DoD Awards $82.5M Sole-Source Contract for STARLITE Radar Systems to Northrop Grumman

Contract Overview

Contract Amount: $64,754,895 ($64.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2014-04-23

End Date: 2019-09-30

Contract Duration: 1,986 days

Daily Burn Rate: $32.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS IS A THREE (3) YEAR FFP DEFINITIVE CONTRACT WITH AN ESTIMATED VALUE OF $82.5 MILLION. THIS ACTION WILL PROVIDE UP TO 94 SMALL TACTICAL RADAR - LIGHTWEIGHT (STARLITE) SYNTHETIC APERTURE RADAR/GROUND MOVING TARGET INDICATOR (SAR/GMTI) SYSTEMS. THE CONTRACT WILL HAVE A BASE YEAR QUANTITY MAXIMUM OF 60 SYSTEMS, AND TWO OPTION YEARS FOR A MAXIMUM OF 50 AND 40 SYSTEMS, RESPECTIVELY. THIS IS A SOLE SOURCE CONTRACT.

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $64.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THIS IS A THREE (3) YEAR FFP DEFINITIVE CONTRACT WITH AN ESTIMATED VALUE OF $82.5 MILLION. THIS ACTION WILL PROVIDE UP TO 94 SMALL TACTICAL RADAR - LIGHTWEIGHT (STARLITE) SYNTHETIC APERTURE RADAR/GROUND MOVING TARGET INDICATOR (SAR/GMTI) SYSTEMS. THE CONTRACT WILL HAVE A BASE YEA… Key points: 1. The contract is for up to 94 STARLITE SAR/GMTI systems over three years. 2. This is a sole-source award, raising questions about competition and price discovery. 3. The estimated value of $82.5 million is significant for specialized radar systems. 4. The sector is focused on advanced defense technology and manufacturing.

Value Assessment

Rating: questionable

The $82.5 million estimated value for 94 systems suggests a per-unit cost of approximately $877,660. Without comparable contract data for similar advanced radar systems, it's difficult to definitively assess if this pricing is competitive.

Cost Per Unit: $877,660

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This limits the opportunity for price discovery and potentially leads to higher costs for taxpayers compared to a competitive procurement.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these specialized radar systems.

Public Impact

Enhanced battlefield situational awareness through advanced radar technology. Potential for increased defense capabilities for the U.S. Army. Reliance on a single supplier for critical defense equipment. Impact on the broader defense industrial base and potential for future sole-source awards.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Lack of transparency in pricing
Potential for cost overruns without competitive pressure

Positive Signals

Provides critical advanced radar technology
Supports U.S. Army operational needs
Long-term contract provides stability for the supplier

Sector Analysis

This contract falls within the defense sector, specifically focusing on advanced sensor technology and manufacturing. Spending in this area is driven by national security needs and technological advancements, with significant government investment.

Small Business Impact

The data indicates that this contract was not awarded to small businesses, as Northrop Grumman Systems Corporation is a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

As a sole-source award, this contract warrants close oversight to ensure fair pricing and effective delivery. The Department of Defense should monitor performance and costs diligently to mitigate risks associated with non-competitive procurements.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for cost escalation
Dependency on a single supplier
Limited transparency in cost justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THIS IS A THREE (3) YEAR FFP DEFINITIVE CONTRACT WITH AN ESTIMATED VALUE OF $82.5 MILLION. THIS ACTION WILL PROVIDE UP TO 94 SMALL TACTICAL RADAR - LIGHTWEIGHT (STARLITE) SYNTHETIC APERTURE RADAR/GROUND MOVING TARGET INDICATOR (SAR/GMTI) SYSTEMS. THE CONTRACT WILL HAVE A BASE YEAR QUANTITY MAXIMUM OF 60 SYSTEMS, AND TWO OPTION YEARS FOR A MAXIMUM OF 50 AND 40 SYSTEMS, RESPECTIVELY. THIS IS A SOLE SOURCE CONTRACT.

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 Army).

What is the total obligated amount?

The obligated amount is $64.8 million.

What is the period of performance?

Start: 2014-04-23. End: 2019-09-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the government received fair and reasonable pricing?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. The government should have conducted a thorough price analysis, potentially including cost breakdowns from the contractor and comparisons to similar, albeit not identical, systems, to establish fair and reasonable pricing. Documentation of this justification and analysis is crucial for accountability.

What are the long-term risks associated with relying on a single supplier for critical radar systems like STARLITE?

Long-term reliance on a sole-source supplier can lead to vendor lock-in, reduced innovation, and potential price increases over time as competition is absent. It also poses a supply chain risk if the sole provider faces production issues or goes out of business. The government should explore strategies for developing alternative sources or ensuring robust contract terms to mitigate these risks.

How does the performance of these STARLITE systems align with the operational requirements and expectations of the U.S. Army, and what metrics are used to assess effectiveness?

The effectiveness of the STARLITE systems is likely assessed through rigorous testing and evaluation protocols defined in the contract, focusing on key performance parameters such as detection range, accuracy, reliability, and operational uptime. The U.S. Army's satisfaction with the system's contribution to mission objectives and its ability to meet evolving battlefield demands would be the ultimate measure of effectiveness.

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

Solicitation ID: W15P7T13RC117

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1580B W NURSERY RD MS B585, LINTHICUM HEIGHTS, MD, 21090

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

Financial Breakdown

Contract Ceiling: $64,754,895

Exercised Options: $64,754,895

Current Obligation: $64,754,895

Subaward Activity

Number of Subawards: 3258

Total Subaward Amount: $578,308,720

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline