DoD's $25.5M H1 System Configuration contract awarded to Northrop Grumman without competition
Contract Overview
Contract Amount: $25,512,392 ($25.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-02-15
End Date: 2020-02-24
Contract Duration: 374 days
Daily Burn Rate: $68.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: H1 SYSTEM CONFIGURATION SETS
Place of Performance
Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367
Plain-Language Summary
Department of Defense obligated $25.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: H1 SYSTEM CONFIGURATION SETS Key points: 1. Significant spending on a specialized system configuration. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Potential for cost overruns given the Cost Plus Fixed Fee contract type. 4. The sector is critical for defense navigation and guidance systems.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a definitive value assessment difficult. The awarded amount of $25.5M for a 374-day duration needs further benchmarking against similar specialized system configurations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for this system configuration.
Public Impact
Impacts military readiness by providing essential navigation and guidance systems. Supports a major defense contractor, potentially influencing market dynamics. Raises questions about the government's procurement strategy for specialized systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract
- Lack of transparency in pricing
Positive Signals
- Critical system for defense operations
- Awarded to a known defense contractor
Sector Analysis
This contract falls within the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. Spending in this area is crucial for national security, but often involves high R&D costs and specialized expertise, making competition challenging.
Small Business Impact
The award to Northrop Grumman, a large defense contractor, suggests no direct benefit or opportunity for small businesses in this specific contract. Further analysis would be needed to determine if subcontractors involved are small businesses.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective delivery. Accountability for cost management under the Cost Plus Fixed Fee structure is paramount.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source procurement
- Cost Plus Fixed Fee contract type
- Potential for limited price competition
- Lack of transparency on justification for sole-source award
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 $25.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. H1 SYSTEM CONFIGURATION SETS
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 $25.5 million.
What is the period of performance?
Start: 2019-02-15. End: 2020-02-24.
What was the justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only a specific contractor can meet. Without detailed documentation, it's difficult to ascertain if alternatives were thoroughly explored or if the justification was robust enough to preclude competition, potentially impacting overall value for taxpayer funds.
How does the Cost Plus Fixed Fee structure impact cost control and potential for overruns in this contract?
Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fee, which is a percentage of the total cost. This structure requires stringent oversight to manage expenditures and prevent cost overruns. The government must actively monitor expenses to ensure the fixed fee remains appropriate and the total cost stays within reasonable bounds.
What is the long-term strategic value of this specific system configuration, and are there plans for future competitive procurements?
The long-term strategic value hinges on the system's role in national defense capabilities, particularly in navigation and guidance. Understanding future procurement plans is crucial; if this is a one-time need, the sole-source award might be justifiable. However, if it's part of an ongoing program, the lack of competition raises concerns about sustained cost-effectiveness and innovation.
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: $26,056,273
Exercised Options: $26,056,273
Current Obligation: $25,512,392
Subaward Activity
Number of Subawards: 20
Total Subaward Amount: $1,493,313
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: 2019-02-15
Current End Date: 2020-02-24
Potential End Date: 2020-02-24 00:00:00
Last Modified: 2025-04-18
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