DoD Awards Northrop Grumman $124.6M for Noise Isolators, Lacking Competition
Contract Overview
Contract Amount: $12,460,677 ($12.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-12-08
End Date: 2031-04-17
Contract Duration: 2,687 days
Daily Burn Rate: $4.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NOISE ISOLATOR
Place of Performance
Location: CHARLOTTESVILLE, CHARLOTTESVILLE CITY County, VIRGINIA, 22902
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $12.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: NOISE ISOLATOR Key points: 1. Significant contract value awarded to a single large defense contractor. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Long contract duration (2031) suggests a sustained need for the product. 4. The sector is dominated by a few large players, limiting competitive opportunities.
Value Assessment
Rating: questionable
The contract's firm fixed price structure provides some cost certainty. However, without competitive bidding, it's difficult to assess if the $124.6 million price reflects fair market value or if taxpayers are overpaying for the noise isolators.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may prevent the government from obtaining the best possible pricing through market competition.
Taxpayer Impact: The absence of competition could lead to higher costs for taxpayers, as there is no market pressure to drive down prices.
Public Impact
Naval operations may be impacted if these noise isolators are critical components. Taxpayers bear the cost of this significant sole-source award. Potential for reduced innovation due to lack of competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Sole-Source Award
- Long Contract Duration
Positive Signals
- Firm Fixed Price Contract
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, which is heavily concentrated with large defense contractors. Spending in this area often involves complex, specialized equipment.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a major defense contractor, and there is no indication of small business involvement. This award does not appear to support small business participation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is delivering on terms and pricing is justified, even without competition. Transparency regarding the justification for the sole-source award is crucial.
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
- Lack of Competition
- Sole-Source Award
- Potential for Overpricing
- Long Contract Duration (Risk of Obsolescence)
- Limited Small Business Participation
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 $12.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. NOISE ISOLATOR
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 $12.5 million.
What is the period of performance?
Start: 2023-12-08. End: 2031-04-17.
What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must still conduct market research and negotiate pricing to ensure it is fair and reasonable, often relying on historical data, cost analysis, or independent government cost estimates.
What are the potential risks associated with a long-term, sole-source contract for noise isolators, particularly regarding technological obsolescence or performance degradation?
Long-term sole-source contracts risk technological obsolescence if the technology is not updated or if a superior alternative emerges. Performance degradation is also a concern if maintenance and quality control are not rigorously monitored. The lack of competition can reduce the incentive for the contractor to proactively address these issues.
How does the $124.6 million expenditure for these noise isolators compare to industry benchmarks or previous procurements for similar items, and what is the expected impact on the Department of the Na
Without competitive data, direct benchmarking is challenging. However, the significant value suggests these are critical or highly specialized components. The impact on the Navy's budget will be substantial, necessitating careful financial planning and potentially diverting funds from other priorities if the pricing is not optimized.
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: INSTRUMENTS AND LABORATORY EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1070 SEMINOLE TRL, 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: $12,460,677
Exercised Options: $12,460,677
Current Obligation: $12,460,677
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-12-08
Current End Date: 2031-04-17
Potential End Date: 2031-04-17 00:00:00
Last Modified: 2025-09-23
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