DoD awards $24.3M for radio equipment to Northrop Grumman, a sole-source contract

Contract Overview

Contract Amount: $24,335,192 ($24.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-07-26

End Date: 2025-09-15

Contract Duration: 782 days

Daily Burn Rate: $31.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONVERTER,FREQUENCY

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: CONVERTER,FREQUENCY Key points: 1. Contract awarded on a sole-source basis, raising questions about price competitiveness. 2. Duration of over two years suggests a need for sustained radio equipment supply. 3. Fixed-price contract type aims to control costs, but initial pricing needs scrutiny. 4. Awarded by the Department of the Navy, indicating a specific defense requirement. 5. Northrop Grumman's established presence in defense contracting suggests technical capability. 6. The contract's value is moderate within the context of large defense procurements.

Value Assessment

Rating: fair

The contract value of $24.3 million for radio equipment appears moderate. Without specific details on the type and quantity of equipment, direct comparison to similar contracts is challenging. However, sole-source awards often carry a premium compared to competitively bid contracts. Benchmarking the per-unit cost against market rates or similar government procurements would be essential to assess true value for money. The firm fixed-price structure provides some cost certainty, but the absence of competition limits the government's ability to negotiate the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, technology, or when urgency dictates a rapid award. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces. This approach can sometimes lead to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the lowest possible prices, potentially resulting in higher expenditures for taxpayers compared to competitively sourced contracts.

Public Impact

The Department of the Navy benefits from the acquisition of essential radio communication equipment. This contract supports the operational readiness and communication capabilities of naval forces. The primary beneficiaries are military personnel who rely on this equipment for secure and effective communication. The contract's geographic impact is likely concentrated around naval bases or operational areas where the equipment is deployed. Workforce implications may include manufacturing, installation, and maintenance roles, potentially within Northrop Grumman or its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Lack of competition may indicate a reliance on a single supplier, posing a future risk.
The contract duration and value warrant close monitoring for performance and adherence to budget.

Positive Signals

Firm fixed-price contract type provides cost predictability.
Northrop Grumman is a large, established defense contractor with a track record.
Awarded by a major defense agency (DoD), suggesting alignment with critical national security needs.

Sector Analysis

The radio and television broadcasting and wireless communications equipment manufacturing sector (NAICS 334220) is critical for defense communications. This contract falls within the broader defense industrial base, where specialized communication systems are essential for military operations. Spending in this sector can vary significantly based on technological advancements and specific military requirements. Comparable spending benchmarks would typically be found within other large sole-source or competitively awarded contracts for similar defense communication hardware.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Northrop Grumman voluntarily engages small businesses in its supply chain. Further analysis would be needed to determine if subcontracting opportunities exist.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense procurements
Naval communication systems
Wireless communication equipment
Defense contractor awards

Risk Flags

Sole-source award
Potential for overpricing
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. CONVERTER,FREQUENCY

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 $24.3 million.

What is the period of performance?

Start: 2023-07-26. End: 2025-09-15.

What is Northrop Grumman's track record with sole-source defense contracts of similar value?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various sole-source and competitively awarded contracts. Analyzing their historical performance on sole-source awards of similar magnitude (e.g., $10M-$50M) for communication equipment would provide insight into their reliability and pricing tendencies. Past performance data, if available through government databases like the Federal Procurement Data System (FPDS) or Contractor Performance Assessment Reporting System (CPARS), could reveal patterns in delivery timeliness, quality, and cost overruns. Without specific historical data points for this exact type of equipment and contract structure, it's difficult to definitively assess their track record for this specific award, but their overall size and scope suggest a capacity to handle such procurements.

How does the $24.3 million value compare to typical government spending on similar radio equipment?

The $24.3 million contract value for radio equipment is a moderate sum within the context of large federal procurements, particularly for defense applications. To benchmark this value effectively, one would need to compare it against similar contracts for specialized military-grade radio systems, considering factors like quantity, technical specifications, and intended use (e.g., tactical communications, strategic networks). Government databases like FPDS can be queried for comparable awards. However, the sole-source nature of this award means it may not represent the lowest possible market price. If this contract is for a standard type of radio equipment, the price per unit could be higher than if it were competitively bid. Conversely, if it involves highly specialized or proprietary technology, the price might be justified.

What are the primary risks associated with this sole-source award?

The primary risk associated with this sole-source award is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may not be achieving the best possible value for taxpayer dollars. Another risk is vendor lock-in; if Northrop Grumman is the only provider of this specific radio technology, the government may be dependent on them for future upgrades, maintenance, and spare parts, potentially at non-competitive prices. There's also a risk related to performance; while Northrop Grumman is a large contractor, any sole-source award warrants careful monitoring to ensure timely delivery and adherence to quality standards. Finally, the justification for the sole-source award itself needs to be robust to ensure it was truly necessary and not an administrative convenience.

What is the expected program effectiveness and impact of this radio equipment acquisition?

The expected program effectiveness hinges on the radio equipment meeting the Department of the Navy's specific operational requirements for secure and reliable communication. If the equipment performs as specified, it will enhance the Navy's ability to conduct missions, coordinate forces, and maintain situational awareness. The impact is primarily on military readiness and operational capability. The effectiveness will be measured by factors such as signal clarity, range, security features, durability in harsh environments, and interoperability with existing systems. Successful deployment should lead to improved command and control, contributing to the overall mission success of naval operations.

How does this contract fit into historical spending patterns for radio equipment by the Department of Defense?

This $24.3 million contract represents a single instance of spending within the broader historical context of the Department of Defense's (DoD) significant investments in communication systems. The DoD consistently spends billions annually on a wide array of communication technologies, including radios, satellite systems, and network infrastructure. Analyzing historical spending data for similar radio equipment procurements by the Navy or other DoD branches would reveal trends in contract values, types (sole-source vs. competitive), and key contractors. This specific award, being sole-source and of moderate value, might be part of a larger, ongoing modernization effort or a specific tactical requirement. Its significance in historical patterns depends on whether it's a unique acquisition or part of a recurring need for this type of equipment.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038322RP556

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090

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: $24,335,192

Exercised Options: $24,335,192

Current Obligation: $24,335,192

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $24,974

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038321GZJ01

IDV Type: BOA

Timeline