DoD Awards Northrop Grumman $488M for Gun Mission Modules, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $488,430,723 ($488.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-03-16
End Date: 2027-03-26
Contract Duration: 3,662 days
Daily Burn Rate: $133.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF GUN MISSION MODULES (GMM)
Place of Performance
Location: BETHPAGE, NASSAU County, NEW YORK, 11714
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $488.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF GUN MISSION MODULES (GMM) Key points: 1. Significant contract value of $488M awarded to a single large contractor. 2. Northrop Grumman is a dominant player in defense systems, indicating limited direct competition. 3. Potential for cost overruns exists given the Cost Plus Fixed Fee contract type. 4. The sector is critical for naval defense capabilities.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while allowing flexibility, can lead to higher costs if not managed tightly. The awarded amount of $488M is substantial, and the contract duration suggests significant investment. Benchmarking against similar complex weapon system modules is difficult without more granular data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting an initial attempt to solicit broad interest. However, the award to a single, established contractor like Northrop Grumman may indicate a concentrated market or specific technical requirements that limited subsequent competition.
Taxpayer Impact: Taxpayer funds are being used for advanced defense systems. While competition was sought, the final award to a major defense contractor necessitates careful oversight to ensure value for money and prevent excessive profit.
Public Impact
Enhances naval combat capabilities with advanced targeting and fire control systems. Supports national security objectives by modernizing critical defense infrastructure. Potential for job creation within the defense manufacturing sector, particularly in New York. Ensures the U.S. Navy maintains a technological edge in maritime operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- Limited visibility into the competitive landscape post-initial solicitation.
- Potential for contractor lock-in due to specialized nature of the modules.
Positive Signals
- Awarded under full and open competition.
- Contract supports critical national defense modernization.
- Long contract duration allows for phased development and testing.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on advanced weapon systems and navigation instruments. Spending in this area is driven by national security priorities and technological advancements. Benchmarks are highly specific to the type and complexity of the system.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no explicit indication of small business subcontracting in the provided data. Efforts to ensure small business participation in the supply chain would be a key oversight area.
Oversight & Accountability
Oversight will be crucial given the contract type and duration. The Department of the Navy and potentially the Inspector General will need to monitor cost performance, schedule adherence, and technical execution to ensure accountability and prevent waste.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost overrun potential due to CPFF contract.
- Limited competition post-initial bid.
- Long contract duration increases risk exposure.
- Dependency on a single large contractor.
- Potential for scope creep without strict management.
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 $488.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF GUN MISSION MODULES (GMM)
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $488.4 million.
What is the period of performance?
Start: 2017-03-16. End: 2027-03-26.
What is the projected total cost of the program, and how does the current awarded amount compare to initial estimates?
The current awarded amount is $488,430,722.74. Without initial program estimates or a breakdown of funding phases, it's difficult to assess if this represents an overrun or is in line with expectations. Further analysis would require access to the program's baseline cost estimates and funding profiles.
What specific technical capabilities does the Gun Mission Module (GMM) provide, and how critical are these to current naval operations?
The GMM likely integrates advanced fire control, targeting, and potentially autonomous functions for naval gun systems. These capabilities are critical for enhancing the accuracy, range, and effectiveness of naval platforms in both offensive and defensive scenarios, directly impacting fleet readiness and mission success.
How will the effectiveness of the GMM be measured throughout the contract lifecycle, and what are the key performance indicators?
Effectiveness will likely be measured through rigorous testing and evaluation phases, including live-fire exercises and system integration trials. Key performance indicators would typically include accuracy metrics (e.g., circular error probable), reliability rates, system response times, and successful integration with existing naval combat systems.
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: MOTOR VEHICLES, CYCLES, TRAILERS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002416R6300
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 925 S OYSTER BAY RD, BETHPAGE, NY, 11714
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: $1,587,082,671
Exercised Options: $590,457,426
Current Obligation: $488,430,723
Actual Outlays: $18,163,654
Subaward Activity
Number of Subawards: 908
Total Subaward Amount: $1,474,998,583
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-03-16
Current End Date: 2027-03-26
Potential End Date: 2027-03-26 00:00:00
Last Modified: 2025-12-23
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