DoD Awards $13.7M for Silicon Carbide Wafers to Northrop Grumman, Lacking Competition
Contract Overview
Contract Amount: $13,676,106 ($13.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-10-02
End Date: 2027-02-28
Contract Duration: 879 days
Daily Burn Rate: $15.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: WAFER, SILICON CARBIDE
Place of Performance
Location: DURHAM, DURHAM County, NORTH CAROLINA, 27703
Plain-Language Summary
Department of Defense obligated $13.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: WAFER, SILICON CARBIDE Key points: 1. Significant award for critical semiconductor material. 2. Sole-source award raises concerns about price discovery. 3. Northrop Grumman is a major defense contractor. 4. Potential for higher costs due to limited competition.
Value Assessment
Rating: questionable
The award of $13.7M for silicon carbide wafers lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, assessing if this price is optimal for the government is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and may lead to higher costs for the government compared to a competitive process.
Taxpayer Impact: The lack of competition could result in taxpayers paying a premium for these essential silicon carbide wafers.
Public Impact
Essential components for advanced defense systems. Potential impact on future defense technology development. Government reliance on a single supplier for critical materials.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Critical material dependency
Positive Signals
- Award to established defense contractor
- Secures supply of critical material
Sector Analysis
The Department of Defense's procurement of specialized materials like silicon carbide wafers falls under the broader 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Benchmarks for such niche, high-tech components are difficult to establish without competitive data.
Small Business Impact
This contract was not awarded to a small business. The sole-source nature of the award further limits opportunities for small businesses to participate in supplying these critical materials.
Oversight & Accountability
The sole-source justification for this award warrants close scrutiny to ensure it was appropriately determined and that the government is not overpaying for the wafers. Future solicitations should explore competitive options.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Dependency on a single supplier.
- Lack of transparency in justification.
- No small business participation.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, nc, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. WAFER, SILICON CARBIDE
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 $13.7 million.
What is the period of performance?
Start: 2024-10-02. End: 2027-02-28.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or circumstances where only one source can fulfill the requirement. To ensure fair pricing, the agency should conduct a thorough price analysis, potentially using historical data, independent cost estimates, or market research, even in a sole-source scenario. Transparency regarding this justification is crucial for accountability.
What are the long-term risks associated with relying on a single supplier for critical silicon carbide wafers?
Long-term reliance on a single supplier for critical materials like silicon carbide wafers poses significant risks. These include potential supply chain disruptions due to the supplier's operational issues, price escalations without competitive pressure, and a lack of innovation if the supplier faces no market competition. This dependency can also hinder the government's ability to leverage new technologies or alternative materials.
How does this sole-source award impact the overall effectiveness of the Department of Defense's procurement strategy for advanced materials?
This sole-source award, while potentially addressing an immediate need, can negatively impact the overall effectiveness of the DoD's procurement strategy for advanced materials. It signals a potential gap in market competition or a failure to foster a competitive environment for these critical components. Over-reliance on sole-source contracts can stifle innovation, increase costs, and reduce the DoD's agility in adapting to technological advancements.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904
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: $13,676,106
Exercised Options: $13,676,106
Current Obligation: $13,676,106
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $7,367,800
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001920G0005
IDV Type: BOA
Timeline
Start Date: 2024-10-02
Current End Date: 2027-02-28
Potential End Date: 2027-02-28 00:00:00
Last Modified: 2025-09-10
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