DoD Awards Northrop Grumman $1.4B for Block 3 EA Subsystem Production, Ending 2028
Contract Overview
Contract Amount: $1,408,905,015 ($1.4B)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2020-09-30
End Date: 2028-09-30
Contract Duration: 2,922 days
Daily Burn Rate: $482.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: BLOCK 3 EA SUBSYSTEM HEMISPHERE PRODUCTION
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $1.41 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: BLOCK 3 EA SUBSYSTEM HEMISPHERE PRODUCTION Key points: 1. Significant contract value for a critical defense subsystem. 2. Northrop Grumman is a major defense contractor, indicating established capabilities. 3. Potential risks include program execution and cost overruns over the long duration. 4. Spending falls within the IT and Defense sectors, requiring specialized manufacturing.
Value Assessment
Rating: good
The contract value of $1.4 billion over nearly 8 years suggests a substantial investment. Benchmarking against similar complex defense subsystem contracts is difficult without more granular data, but the fixed-price incentive structure aims to control costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.
Taxpayer Impact: The competitive award aims to ensure taxpayer funds are used efficiently for this critical defense capability.
Public Impact
Enhances naval aviation capabilities with advanced electronic warfare systems. Supports national security by providing state-of-the-art defense technology. Creates and sustains high-tech jobs within the defense industrial base. Contributes to the technological superiority of U.S. naval forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration increases risk of scope creep and cost escalation.
- Reliance on a single prime contractor for a critical subsystem.
- Potential for schedule delays in complex manufacturing processes.
Positive Signals
- Awarded through full and open competition.
- Fixed-price incentive contract type encourages cost control.
- Northrop Grumman's established expertise in defense systems.
Sector Analysis
This contract falls within the defense electronics manufacturing sector, specifically for advanced electronic warfare (EA) subsystems. Spending benchmarks for such specialized systems are highly variable, but $1.4 billion over nearly 8 years represents a significant, long-term investment in critical military technology.
Small Business Impact
While the prime contractor is Northrop Grumman, a large defense corporation, the contract likely involves significant subcontracting opportunities for small and medium-sized businesses within the defense supply chain. Specific small business participation goals would be detailed in the contract.
Oversight & Accountability
The Department of the Navy is responsible for oversight of this contract. The fixed-price incentive structure and the long duration necessitate robust program management and regular performance reviews to ensure accountability and taxpayer value.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Long-term contract duration (nearly 8 years).
- Complex, high-technology defense system.
- Potential for schedule slippage.
- Reliance on a single large prime contractor.
Tags
search-detection-navigation-guidance-aer, department-of-defense, md, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.41 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION. BLOCK 3 EA SUBSYSTEM HEMISPHERE PRODUCTION
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 $1.41 billion.
What is the period of performance?
Start: 2020-09-30. End: 2028-09-30.
What is the specific performance metric tied to the incentive portion of the contract, and how does it align with desired operational outcomes for the EA subsystem?
The incentive structure likely ties additional profit to meeting or exceeding specific performance targets, such as enhanced detection range, reduced false alarm rates, or improved jamming resistance. The alignment with operational outcomes is crucial; for example, improved EW capabilities directly translate to enhanced survivability and mission success for naval aircraft operating in contested environments.
What are the primary technical risks associated with the Block 3 EA Subsystem production, and what mitigation strategies are in place?
Key technical risks often include integration challenges with existing aircraft systems, achieving desired performance specifications with new technologies, and ensuring reliability and maintainability over the system's lifecycle. Mitigation strategies typically involve rigorous testing and evaluation phases, phased production schedules, close collaboration between the prime contractor and government engineers, and contingency planning for potential design modifications.
How does the cost per unit for this EA subsystem compare to previous generations or similar systems procured by other military branches?
Direct cost-per-unit comparison is challenging without specific data on the number of units procured and the exact configuration. However, the fixed-price incentive contract aims to control costs by rewarding efficiency. If the unit cost significantly deviates from historical trends or comparable systems, it could indicate technological advancements driving up price, production inefficiencies, or a need for further negotiation.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002419R5519
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580B 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: $1,857,511,358
Exercised Options: $1,408,905,015
Current Obligation: $1,408,905,015
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $1,708,558
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-09-30
Current End Date: 2028-09-30
Potential End Date: 2028-09-30 00:00:00
Last Modified: 2025-12-19
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