DoD's $25.6M contract with Northrop Grumman for navigation systems lacked competition, raising cost concerns
Contract Overview
Contract Amount: $25,590,804 ($25.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2005-12-14
End Date: 2011-06-22
Contract Duration: 2,016 days
Daily Burn Rate: $12.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: CHARLOTTESVILLE, ALBEMARLE County, VIRGINIA, 22901
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $25.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Significant spending on specialized navigation systems. 2. Sole-source award to a major defense contractor. 3. Long contract duration with potential for cost overruns. 4. Limited transparency due to lack of competition.
Value Assessment
Rating: questionable
The contract value of $25.6 million is substantial for specialized navigation systems. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems from other manufacturers.
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 may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. Reliance on a single contractor for critical navigation systems could pose a long-term risk. Limited visibility into the cost-effectiveness of the awarded systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Long contract duration
Positive Signals
- Established contractor
- Definitive contract type
Sector Analysis
This contract falls within the Defense sector, specifically focusing on navigation and guidance systems. Spending in this area is critical for military operations but often involves complex, high-value contracts.
Small Business Impact
The data indicates this contract was awarded to a large corporation, Northrop Grumman Systems Corporation. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the pricing is justified and that future procurements explore competitive options where feasible.
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
- Potential for inflated pricing
- Limited transparency
- Long-term vendor dependency
Tags
search-detection-navigation-guidance-aer, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.
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 $25.6 million.
What is the period of performance?
Start: 2005-12-14. End: 2011-06-22.
What specific factors justified the sole-source award, and were alternatives thoroughly explored?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one contractor can meet. Without detailed documentation, it's impossible to confirm if alternatives were adequately explored or if the justification was robust enough to warrant bypassing competition.
How does the per-unit cost of these navigation systems compare to industry benchmarks, if available?
Benchmarking the per-unit cost is challenging without knowing the specific system's capabilities and the number of units procured. However, given the sole-source nature and the absence of competitive pricing, it is probable that the cost is higher than what might be achieved in a competitive market. Further analysis would require detailed specifications.
What is the long-term strategic risk associated with relying on a single provider for these critical systems?
Long-term reliance on a single provider creates strategic risks including vendor lock-in, potential price increases over time, and vulnerability if the contractor faces financial difficulties or changes its business focus. It also limits the government's ability to leverage innovation from a broader market.
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
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1070 SEMINOLE TRL, CHARLOTTESVILL, VA, 22901
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2005-12-14
Current End Date: 2011-06-22
Potential End Date: 2011-06-22 00:00:00
Last Modified: 2024-03-07
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