DoD awards Northrop Grumman $66.5M for Navigation Systems, highlighting potential value concerns
Contract Overview
Contract Amount: $66,456,168 ($66.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2013-02-25
End Date: 2020-03-30
Contract Duration: 2,590 days
Daily Burn Rate: $25.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IBNS
Place of Performance
Location: CHARLOTTESVILLE, ALBEMARLE County, VIRGINIA, 22901
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $66.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IBNS Key points: 1. Significant contract value of $66.5M awarded to a single large corporation. 2. Competition method was 'Full and Open', suggesting potential for competitive pricing. 3. Contract duration of 2590 days (approx. 7 years) raises questions about long-term value and adaptability. 4. Sector focus on Navigation Systems is critical for defense operations.
Value Assessment
Rating: fair
The contract value of $66.5M over nearly 7 years needs careful benchmarking against similar navigation system contracts. Without specific per-unit data, assessing true value is challenging, but the duration suggests potential for cost overruns or outdated technology if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition', which theoretically allows any qualified vendor to bid, promoting price discovery. However, the long duration and specific nature of defense systems might limit the number of truly competitive bids.
Taxpayer Impact: The long-term nature of this contract means taxpayers are committed to this expenditure over several years. Effective oversight is crucial to ensure the price remains competitive and the technology remains relevant.
Public Impact
Taxpayers are funding critical defense navigation technology. The long contract duration could impact the adoption of newer, more efficient technologies. Potential for cost escalation over the contract's lifespan requires vigilant monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Long contract duration
- Potential for technology obsolescence
- Limited visibility into per-unit cost effectiveness
Positive Signals
- Full and open competition awarded
- Critical defense system procurement
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a vital component of national defense. Spending in this area is typically high due to the specialized nature and critical function of the equipment.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large defense contractor. There is no explicit indication of small business participation in this data, suggesting the primary award likely went to a large entity, potentially subcontracting to smaller firms.
Oversight & Accountability
The 'Defense Contract Management Agency' is listed as the overseeing agency. Their role is crucial in monitoring performance, cost, and adherence to contract terms over the multi-year duration to ensure taxpayer value and mission success.
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
- Long contract duration (7 years)
- Potential for technology obsolescence
- Lack of specific per-unit cost data for benchmarking
- High contract value concentrated with one large contractor
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 $66.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IBNS
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 $66.5 million.
What is the period of performance?
Start: 2013-02-25. End: 2020-03-30.
What was the specific pricing structure and justification for the firm fixed price over the 7-year duration?
The firm fixed price (FFP) contract aims to provide cost certainty. However, for a long-duration contract like this, the initial price must account for potential inflation, material cost fluctuations, and R&D. The justification would likely involve detailed cost breakdowns, market research, and risk assessments by the DoD to ensure the FFP remains fair and reasonable throughout the contract's life.
How does the awarded navigation system compare to current commercial or emerging technologies in terms of capability and cost-effectiveness?
Given the contract's start in 2013 and end in 2020, the system procured might be nearing obsolescence or has been surpassed by newer technologies. A thorough review would assess if the DoD received state-of-the-art capabilities at the time of award and if ongoing sustainment costs are justified compared to upgrading or replacing the system with more modern alternatives.
What mechanisms were in place to ensure ongoing competition or price adjustments if market conditions changed significantly during the contract's long term?
While awarded under full and open competition, the long duration necessitates mechanisms for price adjustments or re-competition. This could include contract clauses for economic price adjustments (EPAs), options for additional quantities at pre-negotiated prices, or provisions for competitive re-bidding if performance issues arise or significant technological advancements occur.
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: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002412R4202
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1070 SEMINOLE TRAIL, CHARLOTTESVILLE, VA, 22901
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: $222,589,535
Exercised Options: $66,824,540
Current Obligation: $66,456,168
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2013-02-25
Current End Date: 2020-03-30
Potential End Date: 2020-03-30 00:00:00
Last Modified: 2025-10-30
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