DoD Awards Northrop Grumman $94.9M for LINK 16 UH-1Y/AH-1Z B Kits
Contract Overview
Contract Amount: $94,923,218 ($94.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2021-09-21
End Date: 2025-10-31
Contract Duration: 1,501 days
Daily Burn Rate: $63.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: LINK 16 UH-1Y/AH-1Z B KIT
Place of Performance
Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367
Plain-Language Summary
Department of Defense obligated $94.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LINK 16 UH-1Y/AH-1Z B KIT Key points: 1. Contract awarded to a single, large defense contractor. 2. Focus on specialized communication equipment for military aircraft. 3. Potential for cost overruns due to fixed-price incentive structure. 4. Sector is dominated by a few large players, limiting competition.
Value Assessment
Rating: fair
The contract value of $94.9M for 1501 days appears reasonable for specialized defense electronics. However, the fixed-price incentive structure introduces risk for cost overruns.
Cost Per Unit: $63,240
Competition Analysis
Competition Level: sole-source
This contract was sole-sourced, indicating a lack of competition. This approach may lead to higher prices than if multiple vendors were considered, as there is no market pressure to reduce costs.
Taxpayer Impact: Taxpayer funds are used for this procurement. The lack of competition raises concerns about whether the best possible price was achieved.
Public Impact
Ensures continued operational capability for critical military aircraft. Supports the U.S. Navy's advanced communication systems. Impacts readiness and interoperability of aviation assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery.
- Fixed-price incentive contract carries cost overrun risk.
- Limited visibility into specific performance metrics.
Positive Signals
- Supports critical defense aviation platforms.
- Long-term contract provides stable supply.
- Awarded to a known, experienced defense contractor.
Sector Analysis
This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector, specifically for defense applications. Spending in this niche is often characterized by high R&D costs and long product lifecycles, with significant government contracts awarded to established prime contractors.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The Department of the Navy is the awarding agency. Oversight will be crucial to monitor performance and costs, especially given the sole-source nature and incentive-based pricing.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source procurement
- Potential for cost overruns
- Lack of competitive pricing pressure
- Reliance on a single large contractor
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $94.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LINK 16 UH-1Y/AH-1Z B KIT
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 $94.9 million.
What is the period of performance?
Start: 2021-09-21. End: 2025-10-31.
What is the justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique technical requirements, proprietary technology, or the inability of other sources to meet the specific needs within the required timeframe. Without further documentation, it's difficult to ascertain if alternatives were thoroughly explored or if specific national security concerns necessitated this approach.
How will the fixed-price incentive structure be managed to mitigate cost overruns?
Effective management of a fixed-price incentive contract requires robust oversight, clear performance metrics, and regular communication between the government and contractor. The government must closely monitor costs and progress, ensuring that the contractor is incentivized to meet targets without compromising quality or scope. Establishing realistic target costs and sharing formulas is crucial.
What is the long-term strategic value of these LINK 16 kits beyond immediate operational needs?
LINK 16 kits are integral to modern military communication, enabling secure, jam-resistant data links for command and control, situational awareness, and targeting. Their long-term value lies in maintaining interoperability across different platforms and services, supporting joint operations, and providing a foundation for future upgrades to networked warfare capabilities.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001921R0005
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 91367
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: $94,923,218
Exercised Options: $94,923,218
Current Obligation: $94,923,218
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $2,915,917
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-09-21
Current End Date: 2025-10-31
Potential End Date: 2025-10-31 00:00:00
Last Modified: 2025-09-22
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