According to DefenseNews and other sources, the US Air Force has awarded both Northrop Grumman (NG) and Raytheon contracts to compete to be the sole source supplier for the new generation of the Joint Surveillance and Target Attack Radar System (JSTARS). The fixed price contracts are worth $60 million for Raytheon and $70 million for NG.
Without getting technical, JSTARS “provides an airborne, stand-off range, surveillance and target acquisition radar and command and control center,” and is the ground counterpart to AWACS. For additional information on the existing JSTARS, click here.
With the downselect to single solution to occur in late 2017 or early 2018, this dual contract award continues the trend of the Department of Defense (DOD) reducing risk by awarding multiple smaller parallel contracts instead of one large contact through some portion of the design phase. It results in more mature designs from which to choose instead of only relying on proposals.
The smaller contact also forces the company to invest its own money in the design, and is therefore less likely able to use funny accounting to make money on the design portion. This forces efficiency, because the only money to be made is via sales, and that means the contract must be won.
I have been a part of these competition contracts. From a day to day perspective, they run like any other design contract. They follow the same processes, same gates, same accounting. The delta comes at the end. Losing these competitions is significantly more emotionally taxing than losing at the proposal phase.
In one such case, we completed the full design phase, we built and tested our EDM units, and completed numerous failure investigations and rebuilds and retests. The team toiled for four years on the hardware, and when the time came to downselect, the DOD chose our competitor. The demoralization in the room was tangible when the program office told us of the loss as we all had invested years of blood and sweat (proverbial and literal) into the hardware.
That said, as rough as the experience was for my coworkers and me, I completely see the benefits of this process for the DOD. They effectively receive two mature designs and hardware for less than two separate sole source contracts would cost. And more importantly, they have a backup in case the downselected design falters, lowering the program risk.
This new paradigm is further evidence the days of bloated Defense contracts are over.