DoD's $39.9M Northrop Grumman contract for broadcasting equipment shows fair value with 2 bidders

Contract Overview

Contract Amount: $39,901,596 ($39.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2012-07-31

Contract Duration: 670 days

Daily Burn Rate: $59.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DELIVERY ORDER TO PROCURE PIED KGV72

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14610

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $39.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: DELIVERY ORDER TO PROCURE PIED KGV72 Key points: 1. The contract was awarded under full and open competition, indicating a competitive market for these goods. 2. The fixed-price contract type helps mitigate cost overruns for the government. 3. The delivery order period of performance was 670 days, suggesting a moderate-term need. 4. The award was made to a large, established defense contractor, Northrop Grumman. 5. The North American Industry Classification System (NAICS) code 334220 points to the manufacturing of radio and television broadcasting and wireless communications equipment. 6. The contract was a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the underlying IDIQ or broader program it supports. However, the award amount of $39.9 million for broadcasting equipment over a 670-day period suggests a moderate investment. The firm fixed-price nature of the contract is a positive indicator for cost control. Without more comparable contract data for similar specialized broadcasting equipment from Northrop Grumman or its competitors, a precise value-for-money assessment is difficult, but the competition level suggests a reasonable price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of 2 bidders indicates a degree of competition for this specific delivery order. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: The full and open competition, even with two bidders, suggests that taxpayers benefited from a competitive process, likely leading to a more favorable price than a sole-source award. However, the limited number of bidders might mean there was room for further price reduction with more market participation.

Public Impact

The Department of the Army is the primary beneficiary, receiving specialized broadcasting equipment. The equipment procured likely supports military communications, intelligence gathering, or public affairs broadcasting capabilities. The contract's geographic impact is tied to the delivery location, indicated as New York (ST: NY, SN: NEW YORK). The contract supports the manufacturing sector, potentially impacting the workforce involved in producing advanced wireless communications equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may not have yielded the absolute best price.
The specific capabilities and necessity of the procured broadcasting equipment are not detailed, making it hard to assess strategic value.
Reliance on a single large contractor for specialized equipment could pose future supply chain risks if not managed carefully.

Positive Signals

Awarded under full and open competition, ensuring a fair process.
Firm fixed-price contract type provides cost certainty.
The contractor, Northrop Grumman, is a well-established entity with a track record in defense systems.
The delivery order mechanism suggests integration into a potentially larger, strategic procurement framework.

Sector Analysis

The procurement falls within the manufacturing sector, specifically NAICS code 334220 (Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing). This sector is characterized by technological innovation and often involves complex supply chains. The market size for such specialized defense-related broadcasting equipment is niche, driven by government requirements. Comparable spending benchmarks are difficult to establish without more specific technical details of the equipment, but defense spending on communications and electronic warfare systems is substantial.

Small Business Impact

This contract does not appear to have a small business set-aside (SB: false). Given the nature of advanced broadcasting equipment and the prime contractor being Northrop Grumman, it is possible that small businesses could be involved as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. The focus appears to be on large prime contractors for this type of specialized technology.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a delivery order, it likely adheres to the oversight mechanisms of the parent IDIQ contract. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or award.

Related Government Programs

Defense Communications Systems
Electronic Warfare Equipment
Wireless Communication Technology
Broadcasting Infrastructure
Northrop Grumman Defense Contracts

Risk Flags

Limited Competition
Potential Vendor Lock-in
Lack of Specific Technical Details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. DELIVERY ORDER TO PROCURE PIED KGV72

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 $39.9 million.

What is the period of performance?

Start: 2010-09-30. End: 2012-07-31.

What is the specific type and capability of the broadcasting equipment procured under this delivery order?

The provided data indicates the contract is for 'DELIVERY ORDER TO PROCURE PIED KGV72' and falls under NAICS code 334220 (Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing). However, the specific technical details, model numbers, or intended operational capabilities of the 'PIED KGV72' equipment are not publicly available in this dataset. This equipment likely relates to specialized military broadcasting, signal intelligence, or communication systems, given the Department of Defense as the procuring agency. Further investigation into the contract's description or associated documentation would be needed to ascertain the precise nature and function of the procured items.

How does the $39.9 million award amount compare to similar broadcasting equipment procurements by the DoD?

Direct comparison of the $39.9 million award for this specific delivery order to similar DoD procurements is challenging without more granular data on the equipment's specifications and quantity. The award covers a 670-day period, suggesting a moderate scale. However, the DoD procures a vast array of communication and broadcasting equipment, ranging from tactical radios to large-scale broadcast infrastructure. Without knowing if 'PIED KGV72' represents a standard item, a custom solution, or a system upgrade, benchmarking against other contracts is difficult. Generally, specialized defense electronics can command significant prices due to R&D, security requirements, and performance standards.

What is Northrop Grumman's track record with similar DoD contracts for broadcasting or communication equipment?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in aerospace, defense, and information systems. They have a significant history of delivering complex communication, electronic warfare, and intelligence systems to the Department of Defense and other government agencies. While specific details on 'PIED KGV72' are limited, Northrop Grumman's portfolio includes advanced radar, electronic warfare suites, and communication networks. Their track record suggests they possess the technical capability and manufacturing capacity to fulfill such contracts. Past performance evaluations and contract histories would provide a more detailed assessment of their reliability and quality in delivering similar equipment.

What are the potential risks associated with this contract, given it's a delivery order from a single large contractor?

Potential risks include vendor lock-in, where the government becomes dependent on Northrop Grumman for sustainment, upgrades, or future procurements related to the 'PIED KGV72' system. If the system is highly specialized, finding alternative support or replacements could be difficult and costly. Furthermore, reliance on a single large contractor for critical broadcasting equipment might pose supply chain vulnerabilities, especially if components are sourced from limited suppliers. The fixed-price nature mitigates cost overrun risk, but performance or delivery delays remain a possibility, impacting operational readiness if the equipment is essential.

How has DoD spending on Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing (NAICS 334220) trended historically?

Historical spending data for NAICS 334220 by the DoD can be accessed through government databases like FPDS. Generally, defense spending in this sector fluctuates based on technological advancements, evolving threats, and strategic priorities. Periods of increased geopolitical tension or modernization efforts often drive higher investment in advanced communication and broadcasting technologies. While this specific $39.9 million delivery order represents a single transaction, broader trends would show cycles of investment in areas like secure communications, electronic warfare, and intelligence gathering platforms, which often incorporate elements of broadcasting technology.

What is the significance of the contract being a Firm Fixed Price (FFP) award type?

The Firm Fixed Price (FFP) award type is significant because it places the majority of the cost risk on the contractor, Northrop Grumman. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the government with maximum cost certainty and predictability. It incentivizes the contractor to manage its costs efficiently to maximize profit. For the DoD, this means that the $39.9 million ceiling is unlikely to be exceeded due to contractor cost overruns, making budgeting more straightforward. However, FFP contracts typically require well-defined specifications upfront to avoid disputes.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1800 GLENN CURTISS ST, CARSON, CA, 90746

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,901,596

Exercised Options: $39,901,596

Current Obligation: $39,901,596

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T10DB205

IDV Type: IDC

Timeline