DoD Awards Northrop Grumman $138.9M for Electronic Fuze Systems, Lacking Competition
Contract Overview
Contract Amount: $138,940,994 ($138.9M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2025-05-30
End Date: 2028-08-31
Contract Duration: 1,189 days
Daily Burn Rate: $116.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FMU-139D/B BOMB, ELECTRONIC FUZE SYSTEM PRODUCTION
Place of Performance
Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726
Plain-Language Summary
Department of Defense obligated $138.9 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: FMU-139D/B BOMB, ELECTRONIC FUZE SYSTEM PRODUCTION Key points: 1. Significant contract value of $138.9 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract is for electronic fuze systems, a critical component for ordnance. 4. Spending is concentrated in the Defense sector, specifically with the Department of the Navy.
Value Assessment
Rating: questionable
The contract value of $138.9 million for electronic fuze systems is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems or potential alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and negotiation leverage for the government, potentially leading to higher costs.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these electronic fuze systems, as there was no market pressure to drive down prices.
Public Impact
Taxpayers may be overpaying for essential defense components due to the absence of competitive bidding. The sole-source nature of the award could stifle innovation in fuze system technology. Reliance on a single contractor for critical defense systems presents a potential supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- No small business participation
- High contract value
Positive Signals
- Critical defense component
- Long-term contract duration
Sector Analysis
This contract falls within the Defense sector, specifically for ordnance manufacturing. The $138.9 million award is a significant investment in electronic fuze systems, a critical component for military operations.
Small Business Impact
The data indicates no small business participation in this contract. Awarding such a large sum to a single large business contractor bypasses opportunities for small businesses to contribute and grow.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that the contractor is meeting all performance requirements. Transparency in pricing negotiations is crucial.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- No small business participation limits economic opportunity.
- Potential for overpayment due to lack of competition.
- Supply chain risk associated with single-source provider.
- Limited incentive for innovation without competitive market.
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 $138.9 million to NORTHROP GRUMMAN SYSTEMS CORP. FMU-139D/B BOMB, ELECTRONIC FUZE SYSTEM PRODUCTION
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 $138.9 million.
What is the period of performance?
Start: 2025-05-30. End: 2028-08-31.
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 proprietary technology. However, without competition, the government must rely on rigorous negotiation and cost analysis to ensure fair pricing. Robust oversight is essential to validate the necessity of the sole-source approach and to scrutinize the contractor's proposed costs against independent benchmarks or historical data.
What are the potential risks associated with relying on a single supplier for critical electronic fuze systems, especially given the long contract duration?
Sole-source reliance creates significant supply chain vulnerability. Risks include potential production delays, quality control issues, price escalations, and a lack of incentive for the contractor to innovate. The long duration amplifies these risks, as the government is locked into this single provider for an extended period, potentially missing out on technological advancements or more cost-effective solutions.
How does the absence of competition impact the government's ability to secure advanced or cost-effective electronic fuze system technology?
The lack of competition directly hinders the government's ability to leverage market forces for technological advancement and cost savings. Without competing bids, there is less incentive for contractors to invest in R&D to offer superior or more affordable solutions. The government misses out on the innovation and price reductions that typically arise from a competitive procurement process.
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
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: $138,940,994
Exercised Options: $138,940,994
Current Obligation: $138,940,994
Subaward Activity
Number of Subawards: 34
Total Subaward Amount: $19,399,796
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: 2025-05-30
Current End Date: 2028-08-31
Potential End Date: 2028-08-31 00:00:00
Last Modified: 2025-09-30
More Contracts from Northrop Grumman Systems Corp
- Ground-Based Strategic Deterrent (gbsd) Engineering and Manufacturing Development (EMD) and Early Production and Deployment (P&D) — $11.7B (Department of Defense)
- Acat 1D B-2 Dms-M EMD — $863.7M (Department of Defense)
- 200411!000088!5700!GU22 !asc/Ysk !F3365799D0028 !A!N! !N!0023 ! !20040827!20081230!362686958!008255408!016435559!n!northrop Grumman Systems Corpo!3520 East Avenue M !palmdale !ca!93550!55156!037!06!palmdale !LOS Angeles !california!+000000400000!n!n!000000000000!ac65!rdte/Electronics&communication Eq-Eng/Manuf DEV !a1c!other Aircraft Equipment !376 !B-2 RMP !336411!E! !5!B!S! ! ! !99990909!B! ! !n!z!d!n!r!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!d!n! ! ! !Y! ! !0001! ! — $542.1M (Department of Defense)
- Acat 1, B2 UCA for DMS TD Phase 2 — $536.3M (Department of Defense)
- Enhanced Polar System Recapitalization - TWO Payloads (P6&P7) — $472.1M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)