DoD awards $118M+ for infrared countermeasures, with Northrop Grumman as sole provider

Contract Overview

Contract Amount: $118,299,471 ($118.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2020-01-23

End Date: 2022-05-31

Contract Duration: 859 days

Daily Burn Rate: $137.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 5 YEAR IDIQ CONTRACT FOR COMMON INFRARED COUNTERMEASURE (CIRCM) HARDWARE AND SERVICES

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $118.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 5 YEAR IDIQ CONTRACT FOR COMMON INFRARED COUNTERMEASURE (CIRCM) HARDWARE AND SERVICES Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Significant investment in advanced defense technology, crucial for aircraft survivability. 3. Long-term contract structure suggests ongoing need and potential for future modifications. 4. Sole-source award limits opportunities for new market entrants and innovation. 5. Focus on hardware and services indicates a comprehensive approach to countermeasure support. 6. Geographic concentration in Illinois for contractor operations.

Value Assessment

Rating: questionable

The contract's value of over $118 million for common infrared countermeasures (CIRCM) hardware and services is substantial. However, as a sole-source award, it is difficult to benchmark against competitive offerings or assess if the pricing represents the best value for the government. Without competitive bids, there's a risk of inflated costs compared to what might be achieved in an open market. The firm fixed-price structure offers some cost certainty, but the absence of competition is a primary concern for value realization.

Cost Per Unit: N/A

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 bypasses the typical competitive bidding process. While sole-source awards can be justified for specialized or proprietary technologies where only one vendor can meet the requirement, it significantly reduces price discovery and can lead to higher costs for the government. The lack of competition means potential savings from a bidding war are forgone.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The government did not leverage multiple bids to secure the most cost-effective solution, potentially leading to a less favorable price than if the contract had been competed.

Public Impact

The U.S. Army benefits from enhanced aircraft survivability through advanced infrared countermeasures. Service members operating aircraft equipped with CIRCM systems receive critical protection against missile threats. The contract supports the defense industrial base, particularly in specialized electronic warfare and sensor manufacturing. Workforce in Illinois is supported through the operations of Northrop Grumman Systems Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs.
Lack of transparency in pricing due to no competitive bids.
Potential for vendor lock-in with a single provider for critical defense technology.

Positive Signals

Addresses a critical defense need for aircraft survivability.
Firm fixed-price contract provides cost certainty for the awarded scope.
Long-term contract structure (IDIQ) allows for flexibility in meeting evolving requirements.

Sector Analysis

The Common Infrared Countermeasure (CIRCM) system falls within the broader defense electronics and aerospace manufacturing sector. This sector is characterized by high R&D investment, stringent performance requirements, and often, long procurement cycles. The market for advanced defense systems like CIRCM is typically dominated by a few large, established prime contractors. Spending benchmarks for similar advanced electronic warfare systems can range from tens to hundreds of millions of dollars, depending on the system's complexity and the scope of services included. This contract represents a significant, albeit sole-source, investment in a critical component of military aviation safety.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on small business participation is likely minimal unless Northrop Grumman voluntarily includes them in its supply chain. Opportunities for small businesses would typically arise if the contract were competed or if specific subcontracting goals were mandated.

Oversight & Accountability

The Department of the Army, as the procuring agency, is responsible for oversight of this contract. As a firm fixed-price contract, the primary oversight would focus on delivery schedules, technical performance, and adherence to contract terms. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. The contract's duration and value necessitate diligent monitoring to ensure the government receives the intended capabilities and value.

Related Government Programs

Advanced Threat Warning Systems
Electronic Warfare Systems
Aircraft Survivability Equipment
Missile Defense Systems
Department of Defense Procurement

Risk Flags

Sole-source award limits competition.
Potential for higher costs due to lack of competitive bidding.
Reliance on a single supplier for critical defense technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $118.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 5 YEAR IDIQ CONTRACT FOR COMMON INFRARED COUNTERMEASURE (CIRCM) 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 Army).

What is the total obligated amount?

The obligated amount is $118.3 million.

What is the period of performance?

Start: 2020-01-23. End: 2022-05-31.

What is the track record of Northrop Grumman Systems Corporation in delivering similar defense systems?

Northrop Grumman Systems Corporation has a long and established track record in the defense industry, particularly in areas such as aerospace, defense electronics, and information systems. They are a major contractor for the U.S. Department of Defense and have been involved in numerous complex programs, including advanced avionics, electronic warfare systems, and communication technologies. Their experience with sophisticated defense hardware and integrated systems suggests a capability to deliver on the CIRCM contract. However, specific performance metrics or past issues related to this particular system or similar countermeasure technologies would require deeper investigation into contract performance reports and historical data.

How does the pricing of this contract compare to similar infrared countermeasure systems procured by other agencies or allies?

Direct price comparison for this specific CIRCM contract is challenging due to its sole-source nature and the proprietary aspects of the technology. Typically, competitive procurements allow for benchmarking against multiple bids. Without such a benchmark, assessing value requires comparing the unit costs or overall contract value against publicly available data for similar, though not identical, advanced countermeasure systems. Such comparisons are often made by defense analysts using data from other government contracts or international defense sales. However, variations in system capabilities, quantities, service inclusions, and contract terms (e.g., fixed-price vs. cost-plus) make direct comparisons difficult and often inconclusive without detailed analysis.

What are the primary risks associated with a sole-source award for critical defense technology?

The primary risks associated with a sole-source award for critical defense technology like CIRCM include potential for inflated pricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a risk of vendor lock-in. Taxpayers may bear a higher cost than necessary. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain and reduce flexibility if the government needs to adapt requirements or seek alternative solutions. Without competitive pressure, the government has less leverage to negotiate favorable terms or drive down costs over the life of the contract.

What is the expected effectiveness of the Common Infrared Countermeasure (CIRCM) hardware and services?

The Common Infrared Countermeasure (CIRCM) system is designed to protect military aircraft from infrared-guided missiles, a significant threat in modern warfare. It typically works by detecting incoming missiles and then employing countermeasures, such as flares or directed energy, to decoy or disrupt the missile's guidance system. The effectiveness of CIRCM hardware and services is crucial for enhancing aircraft survivability and mission success. While specific performance data is often classified, the U.S. Army's continued investment and reliance on this technology, even through a sole-source contract, suggests it is considered a vital and effective component of aviation defense. The 'services' aspect likely includes maintenance, upgrades, and training to ensure ongoing operational effectiveness.

What has been the historical spending trend for CIRCM or similar countermeasure systems by the Department of Defense?

Historical spending on CIRCM and similar advanced countermeasure systems by the Department of Defense has been substantial and generally increasing, reflecting the evolving threat landscape. Programs like CIRCM represent significant investments in protecting high-value aviation assets. While specific figures for CIRCM prior to this contract would require detailed historical procurement data, the overall trend in defense spending on electronic warfare and aircraft survivability equipment has been robust. Agencies like the Army, Navy, and Air Force consistently allocate significant portions of their budgets to these critical capabilities to counter emerging threats from adversaries. This $118M+ contract is indicative of the ongoing commitment to maintaining and advancing these protective technologies.

Are there any known performance issues or contract disputes related to Northrop Grumman's previous work on CIRCM or related systems?

Information regarding specific performance issues or contract disputes related to Northrop Grumman's work on CIRCM or directly comparable systems is not readily available in the public domain without access to detailed contract performance reports or legal databases. Major defense contractors like Northrop Grumman engage in numerous large-scale projects, and while most are executed successfully, occasional challenges or disputes can arise. For a sole-source contract of this magnitude, it is reasonable to assume that the government has conducted due diligence regarding the contractor's past performance. However, without specific public records or official reports detailing issues, it is difficult to provide a definitive assessment of past problems.

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: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, 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: $118,299,471

Exercised Options: $118,299,471

Current Obligation: $118,299,471

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ19D0110

IDV Type: IDC

Timeline