DoD awards $142M for infrared countermeasures, with Northrop Grumman as sole provider

Contract Overview

Contract Amount: $141,956,667 ($142.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-11-21

End Date: 2025-12-31

Contract Duration: 1,136 days

Daily Burn Rate: $125.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMMON INFARED COUNTERMEASURE FOR PM AIRCRAFT SURVIVABILITY EQUIPMENT

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $142.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: COMMON INFARED COUNTERMEASURE FOR PM AIRCRAFT SURVIVABILITY EQUIPMENT Key points: 1. Contract awarded to a single, established supplier, raising questions about competitive pricing. 2. The firm fixed-price contract type shifts cost risk to the contractor. 3. Long-term contract duration (over 3 years) suggests a sustained need for these critical survivability systems. 4. The product is a key component for aircraft survivability, indicating high strategic importance. 5. Spending on this specific item is concentrated with one major defense contractor. 6. The contract's value is substantial, representing a significant investment in aviation defense.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to definitively assess if the $141.96 million awarded represents optimal value for money. The pricing is set by Northrop Grumman, and external comparisons are limited. However, the nature of specialized defense equipment often involves high research and development costs, which may be reflected in the price. Further analysis would require access to cost breakdowns or comparisons with similar, albeit potentially less advanced, systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning Northrop Grumman was the only entity considered for award. The absence of a competitive bidding process limits the government's ability to solicit multiple proposals and negotiate the best possible price. This approach is typically used when a specific capability is only available from a single source or in urgent situations. The lack of competition means taxpayers did not benefit from potential price reductions that could arise from a bidding war among multiple qualified vendors.

Taxpayer Impact: The sole-source award means taxpayers may not have received the most cost-effective solution, as there was no opportunity for price discovery through competition.

Public Impact

The U.S. Army benefits from enhanced aircraft survivability through these advanced countermeasures. The contract ensures the continued availability of critical defense technology for military operations. The geographic impact is primarily within military aviation units operating the specified aircraft. Workforce implications are likely concentrated within Northrop Grumman's specialized manufacturing and engineering divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification could mask inefficiencies or missed opportunities for savings.
Long-term contract duration without re-competition may reduce incentives for ongoing cost optimization by the contractor.

Positive Signals

Contract supports critical aircraft survivability, directly enhancing warfighter safety.
Firm fixed-price structure transfers cost overrun risk to the contractor.
Award to an established provider like Northrop Grumman suggests a high degree of technical capability and reliability.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on electronic warfare and aircraft survivability equipment. The market for such specialized systems is often dominated by a few large, established defense contractors due to high barriers to entry, including significant R&D investment and stringent security requirements. Spending in this niche is driven by evolving threat landscapes and the need for continuous technological advancement to maintain air superiority and protect aircrews. Comparable spending benchmarks would likely involve other advanced electronic warfare systems or aircraft modification programs.

Small Business Impact

This contract does not appear to include specific small business set-asides. Given the sole-source nature and the specialized technology involved, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or readily available, unless Northrop Grumman voluntarily engages them for specific components or services. This could limit the direct economic benefit to the small business ecosystem in this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are embedded in the firm fixed-price structure, which obligates the contractor to deliver specified goods within the agreed-upon price. Transparency is limited due to the sole-source award, but contract performance metrics and delivery schedules are typically monitored. The Inspector General's office within the DoD may conduct audits or investigations if performance issues or potential fraud are identified.

Related Government Programs

Aircraft Survivability Equipment
Electronic Warfare Systems
Defense Aviation Procurement
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $142.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. COMMON INFARED COUNTERMEASURE FOR PM AIRCRAFT SURVIVABILITY EQUIPMENT

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 $142.0 million.

What is the period of performance?

Start: 2022-11-21. End: 2025-12-31.

What is the specific type of infrared countermeasure being procured and its intended application?

The data indicates the procurement is for 'COMMON INFARED COUNTERMEASURE FOR PM AIRCRAFT SURVIVABILITY EQUIPMENT.' This suggests a standardized system designed to protect personnel and aircraft from infrared-guided missile threats. These countermeasures typically work by deploying flares or other expendable decoys that generate heat signatures to confuse and divert incoming missiles. The 'PM' likely refers to Program Manager, indicating this is a specific program within the Army's aviation portfolio aimed at enhancing the survivability of various aircraft platforms against advanced threats.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The provided data explicitly states the contract was 'NOT COMPETED,' classifying it as sole-source. While the specific justification is not detailed, sole-source awards are typically justified under circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, urgent and compelling needs where competition is impractical, or if the government has already made substantial investments in a particular system that would be duplicated if a new source were sought. Without further documentation, the exact reason remains unconfirmed, but it implies a lack of viable alternatives or a strategic decision to continue with an existing, proven solution.

How does the $141.96 million contract value compare to historical spending on similar countermeasures?

Direct historical spending comparisons for this exact 'COMMON INFARED COUNTERMEASURE' are not provided in the data. However, the value of $141.96 million over approximately three years (November 2022 to December 2025) suggests a significant and sustained investment. Large-scale procurements of advanced aircraft survivability equipment by the Department of Defense often run into tens or hundreds of millions of dollars, reflecting the high cost of specialized technology, research and development, and the critical nature of the equipment. To provide a precise comparison, one would need access to historical contract databases tracking similar systems procured by the Army or other branches.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may pay more than it would in a competitive environment. Another risk is vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and innovation. There's also a risk of reduced contractor incentive to innovate or improve efficiency, as the competitive drive to secure future contracts is diminished. Finally, the lack of transparency inherent in sole-source awards can make it harder to identify potential cost overruns or inefficiencies.

What is Northrop Grumman's track record with providing aircraft survivability equipment to the DoD?

Northrop Grumman is a major defense contractor with a long-standing and extensive track record in providing a wide array of defense systems, including those related to electronic warfare and aircraft survivability. They are known for developing and manufacturing advanced technologies that enhance the protection of military aircraft. Their portfolio often includes infrared countermeasures, radar warning receivers, and other electronic support measures. Given their significant presence in the defense sector and their established capabilities, it is plausible they have supplied similar or related systems to the DoD for many years, making them a likely candidate for sole-source awards in specialized areas where they possess unique expertise or technology.

What is the expected performance period and delivery schedule for this contract?

The contract has a stated start date of November 21, 2022, and an end date of December 31, 2025. This gives a total duration of approximately 3 years and 1 month (or 1136 days as indicated by 'dur'). The contract type is 'DELIVERY ORDER,' which implies that while the overall contract is established, specific quantities and delivery schedules for the countermeasures will be detailed in individual delivery orders issued against this basic contract. This allows for flexibility in meeting evolving requirements over the contract's lifespan.

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

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: $141,956,667

Exercised Options: $141,956,667

Current Obligation: $141,956,667

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $794,778

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ21D0028

IDV Type: IDC

Timeline