DoD's $36.8M Long Range Radar Retrofit Kits contract awarded to Northrop Grumman raises value questions

Contract Overview

Contract Amount: $36,884,171 ($36.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-20

End Date: 2027-02-25

Contract Duration: 1,528 days

Daily Burn Rate: $24.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LONG RANGE RADAR RETROFIT KITS

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LONG RANGE RADAR RETROFIT KITS Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's duration of over 4 years suggests a long-term need for these critical radar components. 3. The absence of competition is a significant risk indicator for achieving optimal value for taxpayer funds. 4. This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 5. The firm-fixed-price contract type offers some cost certainty but doesn't mitigate the lack of competition. 6. The sole-source award warrants scrutiny regarding the justification for not pursuing competitive bidding.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without comparable bids. The firm-fixed-price structure provides some cost control, but the lack of competition means there's no market-driven validation of the pricing. Without competitive proposals, it's difficult to ascertain if Northrop Grumman's pricing reflects fair market value or if taxpayers are overpaying. Further analysis would require access to internal cost data or historical pricing for similar retrofits.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corporation, was solicited. The justification for this approach is not provided in the data. A sole-source award bypasses the competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The lack of competition here means the government did not benefit from multiple vendors vying for the contract.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. This could result in higher overall spending for these radar retrofit kits compared to a competed contract.

Public Impact

The Department of the Navy benefits from the modernization of its long-range radar systems, enhancing operational capabilities. These retrofit kits are crucial for maintaining and improving the performance of existing radar platforms. The contract supports advanced manufacturing and engineering roles within Northrop Grumman, primarily in Maryland. Improved radar systems contribute to national security by enhancing surveillance and threat detection capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value for taxpayer money.
Sole-source awards can stifle innovation by not encouraging new entrants or alternative solutions.
Limited transparency into the justification for sole-source procurement hinders public accountability.
The long contract duration without competitive re-evaluation could lead to complacency in cost management.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, assuming the price is fair.
Northrop Grumman is a known entity in defense contracting, suggesting a degree of reliability in delivery.
The contract addresses a specific, critical need for radar system modernization, supporting defense readiness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on electronic systems and components. The NAICS code 334511 covers the manufacturing of instruments for measuring, displaying, and controlling industrial process variables. Within the broader defense market, radar systems are critical for surveillance, navigation, and targeting. Spending in this sub-sector is often characterized by long development cycles, high R&D costs, and a limited number of specialized contractors, making sole-source awards sometimes necessary but always requiring careful justification.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, there are no direct subcontracting implications for small businesses stemming from this particular award, nor is there an immediate positive impact on the small business ecosystem through this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations, likely involving the Naval Air Systems Command (NAVAIR) given the Department of the Navy as the awarding agency. Accountability measures are typically embedded in the contract terms, including performance metrics and delivery schedules. Transparency is limited due to the sole-source nature; however, contract award data is publicly available through systems like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Long Range Radar Systems
Defense Radar Modernization Programs
Northrop Grumman Defense Contracts
Naval Aviation Systems Procurement
Electronic Warfare Systems

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to absence of competition.
Limited transparency regarding procurement rationale.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LONG RANGE RADAR RETROFIT KITS

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 $36.9 million.

What is the period of performance?

Start: 2022-12-20. End: 2027-02-25.

What is Northrop Grumman's track record with similar long-range radar retrofit contracts for the Department of Defense?

Northrop Grumman Systems Corporation has a significant history of developing and supplying advanced radar systems and electronic warfare solutions to the Department of Defense. They are a major defense contractor with extensive experience in complex aerospace and defense systems. While specific data on 'long-range radar retrofit kits' for the Navy isn't detailed here, the company's portfolio includes a wide array of radar technologies, including airborne, ground-based, and naval systems. Their track record generally involves large, complex contracts, often awarded through competitive processes but also including sole-source arrangements for specialized or follow-on work. Evaluating their performance on past similar contracts would require examining delivery timelines, cost performance, and technical success rates on previous engagements to gauge their reliability and efficiency in executing such projects.

How does the $36.8 million contract value compare to similar radar retrofit efforts within the DoD?

Directly comparing the $36.8 million value of this specific 'Long Range Radar Retrofit Kits' contract is difficult without more granular data on the scope and technical specifications of the retrofits. Radar modernization projects can vary significantly in cost based on the complexity of the system, the extent of the upgrade, the platform it's being installed on, and the number of units being retrofitted. However, for context, major radar system procurements or significant overhauls can range from tens of millions to hundreds of millions of dollars. Given that this is for retrofit kits and awarded to a single contractor, the $36.8 million figure appears to be within a plausible range for a specialized upgrade. A true value comparison would necessitate benchmarking against other Navy or DoD radar retrofit contracts of similar technical scope and complexity, ideally those that were competitively procured to establish a market price baseline.

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

The primary risk associated with awarding this $36.8 million contract on a sole-source basis is the potential for suboptimal value for taxpayer money. Without competition, there is no market pressure to drive down prices, potentially leading to higher costs than if multiple vendors had bid. This lack of competition can also reduce the incentive for the sole-source provider to innovate or improve efficiency, as they face no direct threat from rivals. Furthermore, it raises concerns about the justification for not pursuing a competitive process, which could indicate a lack of available alternatives or a failure to adequately explore the market. This can also limit transparency and make it harder to hold the contractor accountable for performance and cost-effectiveness compared to a competitively bid scenario.

What is the expected impact of these radar retrofit kits on the operational effectiveness of the Navy's platforms?

The 'Long Range Radar Retrofit Kits' are expected to significantly enhance the operational effectiveness of the Navy's platforms by improving the capabilities of their existing radar systems. Modernizing long-range radar is critical for enhanced situational awareness, improved detection ranges, better tracking of targets, and potentially incorporating new functionalities like advanced electronic counter-countermeasures (ECCM) or improved signal processing. These upgrades are vital for maintaining a technological edge in contested environments, supporting missions ranging from air defense and anti-submarine warfare to maritime surveillance. Ultimately, these retrofits contribute to the Navy's ability to perform its missions more effectively and safely by providing more accurate and timely information.

How has federal spending on radar system manufacturing and maintenance evolved over the past five years?

Federal spending on radar system manufacturing and maintenance has generally remained robust, driven by ongoing modernization efforts across all branches of the military and evolving technological threats. While specific figures for 'radar system manufacturing and maintenance' can fluctuate based on major program starts and completions, the overall trend indicates sustained investment. The Department of Defense, in particular, consistently allocates significant funds to upgrade aging platforms and develop next-generation radar capabilities. Factors influencing this spending include geopolitical tensions, the need to counter advanced adversary capabilities, and the integration of new technologies like artificial intelligence and advanced materials into radar systems. This $36.8 million contract for retrofit kits aligns with this broader trend of investing in the sustainment and enhancement of critical radar infrastructure.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1580A W NURSERY RD, 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: $36,884,171

Exercised Options: $36,884,171

Current Obligation: $36,884,171

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785420G0032

IDV Type: BOA

Timeline