Air Force awards Northrop Grumman $52M contract for ammunition manufacturing capacity enhancement
Contract Overview
Contract Amount: $51,963,562 ($52.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-01-01
End Date: 2027-12-31
Contract Duration: 1,094 days
Daily Burn Rate: $47.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MANUFACTURING CAPACITY ENHANCEMENT - HACM ABPS
Place of Performance
Location: ELKTON, CECIL County, MARYLAND, 21921
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $52.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MANUFACTURING CAPACITY ENHANCEMENT - HACM ABPS Key points: 1. Contract aims to bolster domestic manufacturing capabilities for critical defense components. 2. Focus on enhancing production capacity for ammunition, excluding small arms. 3. Long-term contract duration of nearly three years suggests sustained demand. 4. Fixed-price contract type aims to control costs for the government. 5. Awarded by the Department of the Air Force, indicating a specific service need. 6. Geographic focus on Maryland for manufacturing operations.
Value Assessment
Rating: good
The contract value of $51.96 million over approximately three years appears reasonable for enhancing manufacturing capacity. Benchmarking against similar large-scale industrial enhancement contracts is difficult without more specific details on the scope of 'capacity enhancement.' However, the firm-fixed-price structure provides cost certainty. The base award value of $4.75 million for initial work suggests a phased approach to capacity build-up, which is a common and prudent strategy for such investments.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and innovation. The fact that Northrop Grumman was selected suggests they offered the most advantageous proposal based on the criteria set forth in the solicitation. The number of bidders is not specified, but the 'full and open' designation is a positive indicator for competitive pricing.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging a wider pool of suppliers to participate, leading to potentially more efficient use of public funds.
Public Impact
The primary beneficiaries are the Department of Defense and specifically the Air Force, ensuring readiness and supply chain resilience. The contract will enhance the domestic manufacturing capacity for essential ammunition components. Manufacturing activities are expected to take place in Maryland, potentially creating or sustaining jobs in the region. This investment supports the broader national security objective of maintaining a robust defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen manufacturing challenges arise.
- Dependence on a single contractor for critical capacity enhancement.
- Risk of technological obsolescence if manufacturing processes are not adaptable.
Positive Signals
- Firm-fixed-price contract mitigates cost escalation risks.
- Enhancing domestic capacity reduces reliance on foreign supply chains.
- Long-term contract provides stability for manufacturing investment.
Sector Analysis
This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on ordnance and ammunition production. The defense industrial base is a critical component of national security, and investments in manufacturing capacity are crucial for maintaining readiness and responding to geopolitical demands. Comparable spending benchmarks would typically involve large-scale capital investments in production facilities and advanced manufacturing technologies, often in the hundreds of millions or billions for major programs.
Small Business Impact
The provided data indicates that small business participation (sb: false) and set-asides (ss: false) were not primary considerations for this specific award. This suggests the contract was not directly aimed at small business development. However, the prime contractor, Northrop Grumman, may engage small businesses as subcontractors for specialized components or services, which could indirectly benefit the small business ecosystem. Further analysis would be needed to determine the extent of any subcontracting plans.
Oversight & Accountability
The contract is subject to standard Department of Defense oversight mechanisms, including contract administration by the Air Force and potential review by the Government Accountability Office (GAO) and the Inspector General. The firm-fixed-price nature of the contract provides a degree of financial oversight by limiting the government's liability to the agreed-upon price. Transparency is generally maintained through contract award databases, though specific operational details of the capacity enhancement may be sensitive.
Related Government Programs
- Defense Production Act Investments
- Ammunition Production Programs
- Industrial Base Modernization Initiatives
- Air Force Munitions Procurement
- Northrop Grumman Defense Contracts
Risk Flags
- Potential for supply chain disruptions impacting raw material availability.
- Risk of cost escalation if unforeseen technical challenges arise during capacity build-up.
- Dependence on a single contractor for critical manufacturing capability.
Tags
defense, ammunition-manufacturing, northrop-grumman, department-of-the-air-force, maryland, full-and-open-competition, firm-fixed-price, manufacturing-capacity, ordnance, national-security, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $52.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MANUFACTURING CAPACITY ENHANCEMENT - HACM ABPS
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 $52.0 million.
What is the period of performance?
Start: 2025-01-01. End: 2027-12-31.
What specific types of ammunition will this contract enhance production for, beyond the general classification of 'Ammunition (except Small Arms)'?
The provided data classifies the North American Industry Classification System (NAICS) code as 332993, which pertains to 'Ammunition (except Small Arms) Manufacturing.' This broad category typically includes artillery shells, mortar rounds, tank rounds, and related ordnance components, but excludes small arms ammunition like bullets for rifles or pistols. Without further details from the contract solicitation or award documents, the precise types and calibers of ammunition are not specified. However, the focus on 'manufacturing capacity enhancement' suggests an effort to increase the volume, efficiency, or resilience of production lines for existing or anticipated demand within these categories.
How does the awarded amount of $51.96 million compare to historical spending on similar manufacturing capacity enhancement projects by the Department of Defense?
Directly comparing this $51.96 million award to historical spending on 'manufacturing capacity enhancement' is challenging without a precise definition of what constitutes such a project and access to comprehensive historical spending data across all defense agencies. However, this figure represents a significant investment for a single contract focused on a specific manufacturing capability. Large-scale industrial base initiatives, especially those involving new facilities or major upgrades, can range from tens of millions to billions of dollars. This award appears to be a substantial, but not unprecedented, investment aimed at bolstering a critical defense supply chain component, likely focused on specific production lines or technologies rather than a complete overhaul of a major facility.
What are the key performance indicators (KPIs) or metrics used to assess the success of this 'manufacturing capacity enhancement' contract?
The contract documents would typically outline specific Key Performance Indicators (KPIs) to measure the success of the manufacturing capacity enhancement. These could include metrics such as: increased production output (units per day/month), reduced lead times for production, improved manufacturing efficiency (e.g., reduced waste, lower energy consumption per unit), successful implementation of new technologies or processes, adherence to quality control standards, and timely completion of capacity expansion milestones. For a firm-fixed-price contract, meeting delivery schedules and production targets within the agreed budget would be paramount. The government would likely monitor these KPIs through regular reporting from Northrop Grumman and potentially through site visits or audits.
What is Northrop Grumman's track record in fulfilling similar large-scale manufacturing or defense production contracts?
Northrop Grumman is a major defense contractor with extensive experience in large-scale manufacturing and production across various defense platforms, including aerospace, naval systems, and munitions. They have a long history of managing complex production lines and supply chains for the U.S. military. While specific details of past 'manufacturing capacity enhancement' contracts are not provided here, the company regularly undertakes programs involving significant capital investment, technological integration, and high-volume production. Their track record generally includes successful delivery on major defense programs, though like any large contractor, they may have faced challenges or scrutiny on specific projects. Their established presence and capabilities make them a logical choice for such a critical enhancement.
Are there any specific risks associated with enhancing manufacturing capacity for ammunition, such as safety or environmental concerns?
Yes, enhancing manufacturing capacity for ammunition inherently involves specific risks. Safety is paramount due to the explosive nature of the materials handled; stringent safety protocols, specialized facilities, and highly trained personnel are required to mitigate risks of accidental detonation, fires, or exposure to hazardous substances. Environmental concerns are also significant, including the management of chemical waste, emissions, and potential soil or water contamination from manufacturing processes. Compliance with environmental regulations (e.g., EPA standards) is critical. Furthermore, the security of manufacturing facilities and the materials themselves is a major concern to prevent theft or misuse. The government and the contractor must implement robust security measures and adhere to all relevant safety and environmental regulations.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 9401 CORBIN AVE, NORTHRIDGE, CA, 91324
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: $51,963,562
Exercised Options: $51,963,562
Current Obligation: $51,963,562
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $22,791,183
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA865621DA014
IDV Type: IDC
Timeline
Start Date: 2025-01-01
Current End Date: 2027-12-31
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2025-02-06
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