DoD awards $17.2M for MK244 APDS ammunition, with potential for future orders under IDIQ

Contract Overview

Contract Amount: $17,246,187 ($17.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-05-28

End Date: 2026-06-30

Contract Duration: 763 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: MK244 ARMOR PIERCING DISCARDING SABOT (APDS) PROCUREMENT ON THE FAMILY BUY 3 IDIQ.

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $17.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MK244 ARMOR PIERCING DISCARDING SABOT (APDS) PROCUREMENT ON THE FAMILY BUY 3 IDIQ. Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for specialized ammunition. 2. Procurement falls under the Family Buy 3 IDIQ, suggesting a framework for ongoing needs. 3. The contract type is Fixed Price with Economic Price Adjustment, which can mitigate inflation risks but requires careful monitoring. 4. Delivery order issued under a broader IDIQ contract indicates a strategic sourcing approach. 5. The North American Industry Classification System (NAICS) code 332993 points to ammunition manufacturing. 6. The contract duration is 763 days, aligning with typical defense procurement timelines.

Value Assessment

Rating: fair

The awarded amount of $17.2 million for MK244 APDS ammunition appears to be a specific delivery order under a larger IDIQ. Without access to the full IDIQ ceiling or historical pricing for this specific munition, a precise value-for-money assessment is challenging. However, the fixed-price with economic price adjustment (FPEPA) contract type suggests an effort to balance cost certainty with potential market fluctuations. Benchmarking against similar ammunition procurements would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation implies that while the initial solicitation was open, specific criteria or circumstances led to the exclusion of certain potential bidders before the final award. The exact reasons for this exclusion are not detailed, but it suggests a more targeted competition than a purely full and open process. The number of bidders is not specified, making it difficult to assess the intensity of competition.

Taxpayer Impact: The limited competition may result in less aggressive pricing compared to a truly open bid scenario, potentially leading to higher costs for taxpayers.

Public Impact

This contract directly supports the U.S. Army's ammunition requirements, ensuring readiness for military operations. The procurement of MK244 APDS ammunition is critical for specific weapon systems requiring this type of projectile. The geographic impact is primarily within the defense supply chain, with potential manufacturing and logistics activities in Minnesota. The contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' in the competition type warrants further investigation to ensure fair market access.
Economic Price Adjustment clauses can lead to cost increases if not carefully managed and monitored.
Reliance on a single IDIQ vehicle (Family Buy 3) could limit future competition if not managed strategically.

Positive Signals

Award to a known defense contractor (Northrop Grumman) suggests a level of established capability and reliability.
The use of an IDIQ contract indicates a planned, long-term relationship for this type of munition.
The fixed-price component of the contract provides some cost control.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The market for specialized munitions is often characterized by a limited number of highly capable contractors due to stringent quality, security, and technological requirements. The Family Buy 3 IDIQ likely represents a strategic approach by the Department of Defense to streamline procurement for a category of related items, potentially consolidating requirements and leveraging existing relationships. Comparable spending benchmarks would typically be found within the broader defense budget allocated to munitions procurement.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from this particular award. The focus is on large prime contractors within the defense industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting command and the Department of Defense's Inspector General. The use of an IDIQ contract suggests established procedures for task order issuance and management. Transparency is facilitated through contract award databases, though detailed justifications for source exclusions may not be publicly available.

Related Government Programs

Family Buy 3 IDIQ
Department of the Army Ammunition Procurement
Defense Industrial Base Ammunition Manufacturing
MK244 Ammunition Systems

Risk Flags

Competition level requires further scrutiny due to 'Exclusion of Sources'.
Economic Price Adjustment clause necessitates ongoing cost monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MK244 ARMOR PIERCING DISCARDING SABOT (APDS) PROCUREMENT ON THE FAMILY BUY 3 IDIQ.

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 $17.2 million.

What is the period of performance?

Start: 2024-05-28. End: 2026-06-30.

What is the historical spending pattern for MK244 APDS ammunition under the Family Buy 3 IDIQ?

As this is a specific delivery order under the Family Buy 3 IDIQ, historical spending patterns for the MK244 APDS ammunition would be reflected in previous delivery orders issued against this IDIQ. Without access to the detailed order history of the Family Buy 3 IDIQ, it is not possible to provide specific historical spending figures for this particular munition. However, the existence of this delivery order suggests a recurring need. To assess historical trends, one would need to analyze all delivery orders placed under the Family Buy 3 IDIQ, filter for MK244 APDS ammunition, and sum the awarded amounts over time. This would reveal the total investment and the frequency of procurement for this item.

How does the pricing of this MK244 APDS ammunition delivery order compare to similar contracts for the same munition?

A direct comparison of pricing for this specific MK244 APDS ammunition delivery order against similar contracts is challenging without access to a broader dataset of comparable procurements. Factors such as quantity, specific technical requirements, delivery timelines, and the competitive landscape at the time of each award significantly influence pricing. The current contract is a Fixed Price with Economic Price Adjustment (FPEPA), which includes provisions for adjusting the price based on economic factors, making direct comparisons to purely fixed-price contracts complex. To perform a robust benchmark, one would need to identify other recent awards for MK244 APDS ammunition, ideally with similar contract types and quantities, and analyze the price per unit or per lot, accounting for any economic adjustments.

What are the primary risks associated with the 'Full and Open Competition After Exclusion of Sources' award type for this ammunition contract?

The primary risk associated with 'Full and Open Competition After Exclusion of Sources' is the potential for reduced competition, which can lead to less favorable pricing for the government. While the initial solicitation may have been open, the subsequent exclusion of specific sources implies that the pool of potential offerors was narrowed based on criteria not fully detailed in the award notice. This could indicate specialized capabilities required, or it might suggest a less robust market for this particular munition. The risk for taxpayers is that the government may not have received the most competitive offers possible, potentially resulting in higher costs than if a broader range of qualified bidders had been allowed to compete fully. Transparency regarding the reasons for exclusion is crucial for assessing this risk.

What is Northrop Grumman's track record in supplying ammunition to the Department of Defense?

Northrop Grumman Systems Corporation is a major defense contractor with a significant history of supplying various defense systems and components to the Department of Defense. While their expertise spans a wide range of areas, including aerospace and defense electronics, their specific track record in ammunition manufacturing, particularly for specialized munitions like the MK244 APDS, would require a detailed review of their contract history. This would involve examining past awards for similar munitions, their performance ratings on those contracts, and any history of quality issues or delivery delays. Generally, large, established contractors like Northrop Grumman are expected to meet stringent performance and quality standards required by the DoD.

How does the duration of this contract (763 days) align with typical defense procurement cycles for ammunition?

A contract duration of 763 days, approximately two years, is generally within the typical range for defense procurement of complex or specialized items like ammunition. Ammunition production often involves lengthy manufacturing processes, quality assurance testing, and logistical considerations. The duration reflects the time needed for Northrop Grumman to produce and deliver the specified quantities of MK244 APDS ammunition. This timeframe allows for planning, production ramp-up, and delivery schedules that align with the Department of the Army's operational needs. Shorter durations might be feasible for simpler items or off-the-shelf components, while longer durations might be associated with research, development, or large-scale, multi-year production efforts.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W519TC23R0004

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 4700 NATHAN LN N, MINNEAPOLIS, MN, 55442

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: $17,246,187

Exercised Options: $17,246,187

Current Obligation: $17,246,187

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $7,378,863

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC24D0007

IDV Type: IDC

Timeline