DoD awards Northrop Grumman $116M for FMU-139D/B Bomb Fuzes, with no competition
Contract Overview
Contract Amount: $116,387,796 ($116.4M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2024-09-09
End Date: 2027-03-31
Contract Duration: 933 days
Daily Burn Rate: $124.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FMU-139D/B BOMB, ELECTRONIC FUZE SYSTEMS, TRAINER AND INERT FUZE SYSTEMS
Place of Performance
Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726
Plain-Language Summary
Department of Defense obligated $116.4 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: FMU-139D/B BOMB, ELECTRONIC FUZE SYSTEMS, TRAINER AND INERT FUZE SYSTEMS Key points: 1. Significant contract value for specialized ordnance components. 2. Sole-source award raises concerns about price discovery and competition. 3. Long contract duration (over 3 years) impacts long-term value assessment. 4. The sector is defense manufacturing, a critical but often high-cost area.
Value Assessment
Rating: questionable
The contract's value of $116M over 933 days for electronic fuze systems is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar contracts or market rates, raising questions about cost-effectiveness.
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 taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition on this $116M contract means taxpayers may be paying a premium for these electronic fuze systems.
Public Impact
Ensures supply of critical bomb fuzes for naval operations. Potential for cost overruns due to lack of competitive pressure. Long-term contract may lock in pricing, impacting future savings. Supports a major defense contractor's operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Critical defense component
- Established contractor
Sector Analysis
This contract falls within the defense manufacturing sector, specifically ordnance. Spending in this area is often characterized by high R&D costs, specialized manufacturing, and a limited number of qualified suppliers, which can drive up prices.
Small Business Impact
The awardee, Northrop Grumman Systems Corp, is a large defense contractor. There is no indication that small businesses were involved in this specific contract, either as prime or subcontractors.
Oversight & Accountability
The Department of the Navy awarded this contract. Oversight would focus on ensuring performance and adherence to the firm fixed price, especially given the sole-source nature which reduces inherent price oversight.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited technological adaptability
- Long-term commitment without market validation
Tags
small-arms-ordnance-and-ordnance-accesso, department-of-defense, wv, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $116.4 million to NORTHROP GRUMMAN SYSTEMS CORP. FMU-139D/B BOMB, ELECTRONIC FUZE SYSTEMS, TRAINER AND INERT FUZE SYSTEMS
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 $116.4 million.
What is the period of performance?
Start: 2024-09-09. End: 2027-03-31.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. The Department of Defense should have conducted a price analysis, comparing proposed costs to historical data, commercial price lists, or other available benchmarks to ensure the price was fair and reasonable, despite the absence of competition.
What is the projected cost per unit for the FMU-139D/B fuze systems under this contract?
Without a breakdown of the total contract value by the number of units procured, the per-unit cost cannot be definitively calculated. However, given the $116M contract value and the nature of electronic fuze systems, the per-unit cost is likely to be significant, potentially in the thousands of dollars, especially considering R&D and specialized manufacturing.
How does the long contract duration (over 3 years) impact the government's ability to adapt to technological advancements in fuze systems?
A long contract duration can limit the government's flexibility to adopt newer, potentially more advanced or cost-effective technologies that may emerge during the contract period. While modifications are possible, they can be complex and costly. This duration suggests a need for a stable supply of the current system, but it carries the risk of obsolescence or missed opportunities for innovation.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001923R0104
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 210 STATE ROUTE 956, KEYSER, 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: $116,387,796
Exercised Options: $116,387,796
Current Obligation: $116,387,796
Subaward Activity
Number of Subawards: 63
Total Subaward Amount: $35,567,489
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001924D0104
IDV Type: IDC
Timeline
Start Date: 2024-09-09
Current End Date: 2027-03-31
Potential End Date: 2027-03-31 00:00:00
Last Modified: 2025-05-21
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