DoD Awards Northrop Grumman $49.5M for 25MM M910 Cartridges Amidst Full and Open Competition
Contract Overview
Contract Amount: $49,450,586 ($49.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-05-29
End Date: 2027-06-30
Contract Duration: 1,127 days
Daily Burn Rate: $43.9K/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: 25MM M910 CARTRIDGE, NSN: 1305-01-426-4359
Place of Performance
Location: RADFORD, RADFORD CITY County, VIRGINIA, 24143
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $49.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 25MM M910 CARTRIDGE, NSN: 1305-01-426-4359 Key points: 1. Significant award to a major defense contractor for essential ammunition. 2. Competition method indicates a structured procurement process. 3. Potential for price fluctuations due to economic price adjustment. 4. Spending falls within the Ammunition Manufacturing sector.
Value Assessment
Rating: good
The contract's fixed price with economic price adjustment suggests a balance between cost control and market volatility. Benchmarking against similar ammunition contracts would be necessary for a definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a competitive process was initiated, but specific sources were excluded. This method aims for best value while potentially limiting the initial bidder pool.
Taxpayer Impact: The use of full and open competition generally benefits taxpayers by fostering competitive pricing. However, the exclusion of sources warrants scrutiny to ensure no undue cost increases.
Public Impact
Ensures continued supply of critical ammunition for military operations. Supports a major defense contractor and its supply chain. Potential impact on readiness if supply is disrupted. Economic price adjustment could lead to higher costs for taxpayers over time.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause introduces cost uncertainty.
- Exclusion of sources in competition needs further clarification.
- Long contract duration (over 3 years) may not reflect current market prices.
Positive Signals
- Full and open competition methodology is generally favorable.
- Award to established contractor suggests reliability.
- Clear delivery schedule outlined.
Sector Analysis
This contract falls under the Ammunition (except Small Arms) Manufacturing sector, a critical component of defense spending. Benchmarks for similar large-scale ammunition procurements would provide further context on cost-effectiveness.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large business. Analysis of subcontracting opportunities for small businesses within this award is not provided but is a standard area for oversight.
Oversight & Accountability
The Department of the Army is the procuring agency, with the Department of Defense overseeing overall defense spending. Oversight would focus on contract performance, adherence to terms, and management of the economic price adjustment.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to economic price adjustment.
- Lack of transparency regarding excluded sources in competition.
- Long-term contract duration may not capture market efficiencies.
- No clear indication of small business subcontracting goals.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $49.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 25MM M910 CARTRIDGE, NSN: 1305-01-426-4359
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 $49.5 million.
What is the period of performance?
Start: 2024-05-29. End: 2027-06-30.
What is the specific justification for excluding certain sources in the 'full and open competition after exclusion of sources' method?
The justification for excluding sources typically relates to specialized capabilities, existing security clearances, proprietary technology, or urgent needs that only specific contractors can meet within the required timeframe. A thorough review of the contract documentation would reveal the precise reasons cited by the Department of the Army for this exclusion.
How will the economic price adjustment clause impact the final cost of the M910 cartridges over the contract's duration?
The economic price adjustment clause allows for modifications to the contract price based on fluctuations in specified economic factors, such as labor costs, material prices, or inflation indices. The actual impact on the final cost will depend on the volatility of these underlying economic indicators throughout the contract period and the specific formula used for adjustment.
What is the projected unit cost of the M910 cartridge based on this award, and how does it compare to industry benchmarks?
With a total award of $49,450,585.74 for an unspecified quantity of 25MM M910 Cartridges (implied by the NSN and contract value), the average unit cost is approximately $1,830,000 per cartridge if the '25MM' refers to the quantity. However, '25MM' likely refers to the caliber. Assuming the 'no': 2 refers to the number of delivery orders, and the total value is for all units, a precise unit cost cannot be determined without the total quantity. If '25MM' is the caliber, and assuming a large quantity, the unit cost would be significantly lower. A precise unit cost benchmark requires the total quantity procured.
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
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: $49,450,586
Exercised Options: $49,450,586
Current Obligation: $49,450,586
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $5,864,058
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
Start Date: 2024-05-29
Current End Date: 2027-06-30
Potential End Date: 2027-06-30 12:06:00
Last Modified: 2025-12-09
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