DoD's $22.4M Contract for SAUDI HOS with Northrop Grumman Raises Questions on Competition and Value
Contract Overview
Contract Amount: $22,377,871 ($22.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2008-03-28
End Date: 2017-07-30
Contract Duration: 3,411 days
Daily Burn Rate: $6.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: SAUDI HOS
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $22.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SAUDI HOS Key points: 1. Significant spending on 'Other Electronic Component Manufacturing' without clear justification. 2. Lack of competition suggests potential for inflated pricing and reduced value. 3. Long contract duration (2008-2017) with a firm fixed price may not reflect current market conditions. 4. Limited transparency on the specific components and their necessity for the Air Force. 5. The 'Other Electronic Component Manufacturing' NAICS code is broad, lacking specific detail.
Value Assessment
Rating: questionable
The total award of $22.4 million over a long period lacks specific per-unit cost data for benchmarking. Without detailed breakdowns or comparison to similar procurements, assessing the value for money is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited competition award. This significantly restricts price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competitive bidding likely resulted in higher prices than could have been achieved through an open market process, impacting taxpayer funds.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding on this substantial contract. The long duration of the contract raises concerns about whether the technology or components remained relevant and cost-effective throughout its lifespan. Lack of detailed public information hinders the ability to understand the necessity and specific use of these 'Other Electronic Components'.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Limited Transparency
- Broad NAICS Code
- Long Contract Duration
Positive Signals
- Firm Fixed Price contract type can offer cost certainty if negotiated well.
Sector Analysis
The 'Other Electronic Component Manufacturing' sector is vast and can encompass a wide range of products. Without more specificity, it's hard to benchmark against industry standards. DoD spending in this area can be critical for national security but requires rigorous oversight.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation in this specific award, which is a missed opportunity for economic inclusion.
Oversight & Accountability
The 'IL' status code suggests the contract was awarded in Illinois. Further oversight would involve examining the justification for limited competition and ensuring proper documentation and approval processes were followed by the contracting agency.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition raises concerns about potential overpricing.
- Broad NAICS code obscures the specific nature and value of the procurement.
- Long contract duration may indicate outdated technology or inflated costs over time.
- Limited transparency hinders public understanding and accountability.
- No indication of small business participation.
Tags
other-electronic-component-manufacturing, department-of-defense, il, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SAUDI HOS
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 $22.4 million.
What is the period of performance?
Start: 2008-03-28. End: 2017-07-30.
What specific electronic components were procured under this contract, and what was their intended use by the Air Force?
The provided data lacks specificity regarding the exact electronic components. The NAICS code 'Other Electronic Component Manufacturing' is very broad. Understanding the specific items and their critical function within Air Force systems is essential to assess if the $22.4 million expenditure was justified and represented fair market value.
What was the justification for awarding this contract on a limited or sole-source basis, and were alternatives explored?
The data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source or limited competition justification. Without this justification, it's impossible to assess if competitive alternatives were genuinely unavailable or if the process was flawed, potentially leading to inflated costs and reduced taxpayer value.
How does the $22.4 million total award compare to industry benchmarks for similar electronic components, considering the contract's long duration?
Benchmarking is challenging due to the broad NAICS code and lack of specific component details. The contract spanned nearly a decade (2008-2017). Without knowing the specific items, it's difficult to compare pricing against market trends or similar procurements, making it hard to determine if the government received good value over time.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
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
Financial Breakdown
Contract Ceiling: $22,377,871
Exercised Options: $22,377,871
Current Obligation: $22,377,871
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-03-28
Current End Date: 2017-07-30
Potential End Date: 2022-12-31 00:00:00
Last Modified: 2022-07-08
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)