USSOCOM awards $784M contract to Northrop Grumman for rocket components, raising competition concerns
Contract Overview
Contract Amount: $32,875,661 ($32.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2005-08-01
End Date: 2008-05-30
Contract Duration: 1,033 days
Daily Burn Rate: $31.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200512!001384!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !H9222205C0020 !A!N! !N! ! !20050801!20051230!784127763!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A W NURSERY ROAD !LINTHICUM HEIG !MD!21090!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000006210238!N!N!000000002272!1340!ROCKETS, ROCKET AMMUNITION & ROCKET COMPS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !336419!E! !3!A!S! ! ! !20200930!B! ! !B! !B!N!U!1!001!N!5A!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $32.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200512!001384!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !H9222205C0020 !A!N! !N! ! !20050801!20051230!784127763!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A W NURSERY ROAD !LINTHICUM HEIG !MD!21090!37000!089!01!HUNTSVILLE !MADI… Key points: 1. Contract awarded to Northrop Grumman for rocket components. 2. Significant value of $784 million raises questions about cost-effectiveness. 3. Lack of competition (sole-source) may have inflated prices. 4. Sector: Defense - Other Guided Missile and Space Vehicle Parts Manufacturing.
Value Assessment
Rating: questionable
The contract value of $784 million for rocket components is substantial. Without competitive bidding, it's difficult to assess if this price is aligned with market rates for similar components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Taxpayers may be overpaying for critical rocket components due to the sole-source award. The defense sector's reliance on sole-source contracts can stifle innovation and increase costs. Lack of transparency in pricing for this contract makes public scrutiny difficult.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Lack of transparency in pricing
Positive Signals
- Awarded to a known defense contractor
- Contract supports critical defense capabilities
Sector Analysis
This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. Spending in this niche defense manufacturing area can be high, but competitive bidding is crucial to ensure value.
Small Business Impact
The contract was awarded to a large corporation, Northrop Grumman Systems Corporation. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the price paid was fair and reasonable, and to explore opportunities for future competition.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and potentially increases costs.
- High contract value raises concerns about price reasonableness.
- Lack of transparency in pricing due to sole-source nature.
- Potential for overpayment by taxpayers.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, md, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200512!001384!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !H9222205C0020 !A!N! !N! ! !20050801!20051230!784127763!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A W NURSERY ROAD !LINTHICUM HEIG !MD!21090!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000006210238!N!N!000000002272!1340!ROCKETS, ROCKET AMMUNITION & ROCKET COMPS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !336419!E! !3!A!S! ! ! !202
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $32.9 million.
What is the period of performance?
Start: 2005-08-01. End: 2008-05-30.
What specific rocket components were procured under this contract, and what is their criticality to USSOCOM operations?
The contract data indicates the procurement of 'ROCKETS, ROCKET AMMUNITION & ROCKET COMPS' and 'ELECTRONICS AND COMMUNICATION EQUIP'. These are likely critical components for missile systems and related support equipment used by USSOCOM. The exact nature and quantity would require deeper analysis of the contract's statement of work.
What justification was provided for awarding this contract on a sole-source basis instead of through full and open competition?
Sole-source awards typically require a justification, such as a lack of available sources, urgent and compelling needs, or specific proprietary technology. The justification for this $784 million contract would need to be reviewed to understand why competition was bypassed and if it was truly warranted.
How does the unit cost of these components compare to industry benchmarks, given the sole-source nature of the award?
Without competitive bidding, establishing a precise benchmark is challenging. However, sole-source contracts often carry a premium. A thorough cost analysis comparing the awarded price to similar components procured competitively, if available, would be necessary to assess potential overpayment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 03
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2005-08-01
Current End Date: 2008-05-30
Potential End Date: 2008-05-30 00:00:00
Last Modified: 2013-07-12
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