Northrop Grumman awarded $38.4M for BLU-111 ECP Production 1, a key component in munitions manufacturing

Contract Overview

Contract Amount: $38,360,000 ($38.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-06-30

End Date: 2023-12-29

Contract Duration: 547 days

Daily Burn Rate: $70.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BLU-111 ECP PRODUCTION 1

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24141

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: BLU-111 ECP PRODUCTION 1 Key points: 1. Contract value of $38.4 million represents a significant investment in defense readiness. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. Potential risk indicators include the firm-fixed-price contract type, which shifts cost overrun risk to the contractor. 4. Performance context is within ammunition manufacturing, a critical sector for military operations. 5. This contract positions Northrop Grumman as a key supplier within the defense industrial base. 6. The duration of 547 days indicates a substantial production or development effort.

Value Assessment

Rating: good

The contract value of $38.4 million for BLU-111 ECP Production 1 appears reasonable given the nature of defense manufacturing. Benchmarking against similar complex munitions production contracts would provide further insight, but the firm-fixed-price structure suggests an effort to control costs. The award to a major defense contractor like Northrop Grumman is typical for this type of specialized production.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. With 8 bidders participating, this suggests a healthy level of competition for this defense contract. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down the final price and ensured the government received competitive offers for the required munitions components.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Air Force, ensuring the availability of critical munitions. The services delivered involve the production of BLU-111 ECP, a component essential for certain types of bombs. The geographic impact is primarily within the United States, supporting domestic defense manufacturing capabilities. Workforce implications include employment opportunities at Northrop Grumman and its supply chain partners within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in complex defense manufacturing projects.
Reliance on a single prime contractor for critical component production.
Fluctuations in raw material costs could impact the firm-fixed-price contract.
Ensuring consistent quality control throughout the production run.

Positive Signals

Awarded under full and open competition, indicating strong market interest.
Firm-fixed-price contract type helps manage cost certainty for the government.
Northrop Grumman is an established defense contractor with a track record in munitions.
The contract duration suggests a well-defined scope of work.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for such components is dominated by a few large, specialized defense contractors. Spending in this area is driven by national security requirements and military readiness objectives. Comparable spending benchmarks would involve looking at other large-scale production contracts for munitions or weapon systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors within its supply chain. The extent of small business subcontracting would depend on Northrop Grumman's internal policies and the specific requirements of the BLU-111 ECP production.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering the specified product within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific production details may be sensitive.

Related Government Programs

Air-to-Ground Munitions
Guided Bomb Units
Defense Production Act Investments
Northrop Grumman Defense Contracts
Ammunition Manufacturing Contracts

Risk Flags

Potential for cost overruns if not managed tightly under FFP.
Supply chain disruptions impacting production timelines.
Quality control issues in mass production.
Dependence on specific raw material availability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. BLU-111 ECP PRODUCTION 1

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 $38.4 million.

What is the period of performance?

Start: 2022-06-30. End: 2023-12-29.

What is the specific role and significance of the BLU-111 ECP in the Air Force's arsenal?

The BLU-111 is a general-purpose bomb casing, and the 'ECP' likely refers to an Engineering Change Proposal or enhancement. It serves as a fundamental component for various air-to-ground munitions, particularly those that are unguided or can be adapted for precision guidance kits. Its significance lies in providing a robust and reliable platform for delivering explosive payloads, contributing to the Air Force's capability to engage ground targets. The 'Production 1' designation suggests this is an initial or early phase of manufacturing for this specific variant or enhancement, crucial for replenishing stocks or fielding updated munitions.

How does the firm-fixed-price contract type impact the government's financial risk compared to other contract types?

A firm-fixed-price (FFP) contract shifts the majority of financial risk to the contractor. Unlike cost-plus contracts, where the government reimburses the contractor for allowable costs plus a fee, an FFP contract establishes a single, final price for the goods or services. This means that if the contractor's costs exceed the agreed-upon price due to inefficiencies, poor planning, or unforeseen issues, the contractor absorbs those additional costs. For the government, this provides significant cost certainty and predictability, making budgeting easier. However, it can also incentivize contractors to cut corners on quality if not properly monitored, and may lead to higher initial bid prices to account for the contractor's risk premium.

What is Northrop Grumman's historical performance and experience with similar munitions production contracts?

Northrop Grumman is a major defense contractor with extensive experience in aerospace and defense manufacturing, including munitions. They have a long history of producing various types of bombs, missiles, and other ordnance for the U.S. military and allied nations. Their portfolio includes involvement in programs like the B-2 bomber, various missile systems, and components for other weapon platforms. While specific performance metrics for every contract are not publicly detailed, their sustained position as a prime contractor indicates a generally reliable track record in delivering complex defense systems and components, often under stringent quality and schedule requirements.

What are the potential implications of this contract on the broader defense industrial base and supply chain?

This contract for BLU-111 ECP Production 1 has several implications for the defense industrial base. Firstly, it supports the continued operation and capacity of Northrop Grumman's manufacturing facilities, potentially preserving specialized skills and infrastructure. Secondly, it generates demand for raw materials, components, and sub-assemblies from a network of suppliers, many of which may be small or medium-sized businesses. This ripple effect helps sustain the broader defense supply chain. The award also reinforces the importance of domestic production capabilities for critical munitions, reducing reliance on foreign sources and contributing to national security resilience.

How does the number of bidders (8) influence the potential value and efficiency of this contract for the government?

Having eight bidders for this contract is a strong indicator of robust competition. A higher number of bidders generally leads to more competitive pricing as companies vie for the award. It suggests that the market for this type of munitions component is sufficiently large and accessible to multiple capable firms. This increased competition can drive down costs for the government, improve the quality of proposals received, and encourage innovation. Furthermore, it provides the government with a wider range of options and reduces the risk of being dependent on a single supplier, potentially leading to better overall value and efficiency in fulfilling the requirement.

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: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 415 CONSTITUTION RD BLDG 229, RADFORD, VA, 24141

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: $38,360,000

Exercised Options: $38,360,000

Current Obligation: $38,360,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865622DA002

IDV Type: IDC

Timeline