DoD Awards Northrop Grumman $179M for Inertial Measuring Units, Ending 2030
Contract Overview
Contract Amount: $17,925,512 ($17.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-09-20
End Date: 2030-06-03
Contract Duration: 2,082 days
Daily Burn Rate: $8.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: INERTIAL MEASURING
Place of Performance
Location: CHARLOTTESVILLE, ALBEMARLE County, VIRGINIA, 22901
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $17.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: INERTIAL MEASURING Key points: 1. Significant contract value of $179.2M awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Long contract duration (2082 days) may not align with rapid technological advancements. 4. Sector focus on navigation systems is critical for defense operations.
Value Assessment
Rating: questionable
The contract value of $179.2M for inertial measuring units appears high given the lack of competition. Benchmarking against similar contracts is difficult without more data, but the sole-source nature suggests potential for inflated pricing.
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 potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers compared to a fully competed contract.
Public Impact
Taxpayers may be overpaying for essential navigation components due to the sole-source award. Reliance on a single contractor for critical inertial measuring units poses a supply chain risk. Limited visibility into the pricing justification for this substantial award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
- No small business participation indicated
Positive Signals
- Critical defense system component
- Definitive contract type
- Clear end date
Sector Analysis
This contract falls within the Navigation, Guidance, and Control Systems manufacturing sector, a critical area for defense. Spending benchmarks for such specialized components are often opaque, but large sole-source awards warrant scrutiny.
Small Business Impact
The data indicates no small business participation in this contract. Given the sole-source nature and the prime contractor's size, opportunities for small businesses to subcontract or participate were likely minimal.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and performance. Transparency regarding the justification for not competing the contract 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
- Sole-source award
- Lack of competition
- Potential for overpricing
- No small business participation
- Long contract duration
- Supply chain risk
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 $17.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. INERTIAL MEASURING
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 $17.9 million.
What is the period of performance?
Start: 2024-09-20. End: 2030-06-03.
What is 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, proprietary technology, or urgent needs that cannot be met by other sources. The Department of Defense should have conducted a price analysis, potentially using historical data or cost breakdowns, to ensure the negotiated price was fair and reasonable, despite the lack of competition.
What are the potential risks associated with a sole-source contract for critical navigation systems, particularly concerning supply chain and technological obsolescence?
A sole-source contract for critical navigation systems creates a significant dependency on a single supplier, increasing supply chain vulnerability. If the contractor faces production issues or goes out of business, the DoD could face severe disruptions. Furthermore, without competitive pressure, there's less incentive for the contractor to innovate, potentially leading to technological obsolescence over the contract's long duration.
How does the $179M contract value compare to industry benchmarks for similar inertial measuring units, and what is the estimated taxpayer impact of the non-competitive award?
Without specific technical details and market data, a precise benchmark is challenging. However, $179M for inertial measuring units over approximately six years is substantial. The taxpayer impact of the non-competitive award is likely an increased cost, as sole-source contracts typically lack the price reductions achieved through competitive bidding processes.
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: $17,925,512
Exercised Options: $17,925,512
Current Obligation: $17,925,512
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-09-20
Current End Date: 2030-06-03
Potential End Date: 2030-06-03 00:00:00
Last Modified: 2025-03-26
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