DoD Awards Northrop Grumman $173.8M for EGI Navigation Systems, Facing Limited Competition
Contract Overview
Contract Amount: $17,380,491 ($17.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-03-09
End Date: 2026-09-30
Contract Duration: 1,301 days
Daily Burn Rate: $13.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EMBEDDED GLOBAL POSITIONING SYSTEM/INERTIAL NAVIGATION SYSTEM (EGI), LN-260 PRODUCTION (FMS)
Place of Performance
Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $17.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: EMBEDDED GLOBAL POSITIONING SYSTEM/INERTIAL NAVIGATION SYSTEM (EGI), LN-260 PRODUCTION (FMS) Key points: 1. Significant contract value for critical navigation technology. 2. Northrop Grumman is a key player in the defense navigation sector. 3. Limited competition raises questions about price discovery and potential overspending. 4. The IT and Defense sectors are heavily reliant on such advanced systems.
Value Assessment
Rating: fair
The $173.8 million award for EGI systems appears to be a standard price for this type of specialized equipment, but without competitive bidding, it's difficult to ascertain if it represents the best value. Benchmarking against similar sole-source or limited-competition contracts would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a limited competition environment. This approach can lead to higher prices and reduced innovation as there is less pressure on the contractor to offer the most competitive terms. The lack of a competitive process limits the government's ability to ensure optimal price discovery.
Taxpayer Impact: The absence of full and open competition may result in taxpayers paying a premium for these essential navigation systems, as the government may not be securing the lowest possible price.
Public Impact
Ensures continued operational capability for critical Air Force navigation systems. Supports advanced military operations requiring precise positioning and guidance. Potential for increased costs due to lack of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns
- Sole-source nature of award
Positive Signals
- Essential technology for national security
- Long-term contract duration
- Experienced contractor
Sector Analysis
The Department of Defense's reliance on specialized navigation systems like EGI highlights the critical role of the IT and Defense sectors in national security. Spending benchmarks for similar advanced navigation systems can vary widely, but typically involve significant investment due to R&D and specialized manufacturing requirements.
Small Business Impact
This contract was awarded to Northrop Grumman Systems Corporation, a large defense contractor. There is no indication of small business participation in this specific award, suggesting that opportunities for small businesses may be limited in this particular procurement.
Oversight & Accountability
The Department of the Air Force is responsible for overseeing this contract. Given the limited competition, robust oversight is crucial to ensure the contractor meets performance requirements and that costs remain justified throughout the contract's duration.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Limited competition
- Potential for cost overruns
- Lack of transparency in pricing
- Sole-source award
Tags
search-detection-navigation-guidance-aer, department-of-defense, ut, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. EMBEDDED GLOBAL POSITIONING SYSTEM/INERTIAL NAVIGATION SYSTEM (EGI), LN-260 PRODUCTION (FMS)
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 Air Force).
What is the total obligated amount?
The obligated amount is $17.4 million.
What is the period of performance?
Start: 2023-03-09. End: 2026-09-30.
What is the justification for not competing this contract, and what steps are being taken to ensure fair pricing?
The justification for not competing this contract is not explicitly stated in the provided data. However, limited competition often arises from specialized requirements or existing sole-source relationships. To ensure fair pricing, the agency should conduct thorough market research, negotiate aggressively, and potentially explore future competitive strategies to mitigate long-term cost increases.
What are the primary risks associated with awarding this contract without full and open competition?
The primary risks include potential overpayment due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the pricing structure. This can lead to suboptimal use of taxpayer funds and potentially hinder the adoption of more advanced or cost-effective solutions in the future.
How does the lack of competition impact the long-term effectiveness and cost of EGI systems for the Department of Defense?
The lack of competition can lead to higher unit costs over the contract's life, potentially limiting the number of systems procured or diverting funds from other critical areas. It may also slow down the integration of next-generation technologies if the incumbent contractor faces less pressure to upgrade or if alternative solutions are not explored.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA854018R0012
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 91367
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: $17,380,491
Exercised Options: $17,380,491
Current Obligation: $17,380,491
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $-28,460
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA857619D0001
IDV Type: IDC
Timeline
Start Date: 2023-03-09
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-08-01
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