DoD Awards Northrop Grumman $41.2M for NATO Maritime Mode Integration, Lacking Competition
Contract Overview
Contract Amount: $41,223,507 ($41.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2020-09-23
End Date: 2025-08-31
Contract Duration: 1,803 days
Daily Burn Rate: $22.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: NORTHA ATLANTIC TREATY ORGANIZATION MARITIME MODE INTEGRATIION
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $41.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: NORTHA ATLANTIC TREATY ORGANIZATION MARITIME MODE INTEGRATIION Key points: 1. Significant contract value of $41.2 million awarded to a single large contractor. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract is for Aircraft Manufacturing, specifically for NATO maritime integration. 4. Long performance period of 1803 days suggests a complex, ongoing requirement.
Value Assessment
Rating: questionable
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed tightly. Without competitive benchmarks, assessing the fairness of the pricing is difficult.
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 may result in higher costs for the government compared to a competitive process.
Taxpayer Impact: The lack of competition could lead to taxpayers paying more than necessary for this critical NATO integration capability.
Public Impact
Impacts NATO's maritime surveillance and communication capabilities. Potential for increased costs due to non-competitive award. Affects the defense industrial base by awarding to a single large entity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long performance period
Positive Signals
- Supports critical NATO capability
- Awarded to established defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is often characterized by high R&D costs and long procurement cycles, making competition crucial for cost control.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure cost reasonableness and effective performance. The Department of the Air Force should monitor expenditures closely.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competitive pressure.
- Cost-plus contract type can lead to cost escalation.
- Long duration may obscure initial cost estimates.
- Potential for contractor to prioritize profit over efficiency.
- Limited transparency on specific NATO integration requirements.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. NORTHA ATLANTIC TREATY ORGANIZATION MARITIME MODE INTEGRATIION
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 $41.2 million.
What is the period of performance?
Start: 2020-09-23. End: 2025-08-31.
What is the justification for not competing this significant contract, and what steps are being taken to ensure value for money?
The justification for a sole-source award is typically based on unique capabilities or urgent needs. However, without a competitive process, it is imperative for the Department of Defense to conduct rigorous price analysis and performance monitoring to mitigate risks of overpayment and ensure the delivered capability meets NATO's requirements effectively.
What are the specific risks associated with a Cost Plus Incentive Fee contract awarded without competition?
The primary risks include potential cost overruns, as the contractor is reimbursed for costs plus a fee, and reduced incentive for efficiency if the incentive structure is not robust. Without competition, there's no market pressure to drive down costs or encourage innovation, increasing the likelihood of paying a premium for the service.
How will the effectiveness of the NATO Maritime Mode Integration be measured, and what are the key performance indicators?
Effectiveness will likely be measured against specific NATO operational requirements and interoperability standards. Key performance indicators could include successful data exchange rates, system uptime, response times for maritime threats, and successful integration with existing NATO communication networks. Regular testing and operational assessments will be crucial.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $41,286,967
Exercised Options: $41,286,967
Current Obligation: $41,223,507
Subaward Activity
Number of Subawards: 41
Total Subaward Amount: $11,517,319
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862015D3009
IDV Type: IDC
Timeline
Start Date: 2020-09-23
Current End Date: 2025-08-31
Potential End Date: 2025-08-31 00:00:00
Last Modified: 2025-07-24
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