DoD Awards Northrop Grumman $78.4M for Communications Equipment, Lacking Competition
Contract Overview
Contract Amount: $166,370,762 ($166.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2006-08-22
End Date: 2009-02-27
Contract Duration: 920 days
Daily Burn Rate: $180.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: 200611!005508!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CL010 !A!N! !N! ! !20060822!20080630!784127763!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A W NURSERY ROAD !LINTHICUM HEIG !MD!21090!47150!003!24!LINTHICUM HEIGHTS !ANNE ARUNDEL !MARYLAND !+000073999589!N!N!000000000000!5965!HEADSETS, HANDSETS, MICROPHONES & SPEAKERS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334290!E! !3! ! ! ! ! !99990909!B! ! !N!A!D!N!J!1!001!N!2A!A!W!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $166.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200611!005508!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CL010 !A!N! !N! ! !20060822!20080630!784127763!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A W NURSERY ROAD !LINTHICUM HEIG !MD!21090!47150!003!24!LINTHICUM HEIGHTS !ANNE… Key points: 1. Contract awarded to Northrop Grumman for $78.4 million for communications equipment. 2. The contract was not competed, raising concerns about price discovery and value. 3. The item procured is 'HEADSETS, HANDSETS, MICROPHONES & SPEAKERS', a niche electronic component. 4. The award period spans from August 2006 to February 2009, with a duration of 920 days. 5. Northrop Grumman is a major defense contractor, indicating a potentially large incumbent.
Value Assessment
Rating: questionable
The contract value of $78.4 million for specialized communications equipment is significant. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was 'NOT COMPETED', indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition suggests that taxpayers may have paid a premium for this equipment, as the government did not explore alternative vendors or negotiate based on multiple bids.
Public Impact
Military personnel may receive specialized communication devices, impacting their operational effectiveness. The significant contract value could divert funds from other potential defense procurements. The sole-source nature of the award might stifle innovation from smaller, competing firms in the communications equipment sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Limited transparency in price negotiation
Positive Signals
- Procurement of essential communication equipment
- Award to a known, established contractor
Sector Analysis
This contract falls within the 'Electronics and Communication Equipment' sector. Spending in this area is crucial for military operations, but competitive bidding is vital to ensure cost-effectiveness given the specialized nature of the products.
Small Business Impact
The data does not indicate any specific set-aside for small businesses. Given the sole-source nature and the prime contractor, it's unlikely that small businesses were significantly involved in this specific award, potentially missing opportunities.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to understand the justification for avoiding a competitive process. Accountability for the pricing and justification of the sole-source award is crucial.
Related Government Programs
- Other Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Potential for inflated costs due to lack of competition.
- Limited transparency on justification for sole-source.
- Dependency on a single contractor for critical equipment.
Tags
other-communications-equipment-manufactu, department-of-defense, md, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $166.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200611!005508!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CL010 !A!N! !N! ! !20060822!20080630!784127763!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!1580A W NURSERY ROAD !LINTHICUM HEIG !MD!21090!47150!003!24!LINTHICUM HEIGHTS !ANNE ARUNDEL !MARYLAND !+000073999589!N!N!000000000000!5965!HEADSETS, HANDSETS, MICROPHONES & SPEAKERS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334290!E! !3! ! ! ! ! !999
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 Army).
What is the total obligated amount?
The obligated amount is $166.4 million.
What is the period of performance?
Start: 2006-08-22. End: 2009-02-27.
What was the specific justification for awarding this contract on a sole-source basis, and was a market research conducted to confirm no other vendors could meet the requirements?
The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require access to the contract file to ascertain the specific justification, such as a critical need, proprietary technology, or lack of viable alternatives. Without this, it's difficult to assess the validity of foregoing competition and its impact on value for money.
How does the unit cost of these specialized headsets, handsets, microphones, and speakers compare to industry benchmarks, especially considering the lack of competitive pricing?
Benchmarking the unit cost is challenging without specific unit pricing data and detailed specifications. However, given the sole-source nature, the price is likely higher than if multiple bids were solicited. Further analysis would require comparing the total contract value and quantity to similar, competitively procured items in the defense or commercial markets.
What is the potential risk to operational effectiveness if this sole-source supplier faces disruptions, and were contingency plans considered during the award?
A sole-source award inherently increases risk related to supply chain disruptions. If Northrop Grumman faces production issues, the Department of Defense has limited immediate alternatives. Contingency planning, such as requiring Northrop Grumman to identify critical sub-suppliers or maintain specific inventory levels, would be crucial for mitigating this risk.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing
Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 1580A W NURSERY ROAD, LINTHICUM HEIG, MD
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2006-08-22
Current End Date: 2009-02-27
Potential End Date: 2009-02-27 00:00:00
Last Modified: 2011-01-14
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