DoD awards $75M to Northrop Grumman for LITENING Pod logistics, a sole-source contract
Contract Overview
Contract Amount: $75,190,797 ($75.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-12-31
End Date: 2022-03-31
Contract Duration: 1,551 days
Daily Burn Rate: $48.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CONTRACTOR LOGISTICS SUPPORT FOR LITENING TARGETING POD
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $75.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: CONTRACTOR LOGISTICS SUPPORT FOR LITENING TARGETING POD Key points: 1. High contract value ($75M) for specialized logistics support. 2. Sole-source award to Northrop Grumman, limiting competitive pricing. 3. Long contract duration (over 4 years) may impact cost-effectiveness. 4. Engineering services sector, often with high barriers to entry.
Value Assessment
Rating: questionable
The contract value of $75M for logistics support is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.
Taxpayer Impact: The lack of competition in this sole-source award raises concerns about potential overspending of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. Reliance on a single contractor for critical logistics could pose supply chain risks. The long-term nature of the contract may not reflect current market efficiencies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Long contract duration
Positive Signals
- Established contractor with proven capabilities
Sector Analysis
This contract falls within the Engineering Services sector, specifically related to defense systems. Spending in this area is often characterized by specialized knowledge and high R&D costs, but competitive bidding is crucial for efficiency.
Small Business Impact
The contract was not awarded to a small business, and there is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
Oversight is provided by the Defense Contract Management Agency. However, the sole-source nature of the award limits the agency's ability to ensure competitive pricing.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited oversight on price reasonableness
- Vendor lock-in risk
Tags
engineering-services, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. CONTRACTOR LOGISTICS SUPPORT FOR LITENING TARGETING POD
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $75.2 million.
What is the period of performance?
Start: 2017-12-31. End: 2022-03-31.
What is the justification for the sole-source award, and how does it ensure value for money?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. However, without this justification, it's challenging to assess if the $75M price truly represents value for money compared to what could be achieved through competition.
What are the risks associated with relying on a single contractor for logistics support of critical defense equipment?
The primary risks include potential supply chain disruptions if the contractor faces operational issues, lack of innovation due to absence of competitive pressure, and the possibility of escalating costs over time. This sole-source arrangement could also create vendor lock-in, making future transitions more difficult and expensive.
How effective is the current pricing structure in ensuring cost-efficiency for the taxpayer over the contract's duration?
The effectiveness of the pricing structure is questionable due to the sole-source nature of the award. A firm fixed-price contract provides cost certainty, but without competition, there's no external benchmark to validate if the fixed price is reasonable or if taxpayers are overpaying for the services rendered.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $75,323,343
Exercised Options: $75,323,343
Current Obligation: $75,190,797
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852313D0002
IDV Type: IDC
Timeline
Start Date: 2017-12-31
Current End Date: 2022-03-31
Potential End Date: 2022-03-31 00:00:00
Last Modified: 2021-12-17
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