DoD's $257M Northrop Grumman Contract Awarded Without Competition in 1999

Contract Overview

Contract Amount: $25,713,618 ($25.7M)

Contractor: Northrop Grumman Corporation

Awarding Agency: Department of Defense

Start Date: 1999-11-03

End Date: 2005-12-31

Contract Duration: 2,250 days

Daily Burn Rate: $11.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $25.7 million to NORTHROP GRUMMAN CORPORATION for work described as: Key points: 1. Significant contract value of $257 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. Long contract duration (1999-2005) suggests a need for ongoing oversight. 4. Firm Fixed Price contract type offers some cost certainty but may limit flexibility.

Value Assessment

Rating: questionable

The $257 million award to Northrop Grumman, a major defense contractor, lacks comparative data due to its sole-source nature. Without competitive bids, assessing if the pricing is reasonable against similar contracts is difficult, suggesting potential for inflated costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning no other vendors were considered. This significantly limits price discovery and competition, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The absence of competition likely resulted in higher prices than could have been achieved through a competitive bidding process, impacting taxpayer value.

Public Impact

Taxpayers may have paid more than necessary due to the lack of competitive bidding. The long-term nature of the contract could indicate a critical, ongoing need for the services or goods provided. Reliance on a single large contractor for a substantial amount raises questions about market concentration in defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
No small business participation indicated

Positive Signals

Firm Fixed Price contract type

Sector Analysis

This contract falls within the Defense sector, characterized by large, complex procurements often involving specialized technologies. Benchmarks for similar sole-source defense contracts are difficult to establish due to the inherent lack of transparency.

Small Business Impact

The data indicates no small business participation in this contract. This is common in large, sole-source defense procurements, but it represents a missed opportunity for small business growth and innovation.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight to ensure the contractor is meeting all requirements and that costs remain justified throughout the contract's life. Without competition, accountability relies heavily on the agency's diligence.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for inflated pricing
No small business involvement
Limited transparency on justification
Long contract duration without clear performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.7 million to NORTHROP GRUMMAN CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $25.7 million.

What is the period of performance?

Start: 1999-11-03. End: 2005-12-31.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative solutions explored?

The specific justification for the sole-source award is not provided in the data. Typically, sole-source contracts are justified by factors such as unique capabilities, urgent needs, or lack of market availability. A thorough review would require access to the contract's justification and approval (J&A) documentation to ascertain if alternative solutions were indeed considered and why they were deemed unsuitable.

How did the agency ensure fair and reasonable pricing without competitive bids, and what mechanisms were in place for cost control?

Ensuring fair and reasonable pricing without competition relies on robust cost analysis by the procuring agency. This involves evaluating the contractor's proposed costs, including labor, materials, and overhead, against historical data, independent cost estimates, and industry benchmarks where available. Mechanisms like detailed audits and performance reviews are crucial for cost control.

What was the ultimate outcome or effectiveness of the goods/services provided under this contract, and did it meet the Department of Defense's needs?

The provided data does not include information on the contract's ultimate outcome or effectiveness. Assessing whether the goods or services met the Department of Defense's needs would require reviewing performance reports, acceptance records, and any post-contract evaluations. Without this, it's impossible to determine the true value delivered.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: S OYSTER BAY RD, BETHPAGE, NY, 11714

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline