DoD Awards Northrop Grumman $115M for Radar Equipment, Raising Competition Concerns
Contract Overview
Contract Amount: $115,313,434 ($115.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2004-07-01
End Date: 2012-02-28
Contract Duration: 2,798 days
Daily Burn Rate: $41.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200410!043961!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002404C4304 !A!N! !N! ! !20040701!20080701!091451302!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!65 MARCUS DRIVE !MELVILLE !NY!11747!46514!103!36!MELVILLE !SUFFOLK !NEW YORK !+000004471871!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !1! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!A!Y! ! ! !Y! ! !0001! !
Place of Performance
Location: BETHPAGE, NASSAU County, NEW YORK, 11714
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $115.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200410!043961!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002404C4304 !A!N! !N! ! !20040701!20080701!091451302!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!65 MARCUS DRIVE !MELVILLE !NY!11747!46514!103!36!MELVILLE !SUFF… Key points: 1. Significant contract value of $115.3 million for radar equipment. 2. Awarded to Northrop Grumman Systems Corporation, a major defense contractor. 3. Contract was 'NOT COMPETED', raising questions about price discovery and value. 4. Sector is Electronics and Communication Equipment, specifically radar systems.
Value Assessment
Rating: questionable
The contract value of $115.3 million for radar equipment is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar radar systems procured through competitive processes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'NOT COMPETED', indicating a limited competition scenario. This lack of competition may have led to a higher price than could have been achieved through a full and open solicitation, impacting price discovery.
Taxpayer Impact: The absence of competition for a $115.3 million contract suggests potential overspending of taxpayer funds, as a more competitive process could have yielded a lower price.
Public Impact
Taxpayers may be overpaying for critical radar equipment due to lack of competition. National security could be impacted if advanced radar technology is not procured at the best possible price. The award to a single large contractor may limit opportunities for smaller, innovative firms in the radar sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential Overpricing
- Limited Small Business Participation
Positive Signals
- Award to established, experienced contractor
- Definitive contract provides long-term stability
Sector Analysis
This contract falls within the 'Electronics and Communication Equipment' sector, specifically for radar systems. The benchmark for radar equipment can vary widely based on technological sophistication and intended use, but $115.3 million for a non-competitive award warrants scrutiny.
Small Business Impact
The data indicates this contract was not awarded to small businesses (ss=false, sb=false). The lack of competition further suggests limited opportunities for small businesses to participate in this specific procurement.
Oversight & Accountability
The 'NOT COMPETED' status necessitates close oversight to ensure the government received fair value. Accountability rests with the Naval Sea Systems Command to justify the sole-source or limited-source justification and ensure proper price negotiation.
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 competition raises concerns about fair pricing.
- Potential for overpayment of taxpayer funds.
- Limited visibility into the justification for non-competitive award.
- Missed opportunity to foster innovation through competitive bidding.
- Possible exclusion of small businesses from a significant contract.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ny, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $115.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200410!043961!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002404C4304 !A!N! !N! ! !20040701!20080701!091451302!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!65 MARCUS DRIVE !MELVILLE !NY!11747!46514!103!36!MELVILLE !SUFFOLK !NEW YORK !+000004471871!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !1! ! ! ! ! !999
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 $115.3 million.
What is the period of performance?
Start: 2004-07-01. End: 2012-02-28.
What was the justification for not competing this $115.3 million radar equipment contract?
The justification for not competing this contract is crucial for understanding the value proposition. Typically, non-competitive awards are made under specific circumstances, such as the existence of only one responsible source, urgent and compelling needs, or specific national security requirements. Without this justification, it's difficult to assess if the government acted appropriately in foregoing a competitive process.
How does the $115.3 million price compare to similar radar systems procured competitively?
Benchmarking this $115.3 million award against competitively procured radar systems is essential for value assessment. Without competitive data, it's challenging to determine if Northrop Grumman's pricing is reasonable. A thorough analysis would involve comparing specifications, capabilities, and unit costs of similar systems acquired through full and open competition to identify potential overpricing.
What is the long-term strategic impact of awarding such a large contract non-competitively?
Awarding a significant contract like this non-competitively can have long-term strategic implications. It may stifle innovation by reducing the incentive for other companies to develop competing technologies. Furthermore, it could create a dependency on a single supplier, potentially limiting future negotiation leverage and increasing long-term costs for the Department of Defense.
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: COMM/DETECT/COHERENT RADIATION
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
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 65 MARCUS DRIVE, MELVILLE, NY, 11747
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2004-07-01
Current End Date: 2012-02-28
Potential End Date: 2012-02-28 00:00:00
Last Modified: 2020-07-07
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