Northrop Grumman awarded $170.6M for various visual equipment, with limited competition

Contract Overview

Contract Amount: $170,556,167 ($170.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2008-01-25

End Date: 2010-02-28

Contract Duration: 765 days

Daily Burn Rate: $222.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VARIOUS VIS EQUIPMENT

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $170.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: VARIOUS VIS EQUIPMENT Key points: 1. Contract awarded to a single vendor suggests potential for higher costs due to lack of competitive pressure. 2. The firm fixed-price contract type shifts risk to the contractor, which can be beneficial for the government. 3. A duration of 765 days indicates a significant, long-term need for the visual equipment. 4. The contract's value is substantial, requiring careful monitoring of performance and delivery. 5. Awarded under the 'Other Communications Equipment Manufacturing' NAICS code, indicating a specialized product category. 6. The absence of small business set-asides means opportunities for smaller firms may be limited in this specific award.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the 'VARIOUS VIS EQUIPMENT' procured. However, a $170.6 million award over approximately two years for specialized equipment suggests a significant investment. The lack of competition raises concerns about whether the government secured the best possible price. Without comparable contract data or detailed specifications, it's difficult to definitively assess value for money, but the sole-source nature warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Systems Corporation, was solicited. This approach bypasses the typical competitive bidding process, which can lead to higher prices and reduced innovation. The rationale for a sole-source award is not provided, but it typically implies unique capabilities or urgent needs that cannot be met by other suppliers. The lack of competition limits the government's ability to leverage market forces for optimal pricing and terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. This can result in a higher overall expenditure for the government compared to a competed contract for similar goods or services.

Public Impact

The Department of the Army is the primary beneficiary, receiving the visual equipment. The equipment is intended for use by military personnel, likely supporting operational or training needs. The contract's geographic impact is centered in Maryland, where the contractor is located. Workforce implications are primarily within Northrop Grumman, potentially involving manufacturing and logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency and accountability.
Potential for vendor lock-in if specialized equipment is difficult to replace.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Award to an established defense contractor like Northrop Grumman suggests a degree of reliability in delivery.

Sector Analysis

The 'Other Communications Equipment Manufacturing' sector encompasses a wide range of electronic equipment used for communication. This contract falls within the broader defense industrial base, where specialized visual equipment can be critical for military operations, intelligence gathering, and training. The market for such equipment is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this sector is heavily influenced by defense budgets and technological advancements.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to a large prime contractor like Northrop Grumman suggests that subcontracting opportunities for small businesses may exist, but these are not guaranteed or mandated by the contract terms. The absence of a specific small business focus in this award means that the direct economic impact on the small business ecosystem for this particular procurement is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a sole-source award, transparency might be less than in a competed scenario. Accountability measures would be tied to the contract's performance clauses and delivery schedules. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Visual Information Systems
Military Communication Equipment Procurement
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns not mitigated by competition.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $170.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. VARIOUS VIS 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 $170.6 million.

What is the period of performance?

Start: 2008-01-25. End: 2010-02-28.

What specific types of 'VARIOUS VIS EQUIPMENT' were procured under this contract?

The provided data does not specify the exact nature of the 'VARIOUS VIS EQUIPMENT.' This could range from display systems, cameras, projectors, or other visual aids critical for military operations, training, or intelligence. Without a detailed statement of work or product list, it is impossible to ascertain the precise technological capabilities or applications of the equipment. Further investigation into contract line item numbers (CLINs) or associated documentation would be necessary to identify the specific items.

What was the justification for awarding this contract on a sole-source basis?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source award. The specific justification for this determination is not provided. Common reasons for sole-source awards include the existence of only one responsible source capable of providing the required goods or services, urgent and compelling needs that preclude full and open competition, or specific national security requirements. Without the official justification document, it is speculative to determine the precise reason, but it suggests a perceived lack of alternatives or a critical, time-sensitive requirement.

How does the $170.6 million value compare to similar visual equipment procurements by the Department of Defense?

Direct comparison is difficult without knowing the exact specifications of the 'VARIOUS VIS EQUIPMENT.' However, $170.6 million is a substantial sum for a single contract, even within the defense sector. If the equipment is standard, this value might be considered high, especially given the lack of competition. If it involves highly specialized, technologically advanced systems, the price could be more aligned with market rates for such niche products. Benchmarking would require identifying contracts for comparable systems or quantities.

What is Northrop Grumman Systems Corporation's track record with similar visual equipment contracts for the DoD?

Northrop Grumman is a major defense contractor with extensive experience in various technological domains, including communications and electronics. While specific details on their history with 'VARIOUS VIS EQUIPMENT' are not in the provided data, their overall profile suggests they possess the capability to deliver complex systems. Their track record would typically be assessed through past performance evaluations in previous contracts, including on-time delivery, quality of products, and adherence to budget. A review of their contract history with the DoD would reveal their performance trends.

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

The primary risks of a sole-source award of this magnitude include potential overpricing due to the absence of competitive pressure, reduced incentive for innovation from the contractor, and a lack of transparency in the procurement process. Taxpayers may bear a higher cost than necessary. Furthermore, the government could become overly reliant on a single supplier, creating challenges if that supplier faces production issues or decides to exit the market. Robust oversight and performance management are crucial to mitigate these risks.

What is the historical spending trend for 'Other Communications Equipment Manufacturing' by the Department of the Army?

The provided data only pertains to this single contract. To understand historical spending trends for 'Other Communications Equipment Manufacturing' by the Department of the Army, one would need to analyze aggregate spending data over multiple fiscal years. This would involve querying federal procurement databases (like FPDS or USASpending) for contracts awarded under NAICS code 334290 by the Army. Such an analysis could reveal patterns in spending, identify major contractors, and highlight fluctuations based on defense priorities and budget allocations.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 03

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $170,556,167

Exercised Options: $170,556,167

Current Obligation: $170,556,167

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T07DL002

IDV Type: IDC

Timeline