DoD Awards Northrop Grumman $86.2M for AN/APR-39 Radar Systems Amidst Limited Competition
Contract Overview
Contract Amount: $86,229,415 ($86.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-03-28
End Date: 2027-08-15
Contract Duration: 1,235 days
Daily Burn Rate: $69.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: AN/APR-39 RADAR SIGNAL DETECTING SET (RSDS) PRODUCTION
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $86.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AN/APR-39 RADAR SIGNAL DETECTING SET (RSDS) PRODUCTION Key points: 1. Significant contract value for critical radar systems. 2. Sole provider Northrop Grumman dominates the market for this specific technology. 3. Potential risk associated with single-source procurement and lack of competitive pricing. 4. The sector focuses on advanced defense electronics and instrumentation.
Value Assessment
Rating: questionable
The contract is a Cost Plus Incentive Fee type, which can lead to cost overruns. Benchmarking against similar radar systems is difficult due to the specialized nature and sole-source award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Northrop Grumman. This limits price discovery and potentially inflates costs as there is no competitive pressure.
Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition for this essential defense equipment.
Public Impact
Ensures continued operational capability for U.S. Army aircraft. Supports advanced threat detection and situational awareness for warfighters. Investment in high-tech defense manufacturing capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Critical defense system
- Long-term contract duration
Sector Analysis
This contract falls within the defense electronics manufacturing sector, specifically for radar signal detecting sets. Spending benchmarks for such specialized systems are hard to establish due to proprietary technology and limited market players.
Small Business Impact
The awardee is a large corporation, and there is no indication of small business participation in this specific contract. Opportunities for small businesses in this specialized defense manufacturing area are likely limited.
Oversight & Accountability
The Department of Defense oversees this contract. Given the sole-source nature, robust oversight is crucial to ensure fair pricing and prevent potential cost inefficiencies.
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 procurement
- Cost-plus contract type
- Potential for price escalation
- Lack of competitive benchmarking
- Limited small business participation
Tags
search-detection-navigation-guidance-aer, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $86.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AN/APR-39 RADAR SIGNAL DETECTING SET (RSDS) PRODUCTION
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 $86.2 million.
What is the period of performance?
Start: 2024-03-28. End: 2027-08-15.
What is the justification for the sole-source award of the AN/APR-39 RSDS production contract?
The justification for a sole-source award typically involves proprietary technology, unique capabilities, or the lack of alternative sources that can meet the specific requirements. Without a competitive bidding process, it is difficult to independently verify these claims and ensure the government is receiving the best value for taxpayer dollars.
How does the Cost Plus Incentive Fee structure impact the final cost of the radar systems?
A Cost Plus Incentive Fee (CPIF) contract allows the contractor to recover costs plus a fee that is adjusted based on performance against pre-determined targets. While it incentivizes efficiency, it also means the final price is not fixed and can fluctuate based on cost and performance outcomes, potentially leading to higher costs than a fixed-price contract if targets are not met or are poorly defined.
What are the long-term implications of relying on a single supplier for critical defense electronics like the AN/APR-39?
Long-term reliance on a single supplier can create strategic vulnerabilities, including potential supply chain disruptions, price escalation over time, and a lack of innovation driven by competition. It also reduces the government's leverage in future negotiations and procurement cycles for this essential technology.
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: 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: $86,229,415
Exercised Options: $86,229,415
Current Obligation: $86,229,415
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $85,197
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ23D0058
IDV Type: IDC
Timeline
Start Date: 2024-03-28
Current End Date: 2027-08-15
Potential End Date: 2027-08-15 00:00:00
Last Modified: 2025-12-23
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