DoD awards $46.4M contract for Hard Target Void Sensing Fuze systems to Northrop Grumman

Contract Overview

Contract Amount: $46,440,446 ($46.4M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2027-09-27

Contract Duration: 1,460 days

Daily Burn Rate: $31.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HARD TARGET VOID SENSING FUZE (HTVSF) FMU-167/B SYSTEM

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $46.4 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: HARD TARGET VOID SENSING FUZE (HTVSF) FMU-167/B SYSTEM Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Long-term contract duration (4 years) suggests a sustained need for these specialized munitions. 3. The contract is for ammunition manufacturing, a critical component of defense readiness. 4. Northrop Grumman, a major defense contractor, is the sole awardee. 5. The contract's value is significant within its specific niche of ordnance. 6. Performance is tied to delivery orders, allowing for phased execution and payment.

Value Assessment

Rating: fair

The contract value of $46.4 million over four years for specialized fuze systems appears substantial. Without comparable sole-source contracts or detailed cost breakdowns, it is difficult to definitively benchmark value for money. However, the lack of competition inherently limits the government's ability to secure the lowest possible price. The firm-fixed-price structure shifts some risk to the contractor, but the absence of competitive pressure may mean the price is not optimized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means the government did not benefit from a bidding process that could drive down prices and encourage innovation from multiple sources.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as there was no competitive pressure to reduce costs. This can lead to higher overall spending for essential defense materiel.

Public Impact

The Department of the Air Force benefits from the acquisition of advanced sensing fuze systems for its munitions. This contract supports the production of critical components for military ordnance, enhancing combat effectiveness. The primary geographic impact is likely at Northrop Grumman's facilities in West Virginia, where the contract is managed. The contract supports specialized manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Long contract duration without clear performance metrics in the provided data could mask inefficiencies.
Reliance on a single contractor for critical components poses a supply chain risk.

Positive Signals

Firm-fixed-price contract shifts some cost overrun risk to the contractor.
Award to a major defense contractor like Northrop Grumman suggests established capability and reliability.
Contract supports a critical defense capability, ensuring operational readiness.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality control, and security requirements. Contracts like this are essential for maintaining the nation's defense industrial base. Spending in this area is driven by military modernization efforts and operational demands. Comparable spending benchmarks are difficult to establish due to the niche nature of specialized ordnance components.

Small Business Impact

This contract was not set aside for small businesses, and the prime contractor, Northrop Grumman, is a large defense corporation. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, though large prime contractors often engage small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods. Transparency is limited due to the sole-source nature and the proprietary information typically associated with defense manufacturing. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Ammunition Manufacturing
Defense Ordnance
Air Force Munitions
Northrop Grumman Contracts
Hard Target Munitions

Risk Flags

Sole-source award
Lack of competitive benchmarking
Potential for higher costs due to no competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.4 million to NORTHROP GRUMMAN SYSTEMS CORP. HARD TARGET VOID SENSING FUZE (HTVSF) FMU-167/B SYSTEM

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $46.4 million.

What is the period of performance?

Start: 2023-09-28. End: 2027-09-27.

What is the historical spending pattern for Hard Target Void Sensing Fuze (HTVSF) systems?

Historical spending data for the specific HTVSF FMU-167/B system is not readily available in the provided data snippet. However, the current award of $46.4 million over four years suggests a significant and ongoing investment in this technology. To understand historical patterns, one would need to access broader contract databases and search for previous awards related to this specific fuze or similar advanced ordnance components. Analyzing past contract values, durations, and awardees would reveal trends in demand, technological evolution, and pricing over time. Without this historical context, it's challenging to assess if the current award represents an increase or decrease in spending for this capability.

How does the unit cost of the HTVSF FMU-167/B compare to similar fuze systems?

A direct comparison of the unit cost for the HTVSF FMU-167/B is not possible with the provided data. The contract value is an aggregate amount for an unspecified quantity of systems over four years, and the specific unit price is not detailed. Furthermore, the sole-source nature of the award prevents a direct competitive benchmark. To assess unit cost competitiveness, one would need to identify comparable advanced fuze systems (e.g., precision-guided munitions fuzes, multi-option fuzes) procured by the DoD or other allied nations, ideally through competitive contracts. Analyzing the cost per unit for those systems, considering their technological sophistication and performance characteristics, would provide a basis for evaluating the value proposition of the FMU-167/B.

What are the key performance indicators (KPIs) for this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for a contract involving the manufacturing and delivery of munitions components, typical KPIs would likely include on-time delivery rates, adherence to quality control standards (e.g., defect rates, reliability testing), technical performance specifications (e.g., fuze arming/disarming times, sensing accuracy), and potentially cost control measures if applicable beyond the fixed price. The firm-fixed-price nature implies that meeting all technical and delivery specifications is paramount for the contractor to achieve profitability. The Department of the Air Force would monitor these KPIs to ensure the operational readiness and effectiveness of the delivered systems.

What is Northrop Grumman's track record with similar defense contracts?

Northrop Grumman is a major, well-established defense contractor with extensive experience in producing a wide array of aerospace and defense systems, including munitions and related components. They have a long history of securing large contracts from the Department of Defense and other government agencies. While specific details on their track record for the HTVSF FMU-167/B are not provided, their general profile suggests a capacity for complex manufacturing, adherence to stringent quality standards, and program management expertise. Past performance evaluations and contract award histories would offer a more granular view of their reliability and success rates on comparable programs.

What are the risks associated with a sole-source award for critical defense components?

Sole-source awards for critical defense components like the HTVSF FMU-167/B present several risks. Firstly, the lack of competition can lead to higher prices than might be achieved in a competitive bidding process, resulting in less value for taxpayer money. Secondly, it creates a dependency on a single supplier, which can be problematic if that supplier faces production issues, financial instability, or decides to exit the market. This dependency can also reduce the government's leverage in negotiations. Lastly, without competitive pressure, there may be less incentive for the sole-source provider to innovate or improve efficiency beyond what is contractually required.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 210 STATE ROUTE 956, ROCKET CENTER, WV, 26726

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: $46,440,446

Exercised Options: $46,440,446

Current Obligation: $46,440,446

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821323D0002

IDV Type: IDC

Timeline