DoD awards $49.4M for FMU-139D/B Fuze Systems, with Northrop Grumman as prime contractor

Contract Overview

Contract Amount: $49,376,158 ($49.4M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2023-03-30

End Date: 2026-06-30

Contract Duration: 1,188 days

Daily Burn Rate: $41.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OP5 ORDER 3 - USN, USAF, USN FMS - FMU 139D/B FUZE SYSTEM, D2 AND D5

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $49.4 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: OP5 ORDER 3 - USN, USAF, USN FMS - FMU 139D/B FUZE SYSTEM, D2 AND D5 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price delivery order, providing cost certainty for the government. 3. The duration of the contract is approximately 3 years, aligning with typical defense procurement cycles. 4. The prime contractor, Northrop Grumman, has a significant presence in the defense sector. 5. The contract falls under the 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' NAICS code. 6. The award value is substantial, indicating a significant need for these fuze systems.

Value Assessment

Rating: good

The contract value of $49.4 million for fuze systems appears reasonable given the scope and duration. Benchmarking against similar ordnance procurements would provide a more precise value-for-money assessment. The firm-fixed-price structure helps mitigate cost overruns, which is a positive indicator for value.

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 number of bidders is not specified, but this approach generally fosters price discovery and encourages competitive pricing. The government likely received multiple proposals, allowing for selection of the best value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions, ultimately maximizing the value of federal dollars spent.

Public Impact

The primary beneficiaries are the U.S. Navy and Air Force, who will utilize the FMU-139D/B fuze systems. The services delivered include the manufacturing and supply of critical ordnance components. The geographic impact is primarily within the United States, where manufacturing and delivery will occur. Workforce implications may include skilled manufacturing jobs at Northrop Grumman and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on a single prime contractor for a critical defense component.
Ensuring long-term sustainment and maintenance of the fuze systems.

Positive Signals

Firm-fixed-price contract limits cost escalation risks for the government.
Award to an established defense contractor with proven manufacturing capabilities.
Full and open competition suggests a robust selection process.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on ordnance manufacturing. The market for such components is characterized by high barriers to entry due to specialized technology, stringent quality control, and government regulations. Spending in this area is critical for national security and is often driven by geopolitical factors and military readiness requirements. Comparable spending benchmarks would typically be found within the broader defense procurement data for munitions and related components.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (sb: false). While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Northrop Grumman's strategy and the specific requirements of the fuze system components.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering specified goods at the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. The Inspector General's office for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Defense Ammunition Procurement
Ordnance Manufacturing Contracts
Naval Air Systems Command Contracts
Air Force Materiel Command Contracts
Northrop Grumman Defense Contracts

Risk Flags

Potential for supply chain vulnerabilities
Reliance on prime contractor's manufacturing capacity
Ensuring long-term system sustainment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.4 million to NORTHROP GRUMMAN SYSTEMS CORP. OP5 ORDER 3 - USN, USAF, USN FMS - FMU 139D/B FUZE SYSTEM, D2 AND D5

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 $49.4 million.

What is the period of performance?

Start: 2023-03-30. End: 2026-06-30.

What is the historical spending by the Department of Defense on FMU-139D/B fuze systems or similar components?

Historical spending data on specific fuze system models like the FMU-139D/B can be challenging to isolate without direct access to detailed procurement databases. However, the Department of Defense consistently allocates significant funds towards ordnance and munitions. In fiscal year 2023, overall defense spending on weapons and ammunition exceeded tens of billions of dollars. Contracts for fuze systems are typically part of larger munitions procurement or sustainment programs. Analyzing trends in related categories such as 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' (NAICS 332994) can provide context. For instance, if this is a new system or a sustainment effort for an existing one, spending patterns would reflect either initial investment or ongoing operational needs. Without specific historical contract numbers for this exact fuze system, a precise year-over-year comparison is difficult, but the current $49.4 million award suggests a substantial, ongoing requirement.

How does the per-unit cost of the FMU-139D/B fuze system compare to market rates or similar government contracts?

Determining the precise per-unit cost for the FMU-139D/B fuze system is not possible with the provided data, as the total award amount ($49,376,157.83) does not include the quantity of units to be delivered. To perform a per-unit cost comparison, the number of fuze systems procured under this contract would be necessary. Generally, per-unit costs for defense components are influenced by factors such as production volume, complexity of the technology, material costs, and the level of competition during procurement. Government agencies often benchmark these costs against previous awards for similar items or against industry estimates. If the quantity were known, one could divide the total contract value by the number of units to derive an average per-unit cost. This figure could then be compared to publicly available data on similar ordnance components or internal government cost estimates to assess value for money.

What is Northrop Grumman's track record with the Department of Defense, particularly in ordnance manufacturing?

Northrop Grumman Systems Corporation is a major defense contractor with an extensive track record of supplying various systems and components to the Department of Defense. They have a significant presence in aerospace, defense, and information technology sectors. Within ordnance manufacturing, Northrop Grumman has been involved in the production of munitions, missile components, and related systems. Their history includes numerous large-scale contracts with all branches of the U.S. military. While specific details on their performance for every contract are not always public, their continued success in securing substantial defense contracts indicates a generally positive performance record and capability to meet stringent military requirements. The award of this $49.4 million contract for FMU-139D/B fuze systems further underscores their established role in this segment of the defense industrial base.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks associated with this contract include potential supply chain disruptions, manufacturing quality control issues, and schedule delays. Given the nature of defense procurement, reliance on specialized materials and components can expose the contract to global supply chain vulnerabilities. Ensuring consistent quality for ordnance components is paramount, and any lapse could have severe operational consequences. Schedule delays could impact military readiness. Mitigation strategies are likely embedded within the contract terms. The firm-fixed-price (FFP) structure incentivizes the contractor, Northrop Grumman, to manage costs and adhere to the schedule to maximize profit. Performance standards and quality assurance clauses within the contract would outline requirements and remedies for non-compliance. The Department of the Navy's program management would also provide oversight to monitor progress and address potential issues proactively.

How does the competition level for this contract (full and open) typically influence pricing and innovation compared to sole-source or limited competition?

Full and open competition generally leads to more favorable pricing and encourages innovation compared to sole-source or limited competition. In a full and open environment, multiple bidders vie for the contract, driving down prices as companies strive to offer the most competitive bids. This process also fosters innovation, as companies seek to differentiate their offerings through superior technology, performance, or efficiency to win the contract. Sole-source or limited competition, conversely, can result in higher prices due to the lack of competitive pressure and may limit the adoption of cutting-edge solutions if only one or a few providers are considered. For taxpayers, full and open competition maximizes the likelihood of obtaining the best value for their money and accessing a broader range of technological advancements.

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

Parent Company: Northrop Grumman Corporation

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: $49,376,158

Exercised Options: $49,376,158

Current Obligation: $49,376,158

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $76,133

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