DoD's $41.3M contract for FMU 139D/B FUZE SYSTEM awarded to Northrop Grumman Systems Corp

Contract Overview

Contract Amount: $41,325,541 ($41.3M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2022-05-11

End Date: 2024-09-30

Contract Duration: 873 days

Daily Burn Rate: $47.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMU 139D/B FUZE SYSTEM

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $41.3 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: FMU 139D/B FUZE SYSTEM Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger contract, indicating ongoing program support. 3. The fixed-price nature of the contract shifts cost risk to the contractor. 4. The contract duration of 873 days suggests a significant, multi-year effort. 5. The product classification falls under Small Arms, Ordnance, and Ordnance Accessories Manufacturing. 6. The award was made by the Department of the Navy, a major component of the DoD.

Value Assessment

Rating: good

The contract value of $41.3 million for the FMU 139D/B FUZE SYSTEM appears reasonable given the scope and duration. Benchmarking against similar ordnance procurement contracts would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for the government, as it caps potential cost overruns. However, without detailed cost breakdowns or comparisons to historical pricing for this specific fuze system, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters competitive pricing and encourages innovation. The open competition suggests that the government sought the best value from a wide range of potential suppliers, which should theoretically lead to more favorable pricing and terms for the taxpayer.

Taxpayer Impact: Full and open competition is the most taxpayer-friendly approach, as it maximizes the pool of potential bidders, driving down prices through market forces and ensuring the government receives competitive offers.

Public Impact

This contract directly supports the Department of Defense's ordnance requirements, ensuring the availability of critical components for military operations. The primary beneficiaries are the military personnel who rely on the functionality and reliability of the FMU 139D/B FUZE SYSTEM. The contract contributes to the defense industrial base, supporting manufacturing capabilities within the United States. The geographic impact is primarily within the defense supply chain, with potential downstream effects on employment in manufacturing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific competition numbers limits the assessment of price pressure.
Limited insight into the specific performance metrics or testing results for the fuze system.
The contract is a delivery order, so the overall contract vehicle's performance history is key.
Potential for obsolescence if the fuze system is not part of a forward-looking modernization program.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract structure transfers cost risk to the contractor.
The contract supports a critical defense requirement, ensuring operational readiness.
Northrop Grumman is a large, established defense contractor with a track record in complex systems.

Sector Analysis

The defense sector, particularly ordnance manufacturing, is characterized by high technological requirements, stringent quality control, and long procurement cycles. This contract for the FMU 139D/B FUZE SYSTEM fits within the broader category of defense electronics and munitions. The market is dominated by a few large prime contractors, but sub-tier suppliers play a crucial role. Spending in this area is driven by military readiness needs and geopolitical factors. Comparable spending benchmarks would involve analyzing other fuze system procurements or similar ordnance components.

Small Business Impact

This contract does not appear to have a small business set-aside (sb: false). While the prime contractor, Northrop Grumman, is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting is not detailed in the provided data, but it is a common practice in large defense contracts to meet socio-economic goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Ordnance Procurement
Naval Air Systems Command (NAVAIR) Contracts
Northrop Grumman Defense Contracts
Fuze System Manufacturing
Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Risk Flags

Potential for schedule delays due to supply chain or manufacturing complexities.
Risk of technical obsolescence if not integrated into future modernization plans.
Dependence on a single prime contractor for critical ordnance components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.3 million to NORTHROP GRUMMAN SYSTEMS CORP. FMU 139D/B FUZE SYSTEM

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $41.3 million.

What is the period of performance?

Start: 2022-05-11. End: 2024-09-30.

What is the historical spending trend for the FMU 139D/B FUZE SYSTEM or similar fuze systems by the Department of Defense?

Analyzing historical spending for the FMU 139D/B FUZE SYSTEM requires access to detailed contract databases beyond the provided summary. However, general trends in ordnance procurement show consistent investment by the DoD to maintain readiness and modernize capabilities. Spending on fuze systems is often tied to specific aircraft, munitions, or weapon platforms. Fluctuations in spending can be influenced by geopolitical events, new program starts, or the phasing out of older systems. For a precise trend analysis, one would need to aggregate data on all contracts related to this specific fuze system or its direct predecessors/successors over several fiscal years, looking for patterns in award values, quantities, and contract types.

How does the awarded price compare to industry benchmarks for similar fuze systems?

A direct comparison of the awarded price to industry benchmarks for similar fuze systems is challenging without access to proprietary industry data or detailed cost breakdowns from the contractor. However, the fact that this contract was awarded under full and open competition suggests that the price was deemed competitive by the Department of the Navy. The firm fixed-price nature also implies that the contractor has factored in their costs and profit margins to meet a market-driven price. To perform a robust benchmark, one would need to identify comparable fuze systems (e.g., by function, complexity, and application) and analyze their procurement costs across different government agencies or even international allies, considering factors like volume discounts and technological sophistication.

What are the key performance indicators (KPIs) associated with the FMU 139D/B FUZE SYSTEM, and how has Northrop Grumman performed on similar contracts?

Key performance indicators (KPIs) for a fuze system typically revolve around reliability, safety, accuracy, environmental resistance (e.g., temperature, humidity), and specific functional parameters (e.g., arming delay, detonation probability). While the provided data does not list specific KPIs for this contract, they would be detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). Northrop Grumman's performance on similar contracts can be assessed by reviewing their past performance evaluations in federal procurement databases. These evaluations often provide ratings on factors like quality, timeliness, cost control, and customer satisfaction. A review of these past performance records would indicate their general capability and reliability in delivering complex defense systems.

What is the risk profile of this contract in terms of technical complexity and schedule adherence?

The risk profile of this contract involves moderate technical complexity inherent in ordnance systems, requiring precise engineering and manufacturing. The schedule adherence risk is influenced by the 873-day duration and the firm fixed-price nature. While the fixed price incentivizes the contractor to meet the schedule efficiently, unforeseen technical challenges or supply chain disruptions could pose risks. Northrop Grumman's experience with similar systems and the Department of the Navy's program management oversight are key mitigating factors. The contract being a delivery order under a potentially larger contract vehicle might suggest that some initial technical risks have already been addressed in the parent contract's development phase.

What is the strategic importance of the FMU 139D/B FUZE SYSTEM to the Department of Defense's overall mission?

The FMU 139D/B FUZE SYSTEM is strategically important as a critical component of various munitions, directly impacting the effectiveness and safety of aerial or ground-based weapon systems. Fuze systems are essential for ensuring that ordnance detonates at the intended time and location, maximizing target effect while minimizing collateral damage or premature detonation. The DoD's reliance on such systems underscores the need for a robust and reliable supply chain, as highlighted by this contract. Maintaining a sufficient inventory and technological edge in fuze systems is vital for force projection, combat readiness, and achieving mission objectives in diverse operational environments.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001914R0025

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 210 STATE ROUTE 956, ROCKET CENTER, WV, 26726

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: $41,325,541

Exercised Options: $41,325,541

Current Obligation: $41,325,541

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $19,166,633

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001915D0030

IDV Type: IDC

Timeline