DoD Awards Northrop Grumman $26.3M for Test Instruments, Lacking Competition
Contract Overview
Contract Amount: $26,279,726 ($26.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2001-10-01
End Date: 2007-12-31
Contract Duration: 2,282 days
Daily Burn Rate: $11.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: 200205!001600!1700!AT727 !NAVAL AIR SYSTEMS COMMAND !N0001999C1240 !A!N! !N!P00009 !20010920!20021001!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!500 HICKS RD 600 !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK !ILLINOIS !+000005500000!N!N!000000000000!6625!ELECTRICAL & ELCT PROPERTIES MEAS & TST INSTRUMNTS!A7 !ELECTRONICS AND COMMUNICATION !2GHB!CASS !334511!E! !3! ! !A! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! !N00019!0001!
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $26.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200205!001600!1700!AT727 !NAVAL AIR SYSTEMS COMMAND !N0001999C1240 !A!N! !N!P00009 !20010920!20021001!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!500 HICKS RD 600 !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK … Key points: 1. Contract awarded for test instruments, a niche but critical component in defense systems. 2. Northrop Grumman, a major defense contractor, secured the sole-source award. 3. The contract's lack of competition raises concerns about potential overpricing and limited innovation. 4. Spending in the 'Electronics and Communication' sector is substantial, making oversight crucial.
Value Assessment
Rating: questionable
The contract value of $26.3 million for test instruments appears high given the lack of competitive bidding. Without market comparison, it's difficult to ascertain if this price reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition suggests taxpayers may be paying a premium for these specialized test instruments.
Public Impact
Taxpayers may be overpaying for essential defense equipment due to a lack of competitive bidding. Limited visibility into the procurement process for specialized defense components. Potential for reduced innovation as there is no incentive for alternative solutions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Potential for inflated costs
Positive Signals
- Award to established defense contractor
- Procurement of critical test equipment
Sector Analysis
This contract falls within the 'Electronics and Communication' sector, which is a significant area of defense spending. Benchmarks for similar specialized test instruments are difficult to establish without competitive data.
Small Business Impact
The award went to a large prime contractor, Northrop Grumman, with no indication of small business subcontracting in the provided data. This contract does not appear to benefit small businesses directly.
Oversight & Accountability
The sole-source nature of this award warrants closer scrutiny from oversight bodies to ensure fair pricing and justification for the lack of competition.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency in pricing
- No clear small business participation
Tags
search-detection-navigation-guidance-aer, department-of-defense, il, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200205!001600!1700!AT727 !NAVAL AIR SYSTEMS COMMAND !N0001999C1240 !A!N! !N!P00009 !20010920!20021001!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!500 HICKS RD 600 !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK !ILLINOIS !+000005500000!N!N!000000000000!6625!ELECTRICAL & ELCT PROPERTIES MEAS & TST INSTRUMNTS!A7 !ELECTRONICS AND COMMUNICATION !2GHB!CASS !334511!E! !3! ! !A! ! !99990909!B
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $26.3 million.
What is the period of performance?
Start: 2001-10-01. End: 2007-12-31.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. Without specific documentation, it's impossible to confirm the validity of the sole-source justification for these test instruments.
How can the government ensure fair pricing without competition?
Ensuring fair pricing without competition is challenging. Agencies often rely on historical pricing, should-cost analyses, or independent government cost estimates. However, the effectiveness of these methods can be limited without actual market bids to validate them.
What is the long-term impact of sole-source contracts on defense innovation?
Sole-source contracts can stifle innovation by removing the competitive pressure that drives contractors to develop more efficient or advanced solutions. When a single vendor is guaranteed business, the incentive to invest in R&D or explore alternative technologies may diminish.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: INSTRUMENTS AND LABORATORY EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 500 HICKS RD 600, ROLLING MEADOW, IL, 60008
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2001-10-01
Current End Date: 2007-12-31
Potential End Date: 2007-12-31 00:00:00
Last Modified: 2022-07-27
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