DoD awards $30.4M for Peculiar Support Equipment NRE to Northrop Grumman, raising concerns about competition and value
Contract Overview
Contract Amount: $30,431,129 ($30.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-08-07
End Date: 2021-08-02
Contract Duration: 1,091 days
Daily Burn Rate: $27.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PECULIAR SUPPORT EQUIPMENT (PSE) NRE
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $30.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PECULIAR SUPPORT EQUIPMENT (PSE) NRE Key points: 1. Significant contract value for specialized equipment. 2. Sole-source award limits competitive pricing. 3. Long duration may indicate complex or evolving needs. 4. Lack of small business participation noted.
Value Assessment
Rating: questionable
The contract value of $30.4M for NRE is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives for similar specialized support equipment.
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 the best price.
Taxpayer Impact: The lack of competition for a $30.4M contract suggests potential overspending and reduced value for taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. Limited visibility into the specific 'peculiar' nature of the support equipment and its necessity. Potential for cost overruns given the sole-source nature and fixed-price contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- No small business participation
Positive Signals
- Firm fixed price contract type can provide cost certainty if priced appropriately.
Sector Analysis
The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area can be highly specialized, making direct benchmarks challenging, but significant NRE awards warrant scrutiny.
Small Business Impact
The contract data indicates no participation from small businesses. This could be due to the specialized nature of the work or a missed opportunity to foster small business engagement in defense contracting.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that the necessity for this specific vendor is well-documented and justified.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- No small business participation
- Long contract duration (1091 days)
- Potential for cost overruns
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. PECULIAR SUPPORT EQUIPMENT (PSE) NRE
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $30.4 million.
What is the period of performance?
Start: 2018-08-07. End: 2021-08-02.
What is the justification for the sole-source award of $30.4M for Peculiar Support Equipment NRE?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent requirements that only one contractor can meet. Without further details, it's difficult to ascertain the specific rationale. However, such justifications should be rigorously reviewed to prevent unnecessary sole-sourcing.
What are the potential risks associated with a $30.4M sole-source NRE contract for support equipment?
The primary risks include inflated pricing due to lack of competition, potential for scope creep if requirements are not tightly defined, and reduced innovation. The government may overpay for the NRE and subsequent production, and the long duration could mask inefficiencies.
How can the effectiveness of this $30.4M award be measured given the lack of competition?
Effectiveness can be measured by the successful delivery of the peculiar support equipment meeting all specifications and performance requirements within the agreed timeline. Post-delivery performance, reliability, and any downstream cost savings or operational efficiencies gained by the end-user are also key indicators.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MAINT/REPAIR SHOP EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001914R0023
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,431,129
Exercised Options: $30,431,129
Current Obligation: $30,431,129
Subaward Activity
Number of Subawards: 221
Total Subaward Amount: $48,026,111
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001915G0026
IDV Type: BOA
Timeline
Start Date: 2018-08-07
Current End Date: 2021-08-02
Potential End Date: 2021-08-02 00:00:00
Last Modified: 2024-09-26
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