DoD awards $13.46M to Northrop Grumman for system configuration, raising concerns about competition
Contract Overview
Contract Amount: $13,458,144 ($13.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-02-05
End Date: 2019-09-30
Contract Duration: 602 days
Daily Burn Rate: $22.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SYSTEM CONFIGURATION SETS IGF::OT::IGF
Place of Performance
Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367
Plain-Language Summary
Department of Defense obligated $13.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SYSTEM CONFIGURATION SETS IGF::OT::IGF Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises questions about price. 3. Potential for cost overruns with Cost Plus Fixed Fee contract. 4. Sector is critical for national defense capabilities.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a lack of competition, suggests potential for higher-than-necessary costs. Benchmarking against similar contracts is difficult without competitive data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition likely resulted in a higher price than could have been achieved through a competitive bidding process.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding. The specific system configuration is vital for defense operations. Reliance on a single contractor could impact future innovation and pricing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Limited transparency on pricing justification
Positive Signals
- Award to established contractor with relevant expertise
- Contract supports critical defense systems
Sector Analysis
This contract falls within the Defense sector, specifically instrument manufacturing. Spending in this area is often characterized by high R&D costs and long procurement cycles, with significant government oversight required.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This award went directly to a large, established defense corporation.
Oversight & Accountability
The lack of competition warrants closer scrutiny from oversight bodies to ensure the price paid was fair and reasonable. The contract type also necessitates robust monitoring to control costs.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for price inflation
- Limited small business participation
- Long contract duration (602 days)
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SYSTEM CONFIGURATION SETS IGF::OT::IGF
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 $13.5 million.
What is the period of performance?
Start: 2018-02-05. End: 2019-09-30.
What was the justification for awarding this contract on a sole-source basis, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Price reasonableness is usually assessed through cost analysis, comparison to previous contracts, or market research. Without detailed documentation, it's difficult to ascertain the specific methods used and their effectiveness in this case.
What are the risks associated with a sole-source, cost-plus fixed fee contract for critical defense systems?
Sole-source contracts eliminate competitive pressure, potentially leading to inflated prices and reduced innovation. Cost-plus contracts shift some financial risk to the government, increasing the potential for cost overruns if not managed diligently. For critical systems, this combination can result in significant taxpayer expense and potential vulnerabilities if the contractor underperforms.
How does this award impact the overall effectiveness and cost-efficiency of the Department of Defense's procurement strategy in this specific system area?
A sole-source award for a critical system may indicate a lack of market competition or a strategic decision to rely on a specific provider. While potentially ensuring continuity, it can reduce cost-efficiency and limit opportunities for technological advancement through broader market engagement. This specific instance suggests a potential area for improvement in procurement strategy to foster competition.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6893613R0055
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 91367
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: $13,519,929
Exercised Options: $13,519,929
Current Obligation: $13,458,144
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $598,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6893615D0013
IDV Type: IDC
Timeline
Start Date: 2018-02-05
Current End Date: 2019-09-30
Potential End Date: 2019-09-30 00:00:00
Last Modified: 2026-02-11
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