Northrop Grumman awarded $86M contract for fuze systems manufacturing and testing by the Department of the Navy

Contract Overview

Contract Amount: $86,028,221 ($86.0M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2022-10-31

Contract Duration: 1,130 days

Daily Burn Rate: $76.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MANUFACTURING AND TESTING OF FUZE SYSTEMS.

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $86.0 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: MANUFACTURING AND TESTING OF FUZE SYSTEMS. Key points: 1. Contract value of $86 million for fuze systems manufacturing and testing. 2. Awarded to Northrop Grumman Systems Corp, a major defense contractor. 3. The contract is for a period of approximately 3 years. 4. The contract type is Firm Fixed Price, indicating price certainty. 5. Competition was full and open, suggesting a competitive bidding process. 6. The North American Industry Classification System (NAICS) code is 332994 for Small Arms, Ordnance, and Ordnance Accessories Manufacturing. 7. The contract was awarded as a Delivery Order, implying it's part of a larger agreement or program.

Value Assessment

Rating: good

The contract value of $86 million for fuze systems manufacturing and testing appears reasonable given the nature of defense procurement. Benchmarking against similar contracts for ordnance components would provide a more precise value-for-money assessment. The Firm Fixed Price (FFP) contract type helps control costs for the government, as the contractor bears the risk of cost overruns. However, without specific performance metrics or detailed cost breakdowns, a definitive assessment of exceptional value is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically leads to a more robust price discovery process and potentially better pricing for the government. The number of bidders is not specified, but the 'full and open' designation suggests a competitive environment was sought.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation from multiple vendors.

Public Impact

The Department of Defense, specifically the Department of the Navy, benefits from the reliable supply of essential fuze systems. This contract ensures the manufacturing and testing of critical components for ordnance, supporting military readiness. The geographic impact is primarily in West Virginia (st), where the contractor's facility is located. Workforce implications include employment opportunities in manufacturing and testing roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial estimates were inaccurate, despite FFP contract.
Dependence on a single large contractor for critical defense components.
Supply chain disruptions could impact delivery timelines.
Need for ongoing quality assurance to ensure fuze system reliability.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Full and open competition suggests a competitive market was leveraged.
Northrop Grumman is an established defense contractor with relevant experience.
Contract supports critical national defense requirements.

Sector Analysis

The defense manufacturing sector, particularly ordnance production, is characterized by high technical requirements, stringent quality control, and significant government oversight. Contracts in this area often involve complex manufacturing processes and specialized testing. Spending in this sub-sector is driven by military modernization, operational needs, and the replacement of aging inventory. Comparable spending benchmarks would typically be found within the broader 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing' category, with values varying based on the specific item's complexity and volume.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Northrop Grumman Systems Corp is a large defense contractor. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem is therefore likely indirect, potentially through the supply chain if Northrop Grumman engages small businesses as suppliers, but no direct set-aside benefits are evident.

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 places cost risk on the contractor. 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

Department of Defense Ordnance Procurement
Naval Weapons Systems Manufacturing
Defense Industrial Base Support
Firm Fixed Price Contracts
Ordnance Accessories Manufacturing

Risk Flags

Potential for supply chain disruptions.
Ensuring long-term reliability and safety of ordnance components.
Dependence on a single large contractor for critical defense items.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $86.0 million to NORTHROP GRUMMAN SYSTEMS CORP. MANUFACTURING AND TESTING OF FUZE SYSTEMS.

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $86.0 million.

What is the period of performance?

Start: 2019-09-27. End: 2022-10-31.

What is the historical spending pattern for fuze systems manufacturing and testing by the Department of the Navy?

Analyzing historical spending for fuze systems requires access to detailed procurement data beyond this single contract. However, general trends in defense spending indicate consistent investment in ordnance and related components to maintain military readiness and modernize capabilities. The Department of the Navy, as a major branch, regularly procures a wide array of weapon systems and their associated parts, including fuzes. Spending can fluctuate based on geopolitical events, specific program requirements, and budget allocations. Without specific historical data for this particular fuze system or category, it's difficult to establish a precise pattern, but it aligns with the ongoing need for such critical components in naval operations and defense readiness.

How does the awarded amount compare to similar contracts for fuze systems?

A direct comparison of the $86 million award for fuze systems manufacturing and testing to similar contracts is challenging without access to a comprehensive database of comparable procurements. Factors such as the specific type of fuze, the complexity of its design, the required testing protocols, the production volume, and the contractor's overhead contribute to cost variations. Northrop Grumman Systems Corp is a major defense contractor, and their pricing may reflect established capabilities and market position. To benchmark effectively, one would need to identify contracts for fuzes with similar technical specifications, quantities, and contract types (e.g., Firm Fixed Price) awarded around the same period by different branches of the military or allied nations.

What are the key performance indicators (KPIs) associated with this contract?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, typical KPIs for manufacturing and testing contracts in the defense sector include: on-time delivery rates, adherence to quality standards (e.g., defect rates, failure analysis results), compliance with technical specifications, and cost control within the fixed price framework. For fuze systems, reliability and safety are paramount, so rigorous testing and validation against stringent military standards would be critical performance metrics. The government would likely monitor these aspects closely throughout the contract duration to ensure the operational effectiveness and safety of the delivered products.

What is Northrop Grumman Systems Corp's track record with similar defense contracts?

Northrop Grumman Systems Corp has a long-standing and extensive track record as a major defense contractor, involved in a wide array of programs across multiple military branches. They have significant experience in manufacturing complex systems, including ordnance, aerospace components, and electronic warfare systems. Their history includes numerous contracts for the Department of Defense, often involving advanced technology and large-scale production. While specific details on their past performance with fuze systems manufacturing and testing would require a deeper dive into contract databases, their overall profile suggests a substantial capability and experience base relevant to this type of award. Past performance evaluations and contract awards databases would provide more granular insights into their specific successes and challenges.

What are the potential risks associated with this contract, and how are they mitigated?

Potential risks include technical challenges in manufacturing or testing, supply chain disruptions affecting component availability, potential cost overruns (though mitigated by FFP), and ensuring the reliability and safety of the fuze systems. Mitigation strategies typically involve robust quality assurance processes, detailed testing protocols, contingency planning for supply chain issues, and close government oversight. The Firm Fixed Price contract structure itself acts as a risk mitigation tool for the government by placing the financial risk of cost overruns on the contractor. Northrop Grumman's experience and established processes are also key mitigating factors.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001914R0025

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 210 STATE ROUTE 956, ROCKET CENTER, WV, 26726

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: $86,028,221

Exercised Options: $86,028,221

Current Obligation: $86,028,221

Subaward Activity

Number of Subawards: 87

Total Subaward Amount: $21,996,692

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001915D0030

IDV Type: IDC

Timeline