Northrop Grumman awarded $28.9M for M782 artillery ammunition, with delivery through late 2027

Contract Overview

Contract Amount: $28,926,900 ($28.9M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2023-09-07

End Date: 2027-11-30

Contract Duration: 1,545 days

Daily Burn Rate: $18.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR THE M782 MULTI-OPTION FOR ARTILLERY (MOFA)

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: DELIVERY ORDER FOR THE M782 MULTI-OPTION FOR ARTILLERY (MOFA) Key points: 1. Contract value represents a significant investment in critical artillery munitions. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Delivery timeline extends over several years, indicating long-term demand. 5. Focus on ammunition manufacturing highlights a key defense industrial base capability. 6. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, suggesting potential for future task orders.

Value Assessment

Rating: good

The contract value of $28.9 million for M782 artillery ammunition appears reasonable given the nature of defense procurement. Benchmarking against similar contracts for large-caliber ammunition would provide a more precise assessment, but the fixed-price structure generally aims for cost control. The duration of the contract (over 4 years) also suggests a substantial quantity of munitions is being procured, making the overall value justifiable if the unit price is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method of procurement is generally expected to foster competitive pricing and encourage multiple vendors to offer their best terms. The Army's decision to use full and open competition suggests confidence in the market's ability to supply the required ammunition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically leads to more competitive pricing and a wider selection of qualified contractors, potentially driving down costs.

Public Impact

The primary beneficiaries are the U.S. Army, ensuring readiness and operational capability through the supply of essential artillery munitions. The contract delivers M782 Multi-Option for Artillery (MOFA) ammunition, a critical component for various artillery systems. The geographic impact is primarily within West Virginia, where Northrop Grumman Systems Corp. has operations, and potentially extends to the Army's operational theaters. Workforce implications include sustained employment at Northrop Grumman facilities involved in the manufacturing and delivery process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on a single contractor for a critical munition could pose a risk if production issues arise.
Future demand fluctuations could impact the long-term viability of this specific production line.

Positive Signals

Awarded under full and open competition, suggesting a robust market.
Fixed-price contract type provides cost certainty for the government.
Long-term delivery schedule allows for planned production and resource allocation.
Northrop Grumman is an established defense contractor with significant manufacturing experience.

Sector Analysis

The defense sector, specifically the manufacturing of ammunition, is a critical component of national security. This contract falls within the broader industrial base supporting military operations. The market for large-caliber ammunition is often characterized by long production lead times and significant capital investment. Comparable spending benchmarks would typically involve analyzing other contracts for similar munitions awarded by various branches of the U.S. military.

Small Business Impact

The provided data indicates that small business participation (sb) is false for this specific contract. There is no explicit mention of small business set-asides or subcontracting requirements within this delivery order. Therefore, the direct impact on the small business ecosystem appears minimal for this particular award, though Northrop Grumman may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are embedded in the fixed-price contract terms, requiring Northrop Grumman to deliver conforming goods by the specified dates. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Artillery Ammunition Procurement
Department of Defense Munitions Contracts
Northrop Grumman Defense Contracts
M782 Ammunition Program
Army Ammunition Industrial Base

Risk Flags

Potential for supply chain disruptions.
Long-term delivery schedule may be subject to changing military requirements.
Reliance on a single contractor for critical munitions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to NORTHROP GRUMMAN SYSTEMS CORP. DELIVERY ORDER FOR THE M782 MULTI-OPTION FOR ARTILLERY (MOFA)

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 Army).

What is the total obligated amount?

The obligated amount is $28.9 million.

What is the period of performance?

Start: 2023-09-07. End: 2027-11-30.

What is the historical spending trend for M782 ammunition or similar artillery shells by the Department of Defense?

Analyzing historical spending for M782 ammunition or comparable artillery shells requires access to detailed contract databases over multiple fiscal years. Generally, spending on such munitions fluctuates based on operational tempo, inventory levels, and strategic modernization efforts. The Department of Defense often procures these items through multi-year contracts or indefinite-delivery/indefinite-quantity (IDIQ) vehicles to ensure a consistent supply. Factors like geopolitical events, readiness requirements, and budget allocations significantly influence annual spending. Without specific historical data for the M782, it's challenging to pinpoint exact trends, but the consistent need for artillery munitions suggests a stable, albeit variable, demand pattern driven by military readiness and global security concerns.

How does the unit cost of the M782 ammunition compare to other similar artillery munitions procured by the DoD?

A precise unit cost comparison for the M782 ammunition is not directly calculable from the provided data, as the total award amount ($28.9M) covers a quantity of items over a period, not a per-unit price. However, benchmarking against similar large-caliber artillery munitions requires accessing contract awards for comparable items (e.g., 155mm shells) from different manufacturers and agencies. Factors influencing unit cost include material prices, manufacturing complexity, production volume, and the specific contract type (e.g., fixed-price vs. cost-plus). Generally, advanced munitions with specialized fuzing or guidance systems command higher prices. The M782's 'multi-option' capability suggests it may incorporate features that influence its cost relative to simpler projectiles. A thorough comparison would necessitate detailed analysis of publicly available contract data for similar items.

What are the key performance indicators (KPIs) used to evaluate Northrop Grumman's performance on this contract?

Key performance indicators (KPIs) for this contract would likely focus on delivery timeliness, quality of the manufactured ammunition, and adherence to specifications. For a fixed-price contract like this, meeting delivery schedules is paramount. Quality assurance would involve rigorous testing and inspection to ensure the M782 ammunition meets all technical requirements and safety standards. Performance metrics might include on-time delivery rates, defect rates (or conversely, acceptance rates), and compliance with contractual specifications for performance characteristics. The Department of the Army would monitor these KPIs throughout the contract duration, with potential for performance incentives or penalties depending on the specific contract clauses, although these are not detailed in the provided summary.

What is the track record of Northrop Grumman Systems Corp. in delivering large-caliber ammunition to the U.S. military?

Northrop Grumman Systems Corp. has a substantial track record in defense contracting, including the production of various munitions and weapon systems. As a major defense contractor, they possess extensive experience in manufacturing complex military hardware. While specific details on their history with the M782 variant are not provided here, the company is known for its capabilities in areas such as precision guidance, explosives manufacturing, and large-scale production. Their involvement in numerous defense programs suggests a capacity to meet stringent military requirements regarding quality, reliability, and delivery schedules. Past performance evaluations and contract awards databases would offer a more granular view of their specific successes and challenges in delivering similar ammunition types.

Are there any identified risks associated with the production or delivery of the M782 ammunition under this contract?

Potential risks associated with the production and delivery of the M782 ammunition include supply chain vulnerabilities for raw materials or components, potential manufacturing defects, and logistical challenges in transportation and delivery. Given the extended delivery period (through late 2027), market fluctuations in material costs could also pose a risk, although the fixed-price nature of the contract aims to mitigate this for the government. Furthermore, geopolitical events or changes in military requirements could impact demand or necessitate modifications to the ammunition's specifications. Northrop Grumman's established processes and quality control measures are designed to address many of these risks, but unforeseen circumstances can always arise in complex defense manufacturing.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $28,926,900

Exercised Options: $28,926,900

Current Obligation: $28,926,900

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $3,496,116

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J22D0025

IDV Type: IDC

Timeline