DoD awards $21.4M to Northrop Grumman for SIL and Cyber Support, with no competition
Contract Overview
Contract Amount: $21,383,865 ($21.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-12-06
End Date: 2022-12-31
Contract Duration: 1,121 days
Daily Burn Rate: $19.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SIL AND CYBER SUPPORT
Place of Performance
Location: MCCLELLAN, SACRAMENTO County, CALIFORNIA, 95652
Plain-Language Summary
Department of Defense obligated $21.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SIL AND CYBER SUPPORT Key points: 1. Significant contract value awarded to a single large defense contractor. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract spans over three years, indicating a substantial need for these services. 4. The sector is critical for national security, but the procurement method warrants scrutiny.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to assess value. Without benchmarks or competitive bids, it's hard to determine if the $21.4 million is a fair price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these SIL and Cyber support services, as there was no mechanism to ensure the lowest possible cost.
Public Impact
Taxpayers may be overpaying for critical cyber and navigation support due to a lack of competition. The Department of Defense relies on this contractor for essential systems, highlighting potential vendor lock-in. Future procurements in this area could be influenced by this sole-source award, potentially perpetuating non-competitive practices.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Critical defense service
- Long-term contract duration
Sector Analysis
This contract falls within the IT and Defense sectors, specifically related to navigation and guidance systems. Spending in this area is typically high due to national security requirements, but competitive procurement is crucial for efficiency.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large defense contractor. There is no indication that small businesses were involved in this specific sole-source award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award warrants closer oversight to ensure the government is receiving fair value. Accountability for the pricing and performance should be rigorously maintained by the Air Force.
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
- Potential for overpricing due to lack of competition.
- Risk of vendor lock-in for critical systems.
- Limited transparency in cost determination.
- Missed opportunity for small business participation.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SIL AND CYBER SUPPORT
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 $21.4 million.
What is the period of performance?
Start: 2019-12-06. End: 2022-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. Without competition, the Department of Defense must rely on detailed cost proposals and market research to ensure fair and reasonable pricing. The effectiveness of these measures in this specific case is questionable due to the lack of competitive pressure.
What are the risks associated with relying on a single contractor for critical SIL and Cyber support, especially given the contract's duration?
The primary risks include vendor lock-in, potential price escalation over time, and reduced incentive for innovation. If Northrop Grumman faces performance issues or significant price increases, the Air Force has limited alternatives, potentially impacting national security operations and increasing long-term costs.
How does the Cost Plus Fixed Fee structure impact the government's ability to control costs in this non-competed contract?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee is fixed, the total cost can still escalate if actual costs are higher than anticipated. In a sole-source scenario, this structure offers less cost control compared to fixed-price contracts awarded competitively.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 5441 LUCE AVE, MCCLELLAN, CA, 95652
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $21,383,865
Exercised Options: $21,383,865
Current Obligation: $21,383,865
Actual Outlays: $1,487,251
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862020D3025
IDV Type: IDC
Timeline
Start Date: 2019-12-06
Current End Date: 2022-12-31
Potential End Date: 2022-12-31 00:00:00
Last Modified: 2025-09-24
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