DoD awards Northrop Grumman $14.27M for Fire Control Systems, raising concerns about competition and value
Contract Overview
Contract Amount: $14,271,204 ($14.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2005-03-31
End Date: 2006-07-31
Contract Duration: 487 days
Daily Burn Rate: $29.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE
Sector: Defense
Official Description: 200507!000096!5700!FA8615!ASC/YPK !FA861504C6050 !A!N! !N! ! !20050331!20080229!091808832!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A NURSERY RD !LINTHICUM HEIG !MD!21090!47150!003!24!LINTHICUM HEIGHTS !ANNE ARUNDEL !MARYLAND !+000002580000!N!N!000040275711!1230!FIRE CONTROL SYSTEMS, COMPLETE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !20200930!B! ! !A! !D!N!V!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $14.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200507!000096!5700!FA8615!ASC/YPK !FA861504C6050 !A!N! !N! ! !20050331!20080229!091808832!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A NURSERY RD !LINTHICUM HEIG !MD!21090!47150!003!24!LINTHICUM HEIGHTS !ANNE… Key points: 1. Contract awarded to Northrop Grumman for $14.27M for Fire Control Systems. 2. The contract was not competed, raising questions about price discovery and potential overpayment. 3. The duration of the contract is 487 days, with an estimated cost of $14.27M. 4. The sector is Defense, specifically IT and electronics, with a focus on navigation and guidance systems.
Value Assessment
Rating: questionable
The contract's cost-plus-incentive structure, combined with a lack of competition, makes it difficult to assess value. The awarded amount of $14.27M for fire control systems needs further benchmarking against similar contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded on a limited competition basis, which can lead to higher prices due to reduced market pressure. The lack of full and open competition limits the government's ability to secure the best possible price.
Taxpayer Impact: The limited competition may result in taxpayers paying more than necessary for these fire control systems.
Public Impact
Taxpayers may be overpaying for critical defense equipment due to a lack of competitive bidding. The absence of competition could stifle innovation and lead to less advanced or more expensive solutions. Ensuring fair pricing and value for money in defense contracts is crucial for national security and fiscal responsibility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Potential for overpricing
Positive Signals
- Awarded to a known defense contractor
- Specific system identified
Sector Analysis
This contract falls within the Defense sector, specifically related to electronics and communication equipment for fire control systems. Spending in this area is critical for national security, but often involves complex, high-value procurements where competition can be challenging.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine small business participation.
Oversight & Accountability
The limited competition aspect of this award warrants further oversight to ensure fair pricing and prevent potential waste. The Defense Contract Management Agency's role in overseeing this contract is critical for accountability.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of full and open competition
- Cost-plus contract type
- Potential for price escalation
- Limited transparency on justification for sole-source/limited competition
- No clear indication of small business participation
Tags
search-detection-navigation-guidance-aer, department-of-defense, md, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200507!000096!5700!FA8615!ASC/YPK !FA861504C6050 !A!N! !N! ! !20050331!20080229!091808832!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A NURSERY RD !LINTHICUM HEIG !MD!21090!47150!003!24!LINTHICUM HEIGHTS !ANNE ARUNDEL !MARYLAND !+000002580000!N!N!000040275711!1230!FIRE CONTROL SYSTEMS, COMPLETE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !202
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 $14.3 million.
What is the period of performance?
Start: 2005-03-31. End: 2006-07-31.
What is the justification for limiting competition on this $14.27M fire control systems contract?
The justification for limited competition is not provided in the data. Typically, such justifications include reasons like urgent need, sole-source availability of the technology, or specific technical requirements that only one contractor can meet. Without this information, it's difficult to assess if the limitation was appropriate or if it led to a suboptimal price for the government.
How does the cost-plus-incentive pricing structure impact the risk of overspending for these fire control systems?
Cost-plus-incentive fee contracts allow the contractor to recover costs plus a fee that is adjusted based on performance against targets. This structure can shift some risk to the government, as the final price is not fixed. If targets are not well-defined or if costs escalate unexpectedly, the government may end up paying more than anticipated, especially without robust competition to drive down initial cost estimates.
What is the expected effectiveness of these fire control systems, and how was this assessed prior to award?
The data does not provide details on the expected effectiveness of the fire control systems or how this was assessed. Typically, effectiveness is evaluated through technical specifications, performance requirements, and testing protocols outlined in the contract. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' description suggests advanced capabilities, but specific performance metrics and their assessment are missing from this record.
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: FIRE CONTROL EQPT.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 1580A NURSERY RD, LINTHICUM HEIG, MD
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-03-31
Current End Date: 2006-07-31
Potential End Date: 2006-07-31 00:00:00
Last Modified: 2011-07-26
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