Northrop Grumman Awarded $125M for Small Arms Ammunition Manufacturing

Contract Overview

Contract Amount: $12,501,447 ($12.5M)

Contractor: Northrop Grumman Corporation

Awarding Agency: Department of Defense

Start Date: 2002-10-31

End Date: 2016-01-13

Contract Duration: 4,822 days

Daily Burn Rate: $2.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200304!000028!2100!AE30 !TACOM - PICATINNY !DAAE3003C1005 !A!N! !N! !20021031!20061031!014762236!008255408!016435559!N!NORTHROP GRUMMAN CORPORATION !1111 WEST THIRD STREET !AZUSA !CA!91702!03386!037!06!AZUSA !LOS ANGELES !CALIFORNIA!+000000300000!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !332992!E! !3!A!S! ! ! !99990909!B! ! !N!Z!D!U!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !Z!A!A!A!000!A!D!N! ! ! ! ! ! !0001! !

Place of Performance

Location: AZUSA, LOS ANGELES County, CALIFORNIA, 91702

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.5 million to NORTHROP GRUMMAN CORPORATION for work described as: 200304!000028!2100!AE30 !TACOM - PICATINNY !DAAE3003C1005 !A!N! !N! !20021031!20061031!014762236!008255408!016435559!N!NORTHROP GRUMMAN CORPORATION !1111 WEST THIRD STREET !AZUSA !CA!91702!03386!037!06!AZUSA !LOS A… Key points: 1. Contract awarded to Northrop Grumman Corporation for $125,014,470. 2. The contract is for Small Arms Ammunition Manufacturing. 3. The contract was not competed, raising potential concerns about price discovery. 4. The sector is Defense, specifically related to ammunition manufacturing.

Value Assessment

Rating: fair

The contract value is substantial at $125M. Without specific unit cost data or benchmarks for similar ammunition contracts, a precise value assessment is difficult. The Cost Plus Fixed Fee structure can lead to cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source or limited competition scenario. This lack of competition may have limited the government's ability to secure the best possible price and terms.

Taxpayer Impact: The absence of competition could result in taxpayers paying a premium for the ammunition, as there was no market pressure to drive down costs.

Public Impact

Ensures supply of critical small arms ammunition for defense purposes. Potential for higher costs due to lack of competitive bidding. Supports a major defense contractor, impacting the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Long contract duration (over 13 years)

Positive Signals

Ensures supply of essential defense material
Awarded to a known defense contractor

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the manufacturing of small arms ammunition. Spending in this area is critical for military readiness, but often involves specialized production capabilities.

Small Business Impact

The contract was awarded to Northrop Grumman Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The contract's long duration and sole-source nature warrant close oversight to ensure cost control and performance. The Department of Defense and the Defense Contract Management Agency are responsible for monitoring this contract.

Related Government Programs

Small Arms Ammunition Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee structure can incentivize higher costs.
Extended contract performance period (over 13 years).
Lack of detailed cost breakdown makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.5 million to NORTHROP GRUMMAN CORPORATION. 200304!000028!2100!AE30 !TACOM - PICATINNY !DAAE3003C1005 !A!N! !N! !20021031!20061031!014762236!008255408!016435559!N!NORTHROP GRUMMAN CORPORATION !1111 WEST THIRD STREET !AZUSA !CA!91702!03386!037!06!AZUSA !LOS ANGELES !CALIFORNIA!+000000300000!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A6 !AMMUNITION !1000!NOT DISCERNABLE OR CLASSIFIED !332992!E! !3!A!S! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $12.5 million.

What is the period of performance?

Start: 2002-10-31. End: 2016-01-13.

What is the average unit cost for the ammunition produced under this contract, and how does it compare to industry benchmarks?

The provided data does not include specific unit cost information for the ammunition. To assess value, a comparison with industry benchmarks for similar types of small arms ammunition would be necessary. Without this, it's difficult to determine if the $125M award represents a fair price per unit.

What were the justifications for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The data indicates the contract was 'NOT COMPETED'. The specific justifications for this sole-source award are not detailed. Typically, sole-source contracts are justified by factors such as unique capabilities, urgent needs, or lack of available sources. A thorough review would be needed to confirm the validity of these justifications.

How effectively has Northrop Grumman managed the Cost Plus Fixed Fee structure to control costs and ensure timely delivery of ammunition?

The effectiveness of cost control and delivery performance under this Cost Plus Fixed Fee contract is not detailed in the provided data. This contract type requires diligent oversight from the contracting agency to manage expenditures and ensure the fixed fee remains appropriate relative to the work performed and risks undertaken.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms Ammunition Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 1111 WEST THIRD STREET, AZUSA, CA, 91702

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline