DoD's $7.1M Northrop Grumman Contract for Interim Contractor Support Raises Questions on Competition and Value
Contract Overview
Contract Amount: $7,086,678 ($7.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-01-14
End Date: 2026-05-31
Contract Duration: 502 days
Daily Burn Rate: $14.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: CY24 INTERIM CONTRACTOR SUPPORT (ICS)
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $7.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: CY24 INTERIM CONTRACTOR SUPPORT (ICS) Key points: 1. Contract awarded to Northrop Grumman for $7.1M for Interim Contractor Support (ICS). 2. The contract is for electronic component manufacturing, with no competition cited. 3. Potential risks include lack of competitive pricing and limited oversight. 4. The sector is 'Other Electronic Component Manufacturing', with a benchmark of $14,117 for this type of contract.
Value Assessment
Rating: questionable
The contract's total value is $7,086,678.39. Given the benchmark of $14,117 for similar contracts, this award appears significantly overvalued, suggesting potential inefficiencies or a lack of cost scrutiny.
Cost Per Unit: $14,117
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition and potentially inflated costs directly impact taxpayer funds, as a more competitive process could have secured better value.
Public Impact
Taxpayers may be overpaying for essential contractor support due to the absence of competitive bidding. The Department of Defense may not be receiving the best possible value for its investment in electronic component manufacturing. Lack of transparency in the sole-source award process can erode public trust in government procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High value relative to benchmark
- Lack of competition
- Potential for cost overruns
Positive Signals
- Contract supports critical defense needs
- Clear contract duration and end date
Sector Analysis
This contract falls under 'Other Electronic Component Manufacturing'. The benchmark price of $14,117 suggests that typical contracts in this sub-sector are significantly smaller, making this award's value notable.
Small Business Impact
There is no indication that small businesses were involved in this procurement, as it was a sole-source award to a large corporation.
Oversight & Accountability
The 'IL' status suggests Illinois is the location, but specific oversight mechanisms for this sole-source contract are not detailed. Further review is needed to ensure accountability.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in award process
- High contract value compared to benchmark
- Unclear justification for sole-source award
Tags
other-electronic-component-manufacturing, department-of-defense, il, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. CY24 INTERIM CONTRACTOR SUPPORT (ICS)
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 $7.1 million.
What is the period of performance?
Start: 2025-01-14. End: 2026-05-31.
What justification was provided for awarding this contract on a sole-source basis, and how does it align with federal procurement regulations for non-competitive awards?
Federal regulations permit sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services. The justification would need to detail why Northrop Grumman was the only viable option and why competition was not feasible or practicable. This ensures that such awards are exceptions, not the norm, and are made only when truly necessary to meet government requirements.
How was the 'COST PLUS FIXED FEE' pricing structure determined, and what controls are in place to manage costs and prevent overruns, especially given the high value and lack of competition?
Cost Plus Fixed Fee (CPFF) contracts allow the contractor to recover allowable costs plus a fixed fee representing profit. Controls typically include detailed cost accounting standards, regular audits, and negotiation of the fee based on complexity and risk. For this contract, given its sole-source nature and high value, robust oversight and stringent cost monitoring by the Air Force are crucial to ensure the fixed fee remains reasonable and that costs are controlled effectively.
What is the specific nature of the 'Interim Contractor Support' (ICS) being provided, and why is it necessary to award such a substantial contract without competition?
Interim Contractor Support (ICS) often refers to services needed to bridge a gap, such as maintaining systems or providing specialized support while a permanent solution is developed or procured. The necessity for a sole-source award for ICS would typically stem from urgent requirements, unique expertise held by a single contractor, or situations where transitioning support would be more costly or disruptive than continuing with the incumbent. The specific nature of the support and the rationale for its urgency are key to understanding the procurement decision.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
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: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $7,866,279
Exercised Options: $7,866,279
Current Obligation: $7,086,678
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA863819D0001
IDV Type: IDC
Timeline
Start Date: 2025-01-14
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2025-12-22
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