DoD's $365M FY19 Undefinitized Contract to Northrop Grumman for Navigation Systems Lacks Competition
Contract Overview
Contract Amount: $364,797,792 ($364.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-04-30
End Date: 2023-12-29
Contract Duration: 1,704 days
Daily Burn Rate: $214.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: FY19 PRODUCTION UNDEFINITIZED CONTRACT ACTION (UCA)
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $364.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: FY19 PRODUCTION UNDEFINITIZED CONTRACT ACTION (UCA) Key points: 1. Significant spending on navigation systems highlights a critical defense capability. 2. Northrop Grumman is a major player in the aerospace and defense sector. 3. The lack of competition raises concerns about potential overpricing and reduced innovation. 4. The sector is characterized by high barriers to entry and specialized technology.
Value Assessment
Rating: questionable
The contract value of $365 million is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar navigation system contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these navigation systems, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying for essential defense navigation technology. Lack of competition could stifle innovation in a critical defense sector. Dependence on a single contractor for such a vital system poses a long-term risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns
- Long contract duration
- Undefinitized contract action
Positive Signals
- Essential defense capability
- Established contractor
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigation systems. Spending in this area is crucial for national security, but often involves complex, high-cost components.
Small Business Impact
The data indicates this contract was awarded to a large corporation, Northrop Grumman. There is no indication of small business participation in this specific contract action.
Oversight & Accountability
The use of an undefinitized contract action (UCA) suggests a need for robust oversight to ensure the final definitized contract terms are fair and reasonable, especially given the lack of competition.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Long contract duration
- Undefinitized contract action (UCA)
- High contract value
Tags
search-detection-navigation-guidance-aer, department-of-defense, il, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $364.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. FY19 PRODUCTION UNDEFINITIZED CONTRACT ACTION (UCA)
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 $364.8 million.
What is the period of performance?
Start: 2019-04-30. End: 2023-12-29.
What is the justification for not competing this significant contract action?
The justification for not competing this $365 million contract action is not provided in the data. Typically, sole-source awards require specific justifications, such as unique capabilities or urgent needs. Without this information, it's impossible to assess the validity of the non-competitive award and its impact on value for money.
What are the risks associated with a sole-source UCA for navigation systems?
A sole-source UCA for navigation systems carries risks of inflated pricing due to lack of competition, potential for scope creep, and difficulties in establishing a fair and reasonable final price. The undefinitized nature means terms are still being negotiated, increasing uncertainty and potential for disputes or unfavorable outcomes for the government.
How does the long duration of this contract impact its effectiveness and cost?
The contract's duration of 1704 days (nearly 4.7 years) is substantial. This long period increases the risk of cost escalation due to inflation or changing market conditions, especially with an undefinitized contract. It also means the government is locked into a single provider for an extended time, potentially missing out on more advanced or cost-effective solutions developed during the contract's life.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001918R0002
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008
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: $364,797,792
Exercised Options: $364,797,792
Current Obligation: $364,797,792
Actual Outlays: $18,058,597
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $-41,071
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-04-30
Current End Date: 2023-12-29
Potential End Date: 2023-12-29 00:00:00
Last Modified: 2025-12-19
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