DoD's $244M UK Launcher Subsystem Support Contract Awarded to Northrop Grumman
Contract Overview
Contract Amount: $244,335,401 ($244.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2013-10-01
End Date: 2015-09-30
Contract Duration: 729 days
Daily Burn Rate: $335.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY 14 UK LAUNCHER SUBSYSTEM SUPPORT
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94088
Plain-Language Summary
Department of Defense obligated $244.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: FY 14 UK LAUNCHER SUBSYSTEM SUPPORT Key points: 1. Significant contract value of $244.3M for launcher subsystem support. 2. Sole-source award to Northrop Grumman raises questions about competition. 3. Contract duration of 729 days suggests a substantial support period. 4. Engineering services sector, NAICS 541330, indicates specialized technical support.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure can lead to cost overruns if not managed tightly. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for these essential engineering services.
Public Impact
Ensures continued operational readiness of UK launcher systems. Supports critical defense infrastructure and national security objectives. Potential for cost inefficiencies due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus-fixed-fee pricing
- Lack of small business participation indicated
Positive Signals
- Essential support for critical defense systems
- Long-term contract duration
Sector Analysis
This contract falls within the Engineering Services sector, which often involves complex technical support and specialized expertise. Spending benchmarks for such specific subsystem support are highly variable and depend on the system's complexity and criticality.
Small Business Impact
The data does not indicate any specific provisions or awards to small businesses for this contract. Further investigation may be needed to determine if small businesses were subcontracted.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. Accountability for cost management under the CPFF structure is crucial.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus-fixed-fee pricing increases government cost risk.
- Lack of transparency in pricing due to sole-source nature.
- Potential for contractor inefficiencies without competitive pressure.
- No clear indication of small business participation.
Tags
engineering-services, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $244.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. FY 14 UK LAUNCHER SUBSYSTEM SUPPORT
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 $244.3 million.
What is the period of performance?
Start: 2013-10-01. End: 2015-09-30.
What is the justification for the sole-source award, and was a full and open competition truly not feasible?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's difficult to assess the validity of this decision. A thorough review would involve examining the government's market research and justification documents to confirm that competitive options were genuinely explored and found unsuitable.
How does the cost-plus-fixed-fee structure impact the overall value and potential for cost overruns in this contract?
Cost-plus-fixed-fee (CPFF) contracts allow the contractor to recover all allowable costs plus a predetermined fixed fee. While CPFF can be useful for R&D or uncertain scope projects, it shifts much of the cost risk to the government. If the contractor's costs exceed estimates, the government pays more. Effective oversight and robust cost controls are essential to mitigate potential overruns and ensure value.
What is the long-term strategic value of this specific launcher subsystem support contract for the Department of Defense?
The long-term strategic value lies in maintaining the operational readiness and effectiveness of critical UK launcher systems, which are integral to national security and allied defense capabilities. Ensuring uninterrupted support prevents potential degradation of these assets, safeguarding strategic deterrence and response capabilities. The contract's duration suggests a commitment to sustained operational support.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS
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
Address: 401 E HENDY AVE MS 33-3, SUNNYVALE, CA, 94086
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: $251,044,419
Exercised Options: $244,335,401
Current Obligation: $244,335,401
Actual Outlays: $2,177,596
Subaward Activity
Number of Subawards: 6712
Total Subaward Amount: $1,489,622,106
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2013-10-01
Current End Date: 2015-09-30
Potential End Date: 2015-09-30 00:00:00
Last Modified: 2024-09-30
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