively by Litton Systems Inc., or urgent and compelling circumstances where competition is not feasible. Without further documentation, the precise justification remains unclear, but it implies that the Department of the Navy determined that no other vendor could fulfill the need effectively or in the required timeframe.

How does the contract's value of approximately $22.3 million compare to similar R&D contracts for optical instruments in the defense sector?

Direct comparison is challenging without knowing the exact nature of the optical instruments and the scope of the R&D. However, $22.3 million over a 10-year period (from March 2003 to August 2013) averages around $2.23 million per year. This figure is moderate for defense R&D, which can range from a few million for early-stage research to hundreds of millions for advanced system development. Given the 'basic research' classification, this amount might be considered substantial for foundational work, but it is not exceptionally large in the context of major defense procurement programs.

What is the track record of Litton Systems Inc. in fulfilling defense contracts, particularly those involving optical technology?

Litton Systems Inc. was a significant defense contractor, known for various systems including shipbuilding, electronics, and aerospace components. While the data identifies Litton Systems Inc. as the awardee, it's important to note that Litton Industries was acquired by Northrop Grumman in 2001. Therefore, this contract, awarded in 2003, likely represents a division or subsidiary operating under the Northrop Grumman umbrella at that time, or potentially a legacy entity. Their historical involvement in optical technology would have been substantial, given the breadth of their defense portfolio.

What are the potential risks associated with a sole-source R&D contract of this magnitude and duration?

The primary risk is the lack of competitive pressure, which can lead to higher costs and potentially less innovation than a competed contract. For R&D, there's also the risk that the research may not yield the desired outcomes, despite the investment. A long duration (over 10 years) increases the risk of technological obsolescence or shifts in strategic priorities rendering the research less relevant. Furthermore, sole-source awards can create a perception of favoritism or missed opportunities for other capable firms, potentially impacting the broader defense industrial base.

How does this contract fit into the broader spending patterns for research and development within the Department of Defense or the Navy?

This contract represents a small fraction of the overall DoD R&D budget, which typically runs into the tens of billions of dollars annually. Within the Navy's R&D portfolio, contracts for specialized technologies like advanced optics are common. The 'basic research' classification suggests it aligns with foundational science efforts aimed at future capabilities, rather than immediate acquisition programs. Its value is consistent with many individual R&D projects that explore new technological frontiers before scaling up for development and production.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 2787S ORANGE BLOSSOM TRL, APOPKA, FL, 32703

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline