DoD awards $224M contract for special ammunition and weapons systems to Northrop Grumman
Contract Overview
Contract Amount: $223,972,727 ($224.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-01-03
End Date: 2025-06-28
Contract Duration: 542 days
Daily Burn Rate: $413.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: SPECIAL AMMUNITION AND WEAPONS SYSTEMS REQUIREMENTS
Place of Performance
Location: RADFORD, RADFORD CITY County, VIRGINIA, 24141
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $224.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SPECIAL AMMUNITION AND WEAPONS SYSTEMS REQUIREMENTS Key points: 1. Contract value represents a significant investment in specialized ordnance capabilities. 2. Competition dynamics suggest a potentially competitive bidding process for this critical defense need. 3. Contract duration of over 500 days indicates a sustained requirement for these systems. 4. The award to a major defense contractor highlights the complexity and scale of the procurement. 5. Fixed-price contract type aims to provide cost certainty for the government. 6. This procurement aligns with broader defense modernization efforts.
Value Assessment
Rating: good
The contract value of $223.97 million for special ammunition and weapons systems appears reasonable given the specialized nature of the equipment and the contractor's established expertise. Benchmarking against similar, large-scale defense procurements for advanced ordnance suggests that the overall price is within expected ranges. The firm fixed-price structure provides a degree of cost control, though the specific unit costs would require further detailed analysis against market rates for comparable systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of two bids suggests a degree of competition, which is generally favorable for price discovery and ensuring the government receives competitive offers. However, the specific number of bidders and the details of the solicitation process would be needed to fully assess the robustness of the competition.
Taxpayer Impact: Full and open competition, with at least two bidders, generally leads to better pricing for taxpayers by encouraging multiple companies to offer their best terms.
Public Impact
This contract directly supports the operational readiness of the U.S. Army by providing essential ammunition and weapons systems. It ensures that warfighters are equipped with advanced and reliable ordnance for various mission requirements. The contract contributes to the defense industrial base, supporting specialized manufacturing capabilities. Geographic impact is likely concentrated around Northrop Grumman's manufacturing and distribution facilities, with potential downstream effects on supplier locations. Workforce implications include the maintenance and potential expansion of skilled labor in defense manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen technical challenges arise during production.
- Dependence on a single prime contractor for critical, specialized systems.
- Risk of supply chain disruptions impacting timely delivery of components.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Award to an established defense contractor with a proven track record.
- Full and open competition suggests a robust selection process.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on ammunition and weapons systems. The market for such specialized ordnance is characterized by high barriers to entry due to technological complexity, stringent quality requirements, and significant R&D investment. Spending in this area is driven by national security priorities and ongoing military modernization programs. Comparable spending benchmarks would typically involve other large-scale contracts for advanced munitions or weapon platforms awarded by the Department of Defense.
Small Business Impact
The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large prime contract awarded to Northrop Grumman, there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business involvement will depend on the prime contractor's subcontracting plan and the specific components or services required.
Oversight & Accountability
Oversight for this contract will primarily be managed by the Department of the Army, likely through contracting officers and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, performance specifications, and delivery schedules. Transparency is facilitated through contract award announcements and public contract databases, though detailed operational oversight remains within the agency's purview. The Inspector General's office may conduct audits or investigations as deemed necessary.
Related Government Programs
- Department of Defense Ammunition Procurement
- Army Weapons Systems Modernization
- Northrop Grumman Defense Contracts
- Specialized Ordnance Manufacturing
- Defense Industrial Base Support
Risk Flags
- Contract awarded to a single source for a significant portion of the requirement.
- Potential for sole-source follow-on contracts if this system becomes standard.
- Limited number of bidders may indicate market concentration.
Tags
defense, ammunition, weapons-systems, northrop-grumman, department-of-the-army, firm-fixed-price, full-and-open-competition, specialized-ordnance, defense-manufacturing, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $224.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SPECIAL AMMUNITION AND WEAPONS SYSTEMS REQUIREMENTS
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 $224.0 million.
What is the period of performance?
Start: 2024-01-03. End: 2025-06-28.
What is Northrop Grumman's track record with similar ammunition and weapons systems contracts for the Department of Defense?
Northrop Grumman has a long-standing and extensive track record of delivering complex defense systems, including munitions and weapons platforms, to the Department of Defense. The company is a major defense contractor with significant experience in research, development, manufacturing, and sustainment of advanced military hardware. Historically, they have been involved in numerous large-scale contracts for various branches of the U.S. military, often involving sophisticated technologies and stringent performance requirements. While specific past performance on identical systems would require detailed contract history review, their overall profile suggests a capability to meet the demands of this 'SPECIAL AMMUNITION AND WEAPONS SYSTEMS REQUIREMENTS' contract. Their history includes both successes and challenges typical of large defense programs, underscoring the importance of ongoing performance monitoring.
How does the awarded amount of $223.97 million compare to historical spending on similar ammunition and weapons systems by the Department of the Army?
The $223.97 million award represents a substantial investment, but its comparability to historical spending requires context. The Department of the Army procures a wide array of ammunition and weapons systems, ranging from small arms ammunition to large-caliber artillery shells and complex missile systems. Annual spending on such categories can fluctuate significantly based on operational tempo, strategic priorities, and modernization cycles. To benchmark this specific award, one would need to analyze historical spending data for 'SPECIAL AMMUNITION AND WEAPONS SYSTEMS REQUIREMENTS' or closely related North American Industry Classification System (NAICS) codes, such as 'Ammunition (except Small Arms) Manufacturing' (332993). Without direct historical comparisons for this precise category and contract type, it's challenging to definitively state if this amount is high or low. However, given the 'special' nature implied in the contract title, it suggests advanced or niche capabilities, which typically command higher unit costs and overall program values compared to standard munitions.
What are the primary risks associated with this contract, and how are they being mitigated?
Primary risks associated with this contract include potential production delays due to supply chain disruptions or manufacturing complexities, the possibility of cost overruns despite the firm fixed-price structure if unforeseen technical issues arise, and performance risks related to the reliability and effectiveness of the specialized ammunition and weapons systems. Mitigation strategies are likely embedded within the contract's terms and the government's oversight. The firm fixed-price nature incentivizes the contractor to manage costs effectively. The contract duration (542 days) allows for phased production and testing, providing opportunities for early detection of issues. The Department of the Army's program management and quality assurance teams will monitor production progress, conduct inspections, and ensure adherence to specifications. Furthermore, Northrop Grumman's established expertise in defense manufacturing suggests a proactive approach to risk management based on their experience with similar programs.
How effective is the 'full and open competition' approach likely to be in ensuring value for money for this specific procurement?
The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in government procurements. By allowing all responsible sources to submit bids, it fosters a competitive environment where contractors are incentivized to offer their best prices and most innovative solutions to win the contract. In this case, with two bids received, the competition, while present, might not be as robust as if there were numerous bidders. However, the fact that it was competed at all suggests that the market has multiple capable providers for these specialized systems. The effectiveness will ultimately depend on the specific technical requirements, the number of truly capable bidders in the market, and the thoroughness of the evaluation process by the Department of the Army to ensure the selected offer represents the best overall value, considering both price and technical merit.
What are the potential long-term implications of this contract on the defense industrial base and future spending patterns?
This contract, valued at $223.97 million, can have several long-term implications. Firstly, it reinforces the capabilities of Northrop Grumman in the specialized ammunition and weapons systems domain, potentially solidifying their position as a key supplier for such critical defense needs. This can influence future competition by signaling the market's capacity and the government's continued investment in these areas. Secondly, it contributes to the overall health and technological advancement of the defense industrial base by supporting specialized manufacturing processes and potentially driving innovation in ordnance technology. Future spending patterns may be influenced if this contract leads to the adoption of new systems or establishes a baseline cost for similar future procurements. It also highlights the ongoing demand for advanced military hardware, suggesting sustained government investment in defense capabilities.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 415 CONSTITUTION RD BLDG 229, RADFORD, VA, 24141
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: $223,972,727
Exercised Options: $223,972,727
Current Obligation: $223,972,727
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Parent Contract
Parent Award PIID: W52P1J22D0006
IDV Type: IDC
Timeline
Start Date: 2024-01-03
Current End Date: 2025-06-28
Potential End Date: 2025-06-28 12:06:00
Last Modified: 2025-12-08
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