DoD spent $35.8M on 10 Litening pods from Northrop Grumman, a sole-source award

Contract Overview

Contract Amount: $35,828,164 ($35.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-12-17

End Date: 2012-12-12

Contract Duration: 1,822 days

Daily Burn Rate: $19.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF TEN (10)LITENING AT BLOCK 2 PODS WITH ASSOCIATED HARDWARE AND SERVICES.

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $35.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PROCUREMENT OF TEN (10)LITENING AT BLOCK 2 PODS WITH ASSOCIATED HARDWARE AND SERVICES. Key points: 1. The contract value of $35.8 million for 10 pods suggests a unit price of approximately $3.6 million. 2. This sole-source award indicates a lack of competitive bidding, potentially impacting price efficiency. 3. The contract duration of 5 years (2007-2012) aligns with typical defense procurement cycles for specialized equipment. 4. The award to Northrop Grumman, a major defense contractor, positions this procurement within established industry relationships. 5. The 'Other Aircraft Parts' NAICS code suggests this falls under a broader category of aerospace manufacturing support. 6. The absence of small business set-aside flags this as a large prime contractor award.

Value Assessment

Rating: fair

The reported cost of $35.8 million for 10 Litening pods equates to roughly $3.6 million per unit. Benchmarking this against publicly available data for similar advanced targeting pod systems is challenging due to proprietary pricing and varying configurations. However, advanced pods can range from $1 million to over $4 million, placing this contract at the higher end, especially considering it was not competitively bid. Without more detailed specifications or competitive bids, a definitive value-for-money assessment is difficult, but the lack of competition raises concerns about optimal pricing.

Cost Per Unit: Approximately $3.6 million per pod. Market rates for advanced targeting pods can vary significantly, but this figure appears to be at the higher end of the spectrum for non-competitively procured systems.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a unique capability is required, or when only one source can fulfill the requirement. The lack of competition means there was no opportunity for price discovery through bidding, and potential cost savings that might arise from a competitive environment were likely forgone. This raises questions about whether the government received the best possible price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Sole-source awards can lead to higher costs compared to competitively procured items, as the vendor faces less incentive to offer the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other Department of Defense branches requiring advanced targeting capabilities for their aircraft. The services delivered include the procurement of 10 Litening AT Block 2 pods, essential for precision-guided munitions delivery. The geographic impact is primarily within military operational theaters where these aircraft are deployed. Workforce implications are likely concentrated within Northrop Grumman's aerospace manufacturing and support divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases cost to taxpayers.
High unit cost per pod warrants further investigation into cost drivers and justification.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
Contract duration and value suggest a significant investment without competitive validation.

Positive Signals

Procurement of advanced targeting pods enhances military operational effectiveness and precision strike capabilities.
Award to a major defense contractor like Northrop Grumman suggests access to proven technology and established support.
Firm Fixed Price contract type provides cost certainty for the government once negotiated.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, complex supply chains, and significant government procurement. Northrop Grumman is a major player in this industry, particularly in defense electronics and aerospace systems. The Litening AT pod is a widely used system, and its procurement fits within the broader market for airborne targeting and reconnaissance systems. Comparable spending benchmarks are difficult to establish precisely due to proprietary information and system variations, but the overall defense electronics market is substantial, with billions spent annually on similar advanced technologies.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb: false'. The prime contractor, Northrop Grumman, is a large defense corporation. While large prime contracts often have subcontracting plans that include small businesses, the direct award itself did not prioritize small business participation. The impact on the small business ecosystem would depend on whether Northrop Grumman subsequently subcontracted portions of this work to qualified small businesses.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. As a Department of Defense contract, it would also be subject to oversight by the Department of Defense Inspector General (DoD IG) for potential fraud, waste, and abuse. Transparency is limited by the sole-source nature of the award; however, contract awards are generally reported in federal procurement databases. Accountability measures would involve performance monitoring against contract requirements and adherence to the firm fixed price terms.

Related Government Programs

Advanced Targeting Pods
Airborne Electronic Systems
Defense Procurement
Northrop Grumman Contracts
U.S. Navy Aviation
Precision Strike Capabilities

Risk Flags

Sole-source award
High unit cost
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. PROCUREMENT OF TEN (10)LITENING AT BLOCK 2 PODS WITH ASSOCIATED HARDWARE AND SERVICES.

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 $35.8 million.

What is the period of performance?

Start: 2007-12-17. End: 2012-12-12.

What is the specific justification for awarding this contract on a sole-source basis to Northrop Grumman?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as when only one responsible source is available, or when there is a compelling urgency that precludes full and open competition. For advanced systems like targeting pods, justifications often cite unique technical capabilities, proprietary technology, or the need for commonality with existing fielded systems. Without access to the official justification document (e.g., a Justification and Approval - J&A), it is impossible to definitively state why full and open competition was not pursued for these 10 Litening AT Block 2 pods.

How does the unit cost of $3.6 million compare to other advanced targeting pods procured by the DoD around the same period?

The unit cost of approximately $3.6 million for the Litening AT Block 2 pod falls within the higher range for advanced targeting pods procured by the DoD during the mid-to-late 2000s. While precise comparisons are difficult due to variations in pod capabilities (e.g., Block versions, sensor suites, software features), resolution, and specific contract terms (like support services included), other comparable systems like the Sniper Advanced Targeting Pod (ATP) also represented significant investments. Publicly available data suggests that advanced pods could range from $1 million to over $4 million per unit. The non-competitive nature of this award makes it harder to ascertain if this price was truly representative of market value or if it reflects a premium due to the lack of competition.

What are the key performance characteristics and capabilities of the Litening AT Block 2 pod?

The Litening AT (All-Weather Targeting) Block 2 pod is an advanced airborne targeting pod designed to provide aircrews with high-resolution imagery for target detection, identification, tracking, and laser designation. Key capabilities typically include multi-sensor integration (e.g., infrared, TV cameras), advanced image processing for enhanced clarity in various weather conditions, and the ability to guide laser-guided munitions. Block 2 represents an incremental upgrade over earlier versions, likely incorporating improved sensors, software, or processing power to enhance performance, range, or target discrimination. These pods are crucial for enabling precision strikes and improving situational awareness for fighter and attack aircraft.

What is Northrop Grumman's track record with providing targeting pods to the U.S. military?

Northrop Grumman has a long and established track record of providing targeting and reconnaissance pods to the U.S. military and allied nations. The Litening family of pods, including the AT Block 2, has been a cornerstone of their offering in this domain. They have consistently upgraded these systems over decades to maintain technological relevance and meet evolving combat requirements. Their experience spans numerous platforms and operational deployments, making them a primary incumbent and a significant player in the market for airborne electro-optical/infrared (EO/IR) targeting systems. This extensive history suggests a deep understanding of military needs and a robust capability for development, production, and sustainment.

What was the total federal spending on Litening pods or similar targeting systems during the contract period (2007-2012)?

Determining the exact total federal spending on Litening pods or similar targeting systems specifically between 2007 and 2012 is complex without access to comprehensive procurement databases filtered by specific systems and timeframes. However, this period represented a significant investment in advanced military technologies, including targeting pods, driven by ongoing conflicts and modernization efforts. The U.S. military, particularly the Air Force, Navy, and Marine Corps, operated numerous aircraft platforms that utilized such pods. Annual defense budgets during these years were in the hundreds of billions of dollars, with a substantial portion allocated to aircraft modernization, weapons systems, and associated support equipment. Spending on individual pod programs like Litening could easily reach tens to hundreds of millions of dollars annually, depending on the number of units procured and upgrade cycles.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: 600 HICKS RD, ROLLING MEADOWS, IL, 90

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

Financial Breakdown

Contract Ceiling: $36,094,986

Exercised Options: $35,828,164

Current Obligation: $35,828,164

Contract Characteristics

Cost or Pricing Data: YES

Timeline