Navy Processor Upgrade Contract Awarded to Northrop Grumman for $62M, Lacking Competition
Contract Overview
Contract Amount: $61,980,848 ($62.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-03-27
End Date: 2024-11-29
Contract Duration: 2,439 days
Daily Burn Rate: $25.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NAVY PROCESSOR UPGRADE AND CIRCM INTEGRATION
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $62.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: NAVY PROCESSOR UPGRADE AND CIRCM INTEGRATION Key points: 1. Significant contract value of $61.98M for processor upgrades and CIRCM integration. 2. Sole-source award to Northrop Grumman suggests limited market competition. 3. Potential risk associated with a cost-plus fixed-fee contract type. 4. Spending falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector.
Value Assessment
Rating: fair
The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs if not managed carefully. Benchmarking against similar processor upgrade contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and may result in higher costs for the government.
Taxpayer Impact: The absence of competition for this $62M contract raises concerns about taxpayer value, as alternative, potentially lower-cost solutions may not have been explored.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The Navy's reliance on a single vendor for critical upgrades could pose long-term supply chain risks. The use of a CPFF contract type warrants close monitoring to ensure cost efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Critical system upgrade
- Long-term contract duration
Sector Analysis
This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is often driven by defense modernization efforts and specialized technological requirements, which can limit the number of capable contractors.
Small Business Impact
The contract data indicates that small businesses were not involved in this specific award, as it was a sole-source procurement with a large, established contractor.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure cost controls and performance meet expectations. Transparency in the justification for not competing is crucial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency on justification for sole-source award
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $62.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. NAVY PROCESSOR UPGRADE AND CIRCM INTEGRATION
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 $62.0 million.
What is the period of performance?
Start: 2018-03-27. End: 2024-11-29.
What was the justification for awarding this contract on a sole-source basis, and were any market research efforts conducted to identify potential competitors?
The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source award. A thorough review of the contract file would be necessary to ascertain the specific justification, such as unique capabilities or urgent requirements. Market research is typically required even for sole-source procurements to confirm the lack of alternatives.
How does the cost-plus fixed fee structure impact the government's ability to control spending on this processor upgrade, especially given the long duration?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee is fixed, the total cost can fluctuate significantly based on actual expenses. This structure places a greater burden on the government to meticulously monitor and audit costs to prevent overruns and ensure efficiency throughout the 2439-day period of performance.
What are the potential risks associated with integrating CIRCM (Common Infrared Countermeasures) with upgraded processors, and how is Northrop Grumman managing these risks?
Integrating complex systems like CIRCM with upgraded processors carries inherent technical risks, including compatibility issues, performance degradation, and cybersecurity vulnerabilities. The government's oversight should focus on Northrop Grumman's risk mitigation strategies, testing protocols, and contingency plans to ensure successful integration and operational effectiveness of the upgraded systems.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001914R0023
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $81,361,512
Exercised Options: $62,182,213
Current Obligation: $61,980,848
Actual Outlays: $7,507,911
Subaward Activity
Number of Subawards: 34
Total Subaward Amount: $11,679,976
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001915G0026
IDV Type: BOA
Timeline
Start Date: 2018-03-27
Current End Date: 2024-11-29
Potential End Date: 2024-11-29 00:00:00
Last Modified: 2025-09-29
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