DoD Awards Northrop Grumman $37.17M for XM1173 TP-T Cartridges
Contract Overview
Contract Amount: $37,167,805 ($37.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-08-28
End Date: 2028-07-31
Contract Duration: 1,433 days
Daily Burn Rate: $25.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 30MM XM1173 TP-T CARTRIDGE AWARD
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442
Plain-Language Summary
Department of Defense obligated $37.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 30MM XM1173 TP-T CARTRIDGE AWARD Key points: 1. Significant award for ammunition manufacturing, highlighting defense sector spending. 2. Northrop Grumman secures a substantial contract, indicating strong market position. 3. Potential for cost efficiencies in large-scale ammunition production. 4. Focus on specific munition type suggests specialized defense needs.
Value Assessment
Rating: good
The award amount of $37.17 million for 30 million rounds appears reasonable given the unit cost. Benchmarking against similar defense ammunition contracts would provide further validation.
Cost Per Unit: $1.24
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a specific justification for limiting the initial pool. This method may impact price discovery compared to unrestricted full and open competition.
Taxpayer Impact: Taxpayer funds are allocated for essential defense materiel. The specific competition method warrants scrutiny to ensure optimal value.
Public Impact
Ensures supply of critical training ammunition for the U.S. Army. Supports defense industrial base and manufacturing capabilities. Impacts readiness and training effectiveness for military personnel. Potential for follow-on contracts based on performance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition justification requires review.
- Long contract duration (2028) may present future price volatility risks.
Positive Signals
- Addresses a specific, stated defense requirement.
- Award to established defense contractor.
- Firm Fixed Price contract provides cost certainty.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically ammunition production. Spending benchmarks for similar munitions vary widely based on type, quantity, and technological sophistication.
Small Business Impact
The contract was not awarded to a small business. There is no indication of small business subcontracting requirements in the provided data.
Oversight & Accountability
The Department of the Army is the contracting agency. Oversight will focus on contract performance, delivery schedules, and adherence to specifications. The 'exclusion of sources' clause requires specific justification and review.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition justification.
- Long contract duration.
- Potential for raw material cost volatility.
- Dependence on specific defense budget allocations.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mn, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 30MM XM1173 TP-T CARTRIDGE AWARD
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 $37.2 million.
What is the period of performance?
Start: 2024-08-28. End: 2028-07-31.
What was the specific justification for excluding sources in this full and open competition?
The justification for excluding sources in this 'full and open competition after exclusion of sources' is not detailed in the provided data. Typically, such exclusions are based on factors like national security, proprietary technology, or the need for specialized capabilities that only a limited number of entities possess. A thorough review would examine the documented rationale to ensure it was appropriate and did not unduly restrict competition.
How does the per-unit cost of $1.24 compare to industry benchmarks for similar training ammunition?
A per-unit cost of $1.24 for the XM1173 TP-T cartridge appears competitive, but a definitive assessment requires comparison with specific industry benchmarks for similar 30mm training rounds. Factors like material costs, manufacturing complexity, and volume discounts influence pricing. Without access to detailed market data or classified cost breakdowns, this benchmark serves as an initial indicator of potential value.
What are the potential risks associated with the long contract duration extending to July 2028?
The extended contract duration of nearly four years presents risks related to potential fluctuations in raw material costs, evolving technological requirements, and geopolitical factors impacting supply chains. While a Firm Fixed Price contract offers initial cost certainty, unforeseen economic shifts or supply disruptions could strain the contractor's ability to meet terms without impacting quality or delivery. Regular performance reviews and contract management are crucial.
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: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $37,167,805
Exercised Options: $37,167,805
Current Obligation: $37,167,805
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $13,855,325
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: 2024-08-28
Current End Date: 2028-07-31
Potential End Date: 2028-07-31 12:07:00
Last Modified: 2024-10-31
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