DoD Awards Northrop Grumman $92M for Infrared Countermeasure Systems, Research & Development Focus
Contract Overview
Contract Amount: $92,175,326 ($92.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-09-28
End Date: 2020-11-30
Contract Duration: 794 days
Daily Burn Rate: $116.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: R&D
Official Description: PURCHASE OF COMMON INFRARED COUNTERMEASURE SYSTEM QUICK REACTION CAPABILITY (CIRCM QRC2) B-KITS, A QUANTITY OF 69 EACH
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $92.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PURCHASE OF COMMON INFRARED COUNTERMEASURE SYSTEM QUICK REACTION CAPABILITY (CIRCM QRC2) B-KITS, A QUANTITY OF 69 EACH Key points: 1. Spending is concentrated with a single large contractor, Northrop Grumman. 2. The contract falls under Research and Development, a critical but often complex sector. 3. A 'Not Competed' award raises questions about price discovery and potential value. 4. The firm fixed-price contract type offers some cost certainty for the government.
Value Assessment
Rating: questionable
The $92.18 million award for 69 CIRCM QRC2 B-Kits at approximately $1.32 million per unit appears high. Benchmarking against similar advanced defense systems is difficult without more data, but the lack of competition suggests potential for overpricing.
Cost Per Unit: $1,319,932.26
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis ('Not Competed'), indicating a lack of competitive bidding. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for this significant R&D expenditure means taxpayers may not be receiving the best possible price for these advanced countermeasure systems.
Public Impact
Enhances military aviation safety through advanced infrared countermeasures. Supports critical research and development in defense technology. Potential for cost overruns due to sole-source award. Impacts the competitive landscape for advanced defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- High per-unit cost warrants further investigation.
- Research and Development contracts can have uncertain outcomes and costs.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Addresses a critical defense need for countermeasure systems.
Sector Analysis
This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector (NAICS 541715). Spending in this area is crucial for technological advancement but often involves higher risk and less predictable costs compared to established product procurements.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large business. There is no indication that small businesses were involved in this specific sole-source contract, limiting opportunities for them in this instance.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure the contractor is meeting performance requirements and that costs are reasonable, despite the lack of competitive pressure.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- High per-unit cost requires validation.
- R&D contracts carry inherent cost and performance risks.
- Potential for scope creep in research and development.
Tags
research-and-development-in-the-physical, department-of-defense, il, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $92.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. PURCHASE OF COMMON INFRARED COUNTERMEASURE SYSTEM QUICK REACTION CAPABILITY (CIRCM QRC2) B-KITS, A QUANTITY OF 69 EACH
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 $92.2 million.
What is the period of performance?
Start: 2018-09-28. End: 2020-11-30.
What specific factors justified the sole-source award for the CIRCM QRC2 B-Kits, and were alternatives explored?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. For this contract, the specific rationale needs to be detailed in the contract's justification and approval (J&A) document. Without access to this document, it's difficult to assess if alternatives were truly non-existent or if the government adequately explored options to foster competition.
How does the per-unit cost of $1.32 million compare to industry benchmarks for similar advanced infrared countermeasure systems?
Benchmarking this per-unit cost is challenging without access to proprietary data or specific government cost analyses. However, $1.32 million per unit for a 'B-Kit' suggests a highly sophisticated and potentially costly system. A thorough review would involve comparing it to costs of similar systems procured competitively or through other government contracts, considering technological sophistication and quantity.
What is the projected long-term cost and effectiveness of this CIRCM system, considering potential upgrades and sustainment?
The initial $92 million award covers the R&D and procurement of a specific quantity. The long-term cost will depend on sustainment, maintenance, potential upgrades, and future procurements. Effectiveness relies on the system's ability to counter evolving infrared threats. A comprehensive analysis would need to project total lifecycle costs and assess the system's adaptability to future threats.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ17R0169
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $92,175,326
Exercised Options: $92,175,326
Current Obligation: $92,175,326
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $101,680,004
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-09-28
Current End Date: 2020-11-30
Potential End Date: 2020-11-30 12:11:00
Last Modified: 2023-08-25
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