DoD Spends $17.5M on 24 Digital Receiver Processors from Northrop Grumman, Awarded via Non-Competitive Contract
Contract Overview
Contract Amount: $17,476,682 ($17.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-07-31
End Date: 2024-12-31
Contract Duration: 1,980 days
Daily Burn Rate: $8.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: THIS DELIVERY ORDER IS FOR THE PURCHASE OF 24 DIGITAL RECEIVER PROCESSORS (DRPS).
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $17.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THIS DELIVERY ORDER IS FOR THE PURCHASE OF 24 DIGITAL RECEIVER PROCESSORS (DRPS). Key points: 1. High dollar value for specialized electronic components. 2. Sole-source award to Northrop Grumman limits competitive pricing. 3. Long contract duration (5 years) may not reflect current market needs. 4. Sector is Other Aircraft Parts Manufacturing, indicating defense-related procurement.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type can lead to higher costs if not carefully managed. Without competitive bids, it's difficult to assess if the $17.5M price is reasonable compared to market alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these processors, as there was no market pressure to drive down the price.
Public Impact
Military readiness may be impacted by the availability and cost of these critical components. Taxpayers bear the cost of this sole-source procurement, raising questions about value for money. The long performance period could mean the technology becomes outdated before the contract ends.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Essential defense procurement
Sector Analysis
This procurement falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a niche area often dominated by a few large defense contractors. Benchmarks are difficult without comparable sole-source contracts.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large prime contractor. There is no indication of small business participation in this specific delivery order.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the fixed fee is justified and costs are reasonable. Transparency in the justification for non-competition is crucial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition
- Cost-plus contract type may inflate costs
- Long contract duration risks technology obsolescence
- Limited transparency on justification for non-competition
- Potential for higher taxpayer cost due to lack of market pressure
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 $17.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THIS DELIVERY ORDER IS FOR THE PURCHASE OF 24 DIGITAL RECEIVER PROCESSORS (DRPS).
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 $17.5 million.
What is the period of performance?
Start: 2019-07-31. End: 2024-12-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative solutions explored?
The justification for a sole-source award is critical for understanding the necessity of bypassing competition. Without this information, it's impossible to determine if the government received fair value or if alternative, potentially more cost-effective solutions were overlooked. This lack of transparency raises concerns about efficient use of taxpayer funds.
How does the cost-plus fixed fee structure ensure cost control for these digital receiver processors, given the lack of competition?
Cost-plus fixed fee contracts can incentivize contractors to increase costs to maximize their fee, especially without competitive pressure. Robust government oversight is essential to scrutinize allowable costs and ensure the fixed fee is reasonable. The long duration further complicates cost control, as market conditions can change significantly.
What is the plan to ensure the technology remains relevant and effective throughout the 5-year contract period?
Given the rapid pace of technological advancement, a 5-year contract for digital receiver processors raises concerns about obsolescence. The government should have clear mechanisms for technology refresh, upgrades, or re-evaluation of requirements to ensure the procured items remain effective and meet evolving operational needs.
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: $17,476,682
Exercised Options: $17,476,682
Current Obligation: $17,476,682
Actual Outlays: $89,892
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $1,399,256
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001915G0026
IDV Type: BOA
Timeline
Start Date: 2019-07-31
Current End Date: 2024-12-31
Potential End Date: 2024-12-31 00:00:00
Last Modified: 2025-04-14
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