DoD Awards $24.6M Contract for Electronic Components to Northrop Grumman, Sole-Source
Contract Overview
Contract Amount: $24,648,939 ($24.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-12-04
End Date: 2026-12-31
Contract Duration: 392 days
Daily Burn Rate: $62.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: B1 LOA
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $24.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: B1 LOA Key points: 1. Significant award to a major defense contractor. 2. Sole-source nature raises questions about price discovery and competition. 3. Long contract duration suggests a need for ongoing component supply. 4. Focus on electronic components highlights a critical defense sector.
Value Assessment
Rating: questionable
The award value of $24.6 million is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar electronic components. Benchmarking against other sole-source awards or open-market prices would be necessary.
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 as there is no competitive pressure to drive down prices. The justification for sole-source is critical.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible price for these electronic components, potentially leading to overspending.
Public Impact
Ensures continued supply of critical electronic components for defense systems. Potential for higher costs due to lack of competitive bidding. Supports a major defense contractor, impacting the defense industrial base. Long-term contract (2 years) indicates sustained demand.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Lack of small business participation noted.
- Contract duration is relatively long.
Positive Signals
- Award ensures critical component supply.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract falls under the 'Other Electronic Component Manufacturing' sector, a vital part of the defense industrial base. Spending in this area is crucial for maintaining technological superiority and operational readiness of military systems.
Small Business Impact
The data indicates no small business participation in this contract. Efforts to include small businesses in the supply chain for defense components should be explored to foster broader economic impact and innovation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price is fair and reasonable. The Defense Logistics Agency should have robust justification and review processes in place for such awards.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award
- Lack of competition
- No small business participation
- Potential for inflated pricing
- Long contract duration may indicate lack of market alternatives
Tags
other-electronic-component-manufacturing, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. B1 LOA
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 Logistics Agency).
What is the total obligated amount?
The obligated amount is $24.6 million.
What is the period of performance?
Start: 2025-12-04. End: 2026-12-31.
What is the specific justification for awarding this contract on a sole-source basis, and has it been adequately reviewed?
The justification for a sole-source award is critical for understanding why competition was not pursued. This could be due to unique capabilities, proprietary technology, or urgent needs. A thorough review process by the agency is essential to ensure the government is not disadvantaged and that the price is fair and reasonable, especially given the significant award amount.
How does the awarded price compare to industry benchmarks for similar electronic components, especially considering the lack of competition?
Without competitive bids, assessing the price's fairness is challenging. A comparison against established industry benchmarks, historical pricing for similar components, or prices paid by other government agencies for comparable items is necessary. The agency should have performed or should perform a price analysis to validate the $24.6 million award.
What is the potential impact on defense readiness if the supply chain for these specific electronic components is disrupted, and how does this contract mitigate that risk?
These electronic components are likely critical for various defense systems. This contract, with its two-year duration, aims to ensure a stable supply, thereby mitigating disruption risks. However, sole-sourcing can sometimes create dependencies; understanding the broader supply chain resilience and alternative sources is important for long-term readiness.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: SPRHA122R7999
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 7575 COLSHIRE DR TOWER 1, MCLEAN, VA, 22102
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: $24,648,939
Exercised Options: $24,648,939
Current Obligation: $24,648,939
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPRHA124D0001
IDV Type: IDC
Timeline
Start Date: 2025-12-04
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2025-12-04
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