DoD Awards Northrop Grumman $69M for Trident Missile System Maintenance and Repair
Contract Overview
Contract Amount: $69,071,503 ($69.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 1999-12-06
End Date: 2006-09-26
Contract Duration: 2,486 days
Daily Burn Rate: $27.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200006!1700!00A018!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003000C0003 !A!*!* !19991206!20000930!001864081!008255408!008255408!N!90099!NORTHROP GRUMMAN CORPORATION !401 E. HENDY AVE !SUNNYVALE !CA!94088!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!0001!+000047730930!N!N!000000000000!J099!MAINT & REPAIR OF EQ/MISCELLANEOUS EQUIPMENT !A2 !MISSILE AND SPACE SYSTEMS !2CNJ!UGM-96 TRIDENT !8711!3!*!*!*!B!A!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94086, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $69.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200006!1700!00A018!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003000C0003 !A!*!* !19991206!20000930!001864081!008255408!008255408!N!90099!NORTHROP GRUMMAN CORPORATION !401 E. HENDY AVE !SUNNYVALE !CA!94088!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!0001!+000047730930!N!N!000000000… Key points: 1. Contract awarded to Northrop Grumman for maintenance and repair of missile and space systems. 2. The contract is a Cost Plus Fixed Fee type, indicating potential for cost overruns. 3. Awarded on a sole-source basis, raising questions about competition and price discovery. 4. The duration of the contract is over 2400 days, suggesting a long-term need for these services.
Value Assessment
Rating: questionable
The contract type (Cost Plus Fixed Fee) can lead to higher costs than fixed-price contracts. Without a competitive bidding process, it's difficult to assess if the $69 million price is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, meaning Northrop Grumman was the only source considered. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a significant contract value raises concerns about the efficient use of taxpayer funds.
Public Impact
Ensures continued operational readiness of critical defense assets. Supports high-skilled jobs within the aerospace and defense sector. Potential for increased costs due to sole-source award and cost-plus contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Supports critical defense systems
- Awarded to established defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically related to missile and space systems. Spending in this area is often characterized by high R&D costs and specialized, long-term maintenance needs.
Small Business Impact
There is no indication in the data that small businesses were involved in this contract, either as prime contractors or subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and prevent potential cost overruns. Robust oversight is needed to monitor expenditures under the Cost Plus Fixed Fee structure.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Long contract duration
- Limited transparency on pricing justification
Tags
department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200006!1700!00A018!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003000C0003 !A!*!* !19991206!20000930!001864081!008255408!008255408!N!90099!NORTHROP GRUMMAN CORPORATION !401 E. HENDY AVE !SUNNYVALE !CA!94088!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!0001!+000047730930!N!N!000000000000!J099!MAINT & REPAIR OF EQ/MISCELLANEOUS EQUIPMENT !A2 !MISSILE AND SPACE SYSTEMS !2CNJ!UGM-96 TRIDENT !8711!3!*!*!*!B!A!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!
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 $69.1 million.
What is the period of performance?
Start: 1999-12-06. End: 2006-09-26.
What was the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the contractor. Agencies are expected to conduct market research and negotiate pricing to ensure it is fair and reasonable, even without competition. However, without transparency into this process, it's difficult to confirm the extent of these efforts.
What are the projected cost risks associated with the Cost Plus Fixed Fee contract type for this specific missile system maintenance?
Cost Plus Fixed Fee contracts carry inherent risks of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. For complex systems like Trident, unforeseen technical challenges or material cost increases could significantly inflate the final price beyond initial estimates, impacting the overall value for taxpayers.
How does the long contract duration (over 6 years) impact the government's ability to adapt to technological advancements or changing defense needs?
A long contract duration can create inertia, making it challenging to incorporate new technologies or pivot to evolving defense strategies. While it provides stability for maintenance, it may also lock the government into potentially outdated solutions or prevent leveraging more cost-effective, modern alternatives that emerge during the contract period.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 401 E HENDY RD, SUNNYVALE, CA, 94086
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 1999-12-06
Current End Date: 2006-09-26
Potential End Date: 2006-09-26 00:00:00
Last Modified: 2016-03-01
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