Northrop Grumman awarded $27.2M task order for Jupiter Laser system by Department of Defense

Contract Overview

Contract Amount: $27,188,682 ($27.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-11-30

End Date: 2026-08-31

Contract Duration: 1,005 days

Daily Burn Rate: $27.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: TASK ORDER FOR JUPITER LASER

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $27.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TASK ORDER FOR JUPITER LASER Key points: 1. Contract awarded via a sole-source justification, raising questions about potential price overruns and limited market engagement. 2. The cost-plus incentive fee structure may incentivize contractor efficiency but also carries inherent risks if not closely monitored. 3. The contract duration of over three years suggests a significant, long-term commitment to this specific laser technology. 4. The absence of small business participation raises concerns about equitable distribution of federal contracting opportunities. 5. The task order falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code, indicating a specialized defense application.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The cost-plus incentive fee (CPIF) pricing structure, while offering potential for cost savings, also introduces risk if cost overruns occur and are not effectively managed by the government. Without comparable contracts or market data, it's difficult to definitively assess if the $27.2 million represents a fair price for the Jupiter Laser system and associated services. The government must ensure robust oversight to validate costs and ensure performance incentives align with taxpayer interests.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Northrop Grumman was the only vendor considered. The justification for this approach is not detailed in the provided data, but sole-source awards typically occur when only one responsible source can fulfill the requirement. This lack of competition limits the government's ability to explore alternative solutions or leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other capable businesses to compete for federal dollars.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, which will receive the Jupiter Laser system. The system is likely intended for advanced defense applications, potentially enhancing surveillance, targeting, or defensive capabilities. The geographic impact is concentrated within the operational theaters where the Army deploys such advanced technology. Workforce implications may include specialized technical roles for the development, integration, and maintenance of the laser system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Cost-plus incentive fee structure requires diligent government oversight to prevent cost overruns.
Lack of small business participation means missed opportunities for smaller innovative firms.
Long contract duration increases exposure to potential scope creep or evolving technological needs.
Limited public information on the specific capabilities and necessity of the Jupiter Laser system.

Positive Signals

Award to a known defense contractor (Northrop Grumman) suggests a degree of confidence in their capabilities.
The incentive fee component, if structured effectively, can align contractor and government interests towards efficiency.
The task order is for a specific system (Jupiter Laser), indicating a focused technological advancement.
The contract duration allows for potential integration and testing phases necessary for complex defense systems.

Sector Analysis

The defense sector is characterized by high-value, technologically advanced contracts often awarded through complex procurement processes. This contract for a laser system fits within the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry, which is a critical component of national security. Spending in this area is substantial, with major defense contractors like Northrop Grumman playing a significant role. Benchmarks for similar specialized systems are often difficult to ascertain publicly due to classification and proprietary information, but investments in advanced optics and directed energy are a growing trend.

Small Business Impact

This contract does not appear to include any specific small business set-aside provisions, nor is there an indication of subcontracting goals for small businesses. The award to a large prime contractor like Northrop Grumman suggests that the primary focus was on fulfilling the technical requirements through an established entity. This could mean limited direct opportunities for small businesses on this specific task order, potentially impacting their ability to gain experience with advanced defense technologies and secure federal revenue.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. Given the CPIF structure, rigorous financial oversight and performance monitoring will be crucial to ensure costs are controlled and incentives are met. Transparency may be limited due to the sole-source nature and the defense-related application of the technology. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Advanced Directed Energy Systems
Military Laser Technology
Navigation and Guidance Systems
Defense Research and Development
Northrop Grumman Defense Contracts

Risk Flags

Sole Source Justification
Cost-Plus Contract Risk
Lack of Small Business Participation
Limited Public Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TASK ORDER FOR JUPITER LASER

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 $27.2 million.

What is the period of performance?

Start: 2023-11-30. End: 2026-08-31.

What is the specific operational purpose and technological advantage of the Jupiter Laser system?

The provided data does not specify the exact operational purpose or unique technological advantages of the 'Jupiter Laser' system. However, given the NAICS code (334511 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) and the awarding agency (Department of Defense), it is highly probable that the system is intended for advanced military applications. This could include areas such as target designation, counter-measure systems, advanced surveillance, or potentially directed energy weapon capabilities. The 'laser' component suggests a focus on light-based technology for sensing, communication, or offensive/defensive roles. Further details would likely be classified or proprietary.

How does the Cost Plus Incentive Fee (CPIF) structure compare to other contract types for similar defense systems?

Cost Plus Incentive Fee (CPIF) contracts are used when the final costs are uncertain, but the government wants to incentivize the contractor to control costs and meet performance targets. Unlike fixed-price contracts, CPIF allows for reimbursement of allowable costs plus a fee that is adjusted based on performance against pre-determined targets (e.g., cost, schedule, performance). Compared to Cost Plus Fixed Fee (CPFF), CPIF offers greater potential for cost savings if targets are met. However, it requires more complex negotiation and monitoring than fixed-price contracts. For complex, R&D-heavy defense systems where final costs are difficult to predict, CPIF is a common, albeit riskier, choice than fixed-price options, necessitating strong government oversight.

What are the potential risks associated with a sole-source award for a critical defense system like this?

Sole-source awards for critical defense systems carry several significant risks. Firstly, the absence of competition can lead to inflated prices, as the contractor faces no market pressure to offer the most cost-effective solution. Secondly, it limits the government's ability to explore innovative alternatives or leverage a wider range of technological expertise that might be available from other vendors. Thirdly, it can foster a perception of favoritism and reduce transparency in the procurement process. Finally, it may stifle innovation within the broader defense industrial base by concentrating opportunities with a single provider, potentially hindering the development of a more robust and competitive market.

What is Northrop Grumman's track record with similar laser or advanced optics systems for the DoD?

Northrop Grumman Systems Corporation has a substantial and well-documented track record in developing and supplying advanced technologies, including sophisticated sensor systems, electronic warfare capabilities, and various forms of directed energy systems for the Department of Defense. While specific details on their 'Jupiter Laser' program are not publicly available, the company has been a key player in numerous high-profile defense programs involving optics, lasers, and guidance systems. Their history includes work on programs related to missile defense, surveillance, and precision engagement, indicating a strong capability in the domain relevant to this task order. Past performance reviews and contract awards would provide a more granular assessment.

How does the $27.2 million award compare to historical spending on similar defense instrumentation or laser systems?

Directly comparing the $27.2 million award for the 'Jupiter Laser' system to historical spending on similar defense instrumentation or laser systems is challenging without more specific details about the system's capabilities and intended use. The NAICS code 334511 covers a broad range of instruments. However, major defense contractors frequently receive awards in the tens to hundreds of millions of dollars for complex systems. Given that this is a task order under a larger contract vehicle (implied by 'delivery order'), the total value could be part of a larger program. Investments in advanced optics and directed energy for defense applications are generally high-cost endeavors, making $27.2 million a plausible, though not definitively benchmarked, figure for a specialized system.

What are the potential implications of the contract ending in August 2026 for future system development or sustainment?

The contract's end date of August 31, 2026, has several implications for the future development and sustainment of the Jupiter Laser system. Firstly, it necessitates planning for potential follow-on contracts or sustainment efforts well in advance of the expiration date to ensure continuity of operations. If the system proves critical, the DoD will need to decide whether to re-compete the requirement, extend the current contract, or sole-source a follow-on award. The current sole-source nature might influence future procurement strategies. Secondly, the end date provides a defined period for the contractor to deliver and integrate the system, after which the government will assess its performance and determine future needs, potentially leading to upgrades, modifications, or replacement.

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: COST PLUS INCENTIVE FEE (V)

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: $27,188,682

Exercised Options: $27,188,682

Current Obligation: $27,188,682

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $3,837,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ19D0110

IDV Type: IDC

Timeline