DoD Awards Northrop Grumman $213.8M for VTUAV LRIP I, Extending Through November 2024

Contract Overview

Contract Amount: $213,843,216 ($213.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-06-21

End Date: 2024-11-29

Contract Duration: 6,371 days

Daily Burn Rate: $33.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: VTUAV LRIP I

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92150

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $213.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: VTUAV LRIP I Key points: 1. Significant contract value of $213.8 million awarded to a single large defense contractor. 2. Limited competition is evident, with the contract type being 'NOT COMPETED'. 3. Potential risks include lack of competitive pricing and reliance on a sole provider. 4. The sector is Aircraft Manufacturing, a key area for defense spending.

Value Assessment

Rating: fair

The contract value is substantial, but without competitive benchmarks, assessing its value for money is difficult. The fixed-price incentive structure aims to control costs, but the lack of competition limits price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits the government's ability to leverage market competition to achieve the best possible prices and terms.

Taxpayer Impact: The lack of competition may result in higher costs for taxpayers compared to a competitively awarded contract.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long duration of the contract (over 17 years) raises questions about ongoing cost-effectiveness. Dependence on a single contractor for this capability could pose supply chain risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
Sole-source award

Positive Signals

Definitive contract type
Fixed Price Incentive pricing

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, which is a significant component of defense spending. Benchmarks for similar unmanned aerial vehicle (UAV) development and production contracts would be needed for a precise comparison.

Small Business Impact

The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no indication of small business participation in the provided data.

Oversight & Accountability

The contract's long duration and sole-source nature warrant close oversight to ensure continued cost-effectiveness and performance. Regular reviews of contract modifications and pricing are essential.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive pricing
Potential for cost overruns without strong oversight
Long-term reliance on a single supplier
Limited transparency due to sole-source nature

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $213.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. VTUAV LRIP I

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 Navy).

What is the total obligated amount?

The obligated amount is $213.8 million.

What is the period of performance?

Start: 2007-06-21. End: 2024-11-29.

What is the rationale for the sole-source award of this significant defense contract?

The rationale for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternative sources. For the VTUAV LRIP I, it might stem from specific technological requirements or the developmental stage of the unmanned system, where only one contractor possessed the necessary expertise or intellectual property to fulfill the contract's objectives efficiently.

How does the fixed-price incentive structure mitigate risks in a sole-source environment?

The Fixed Price Incentive (FPI) structure aims to share cost risks between the government and the contractor. It establishes target costs, target profits, and price ceilings. If the contractor achieves lower costs than the target, both parties share in the savings. Conversely, if costs exceed the target, the contractor bears a larger portion of the overrun up to the ceiling, incentivizing cost control despite the lack of competition.

What is the long-term strategic value of this contract for the Department of the Navy?

The long-term strategic value likely lies in developing and fielding a critical unmanned aerial vehicle capability. The VTUAV program could enhance intelligence, surveillance, reconnaissance, and strike capabilities, providing the Navy with advanced operational flexibility. The sustained award suggests a commitment to this platform's integration into naval operations over an extended period.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001907R0015

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 17066 GOLDENTOP RD., SAN DIEGO, CA, 92127

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $213,843,216

Exercised Options: $213,843,216

Current Obligation: $213,843,216

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline