DoD's $236M contract for UK ULS Support awarded to Northrop Grumman faces scrutiny over competition
Contract Overview
Contract Amount: $236,169,838 ($236.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2020-10-01
End Date: 2024-04-19
Contract Duration: 1,296 days
Daily Burn Rate: $182.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: UK ULS SUPPORT
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94086
Plain-Language Summary
Department of Defense obligated $236.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: UK ULS SUPPORT Key points: 1. Significant spending on engineering services for naval support. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Potential for taxpayer savings if better price discovery was achieved. 4. Contract duration extends over multiple years, impacting long-term value.
Value Assessment
Rating: questionable
The contract's value of $236M over its period is substantial. Benchmarking against similar engineering services contracts, especially those competed, is crucial to assess if this price reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition suggests potential overpayment, meaning taxpayers may not be receiving the best value for their investment in these critical support services.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The long-term commitment to a single provider could stifle innovation. Dependence on one contractor for essential support services poses a risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Long contract duration
- Sole-source award
Positive Signals
- Established contractor
- Definitive contract type
Sector Analysis
This contract falls under Engineering Services, a broad category. The $236M spend is significant and warrants comparison to industry benchmarks for similar defense support services to ensure cost-effectiveness.
Small Business Impact
The contract data does not indicate any subcontracting to small businesses. Further analysis is needed to determine if small business participation was considered or required.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight to ensure performance standards are met and costs are reasonable. Accountability for the lack of competition should be reviewed.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Long contract duration may not reflect current market conditions.
- Lack of transparency in the procurement process.
- No 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 $236.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. UK ULS 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 $236.2 million.
What is the period of performance?
Start: 2020-10-01. End: 2024-04-19.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies explored?
The justification for a sole-source award is critical. Agencies must demonstrate that only one responsible source can provide the required services. Without this, competitive processes are typically mandated to ensure fair pricing and maximize value for taxpayers. Exploring alternatives, even if ultimately deemed unsuitable, is a key part of responsible procurement.
How does the pricing structure and overall cost compare to similar engineering support contracts awarded competitively?
Comparing this contract's pricing to competitively awarded contracts for similar engineering services is essential for value assessment. If this sole-source contract's costs are significantly higher, it indicates a potential loss of taxpayer funds due to the lack of market competition and price discovery.
What are the risks associated with a long-term, sole-source contract for critical support services, particularly regarding performance and future adaptability?
Long-term sole-source contracts carry risks such as vendor lock-in, potential complacency in performance, and reduced flexibility to adapt to changing technological needs or strategic priorities. This can lead to suboptimal service delivery and increased costs over time compared to a more dynamic, competitive environment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0003021R0010
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $263,933,053
Exercised Options: $240,426,506
Current Obligation: $236,169,838
Actual Outlays: $104,462
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $450,666
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-10-01
Current End Date: 2024-04-19
Potential End Date: 2024-04-19 00:00:00
Last Modified: 2025-09-15
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