Northrop Grumman awarded $26.3M contract for transducer arrays, with 3 bidders indicating competitive pricing

Contract Overview

Contract Amount: $26,258,180 ($26.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2017-03-31

End Date: 2024-04-30

Contract Duration: 2,587 days

Daily Burn Rate: $10.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TRANSDUCER ARRAY

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21409

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TRANSDUCER ARRAY Key points: 1. Contract value of $26.3M for transducer arrays suggests significant investment in advanced sensor technology. 2. The presence of 3 bidders points to a healthy level of competition for this specialized manufacturing requirement. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The contract duration of over 7 years indicates a long-term need for these components. 5. Northrop Grumman's selection highlights its established position in defense electronics manufacturing. 6. The 'Other Electronic Component Manufacturing' NAICS code suggests a broad application for these transducer arrays.

Value Assessment

Rating: good

The contract value of $26.3 million for transducer arrays appears reasonable given the specialized nature of the components and the long performance period. Benchmarking against similar complex electronic component contracts is challenging without more specific technical details. However, the fixed-price nature of the award suggests an expectation of cost control by the contractor. The number of bidders (3) also implies that pricing was likely competitive, preventing excessive markups.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three distinct bidders vying for the requirement. This level of competition is generally positive, suggesting that multiple capable suppliers were aware of and able to respond to the solicitation. The presence of three bidders indicates that the market is not overly concentrated and that price discovery was likely effective, leading to a more competitive final award price.

Taxpayer Impact: A competitive bidding process for this transducer array contract helps ensure that taxpayer dollars are used efficiently, securing the best possible price for essential defense components.

Public Impact

The Department of the Navy benefits from the acquisition of critical transducer arrays for its operations. These transducer arrays are likely used in advanced sonar systems, surveillance, or other maritime defense applications. The contract supports advanced manufacturing capabilities within the United States, particularly in electronic component production. The workforce implications include skilled labor in engineering, manufacturing, and quality assurance roles at Northrop Grumman and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 7 years) could lead to potential obsolescence issues if technology evolves rapidly.
Reliance on a single prime contractor for a significant duration may limit future flexibility in sourcing or technology upgrades.
The specific application of the transducer arrays is not detailed, which could mask potential performance risks.

Positive Signals

Awarded under full and open competition, indicating a robust market response.
Firm fixed-price contract type provides cost certainty for the government.
Northrop Grumman is a well-established defense contractor with a track record in complex systems.
The contract duration suggests a stable, long-term requirement, allowing for efficient production planning.

Sector Analysis

The market for electronic components, particularly specialized ones like transducer arrays, is a critical segment of the broader defense industrial base. This sector is characterized by high barriers to entry due to R&D costs, specialized manufacturing processes, and stringent quality requirements. Spending in this area is driven by modernization efforts and the need for advanced sensing capabilities in naval and other defense platforms. Comparable spending benchmarks would typically be found within specific defense program budgets for sonar, electronic warfare, or intelligence, surveillance, and reconnaissance (ISR) systems.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, as a large prime contractor, Northrop Grumman may engage small businesses as subcontractors to fulfill portions of this requirement. The extent of small business subcontracting will depend on Northrop Grumman's internal capabilities and their established supply chain relationships. Analysis of subcontracting plans would be necessary to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The firm fixed-price nature of the award simplifies some oversight by focusing on delivery and performance rather than detailed cost accounting. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sonar Systems
Advanced Maritime Surveillance Technology
Defense Electronic Component Manufacturing
Northrop Grumman Defense Contracts
Transducer Technology Development

Risk Flags

Long contract duration may increase risk of obsolescence.
Potential for performance degradation over extended operational life.
Reliance on a single supplier for a critical component.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TRANSDUCER ARRAY

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 $26.3 million.

What is the period of performance?

Start: 2017-03-31. End: 2024-04-30.

What is Northrop Grumman's track record with similar transducer array contracts?

Northrop Grumman Systems Corporation has a long and extensive history of developing and manufacturing complex electronic systems for defense applications, including various types of transducers and sensor arrays. While specific details on prior transducer array contracts of this exact scale and specification are not publicly detailed in this data, the company is a prime contractor on numerous large-scale defense programs that inherently rely on advanced acoustic and electronic components. Their experience spans decades in areas like sonar systems, electronic warfare, and aerospace, suggesting a strong capability to deliver on this contract. Past performance evaluations, often available through government contract databases or agency reports, would provide a more granular view of their success rates, on-time delivery, and quality adherence for similar procurements.

How does the $26.3 million value compare to similar transducer array procurements?

The $26.3 million contract value for transducer arrays, awarded over a period of approximately 7 years, suggests a significant but not exceptionally large procurement in the context of major defense systems. Transducer arrays can range widely in cost depending on their complexity, frequency range, power requirements, and intended application (e.g., sonar, medical imaging, industrial sensing). For naval defense applications, this value appears to be within a reasonable range for specialized, high-performance components. Without knowing the exact technical specifications and quantity, a precise comparison is difficult. However, it is unlikely to be a program-of-record level expenditure but rather a component supply for a specific platform or system upgrade, where costs can range from hundreds of thousands to tens of millions of dollars.

What are the primary risks associated with this contract for the government?

The primary risks associated with this contract include potential technical obsolescence, given the long duration (over 7 years) and the rapid pace of technological advancement in electronics. There's also a risk of performance degradation or failure over the extended operational life, especially in harsh maritime environments. While the firm fixed-price contract mitigates cost overrun risks, it could incentivize the contractor to cut corners on quality if not rigorously overseen. Furthermore, the reliance on a single supplier for a critical component over an extended period could create dependency and limit future sourcing flexibility or the adoption of superior technologies if they emerge.

How effective is the 'full and open competition' approach for this type of specialized component?

The 'full and open competition' approach is generally considered the most effective method for ensuring fair pricing and access to the best available technology, especially for specialized components like transducer arrays. It allows any responsible source to submit an offer, fostering a competitive environment that drives down costs and encourages innovation. With three bidders participating, as indicated, it suggests that the market has multiple capable suppliers, validating the effectiveness of this approach in this instance. This competition helps the government avoid sole-source situations, which can lead to higher prices and reduced innovation, and ensures that the chosen contractor is selected based on a balance of technical merit and cost.

What are historical spending patterns for transducer arrays within the Department of Defense?

Historical spending patterns for transducer arrays within the Department of Defense are typically embedded within larger platform or system procurements, making direct isolation challenging. However, aggregate spending on electronic components, sensors, and sonar systems has consistently been in the billions of dollars annually. The Navy, in particular, invests heavily in acoustic technologies for submarines and surface vessels. Spending on such components is often cyclical, tied to major acquisition programs, modernization efforts, and research and development initiatives. Fluctuations can occur based on geopolitical threats and technological advancements driving the need for improved sensing capabilities. This $26.3M contract represents a specific instance within this broader spending landscape.

What is the significance of the 'Other Electronic Component Manufacturing' NAICS code?

The North American Industry Classification System (NAICS) code 334419, 'Other Electronic Component Manufacturing,' signifies that the products manufactured under this contract do not fall into more specific categories like semiconductors, printed circuit boards, or passive components. Transducer arrays, which convert electrical energy into acoustic energy and vice versa, are complex assemblies that often involve specialized materials, precision engineering, and integration of various electronic elements. This broad classification suggests that the transducer arrays are likely custom-designed or highly specialized, requiring manufacturing capabilities beyond standard electronic parts, and potentially encompassing a range of technologies and applications within the defense sector.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6660416R0095

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 895 OCEANIC DR, ANNAPOLIS, MD, 21409

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: $35,522,227

Exercised Options: $26,488,871

Current Obligation: $26,258,180

Actual Outlays: $447,545

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $136,952,199

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline