Northrop Grumman awarded $144.6M for artillery fuze production, with delivery through July 2029

Contract Overview

Contract Amount: $144,647,875 ($144.6M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2024-09-26

End Date: 2029-07-31

Contract Duration: 1,769 days

Daily Burn Rate: $81.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M782A1 MULTI-OPTION FUZE FOR ARTILLERY II (MOFA II) DELIVERY ORDER

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $144.6 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: M782A1 MULTI-OPTION FUZE FOR ARTILLERY II (MOFA II) DELIVERY ORDER Key points: 1. Contract value represents significant investment in munitions readiness. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Long-term delivery schedule indicates sustained demand for the product. 4. Focus on artillery fuzes highlights a critical component of Army's firepower. 5. Contract performance will be key to ensuring timely supply of essential ordnance.

Value Assessment

Rating: good

The contract value of $144.6 million for M782A1 fuzes appears reasonable given the duration and nature of the product. Benchmarking against similar munitions contracts is challenging without more specific cost breakdowns, but the firm-fixed-price structure provides cost certainty. The award to a major defense contractor suggests established production capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive offers. The Army's approach suggests a desire to secure the best value through a broad solicitation.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to drive down costs and ensure fair pricing for essential defense materiel.

Public Impact

The U.S. Army benefits from a reliable supply of critical artillery fuzes. This contract supports the production of ammunition essential for military operations. The geographic impact is primarily in West Virginia, where the contractor's facility is located. Workforce implications include sustained employment at Northrop Grumman's manufacturing sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if production challenges arise.
Dependence on a single contractor for a critical component.
Risk of obsolescence if technology advances rapidly.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Long-term contract ensures supply chain stability.
Award to established defense contractor suggests manufacturing expertise.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition components. The market for artillery fuzes is specialized, driven by military procurement cycles and defense budgets. Comparable spending benchmarks would typically be found within broader DoD ammunition procurement data, where significant investments are consistently made to maintain readiness.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside criterion for this specific award (ss: false, sb: false). While Northrop Grumman is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors in the supply chain for components or services related to fuze production. The extent of small business subcontracting will be a key factor in assessing the broader impact on the small business ecosystem.

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 firm-fixed-price contract terms, requiring delivery of specified fuzes. Transparency is generally maintained through contract award announcements and reporting requirements, though detailed cost breakdowns are typically proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Artillery Ammunition Production
Munitions Manufacturing
Department of Defense Procurement
Army Combat Systems

Risk Flags

Long-term contract duration may require ongoing budget allocation.
Dependence on a single supplier for critical component.
Potential for technological obsolescence over contract life.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $144.6 million to NORTHROP GRUMMAN SYSTEMS CORP. M782A1 MULTI-OPTION FUZE FOR ARTILLERY II (MOFA II) DELIVERY ORDER

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 $144.6 million.

What is the period of performance?

Start: 2024-09-26. End: 2029-07-31.

What is the historical spending trend for M782A1 fuzes or similar artillery fuzes by the Department of Defense?

Historical spending on artillery fuzes, including the M782A1 and its predecessors, reflects the ongoing need for munitions in the U.S. military's arsenal. While specific figures for the M782A1 prior to this award are not detailed here, the Department of Defense consistently allocates substantial budgets towards ammunition procurement. This includes funding for various types of fuzes, propellants, and projectiles. Trends often show sustained or increasing investment during periods of heightened geopolitical tension or operational tempo, as well as efforts to modernize existing munition capabilities. The current award of $144.6 million indicates a significant, ongoing investment in this specific fuze type, suggesting it is a current standard or critical component for artillery systems.

How does the per-unit cost of the M782A1 fuze compare to other artillery fuzes in the DoD's inventory?

A direct per-unit cost comparison for the M782A1 fuze against other artillery fuzes within the DoD's inventory is not feasible with the provided data alone. The contract value of $144.6 million is for a delivery order with an unspecified quantity, making a precise per-unit calculation impossible. Furthermore, different fuzes serve distinct purposes (e.g., proximity, impact, time delay) and are manufactured using varying technologies and materials, leading to inherent cost differences. To conduct a meaningful comparison, one would need access to detailed cost breakdowns for this contract and comparable contracts for other fuze types, factoring in production volume, technological sophistication, and specific performance requirements. Generally, more advanced or specialized fuzes command higher per-unit prices.

What is Northrop Grumman's track record in producing artillery fuzes or similar ordnance components?

Northrop Grumman Systems Corporation has a significant and established track record in the defense industry, including the production of various ordnance components and complex defense systems. As a major defense contractor, the company possesses extensive experience in manufacturing, quality control, and program management for military hardware. While specific details on their history with the M782A1 fuze are not provided in this data snippet, their broad capabilities in aerospace and defense suggest a strong capacity to meet the requirements of this contract. Their involvement in producing critical components for the U.S. military implies adherence to stringent quality and performance standards, and a history of delivering on large-scale defense contracts.

What are the primary performance requirements and quality standards for the M782A1 fuze?

The primary performance requirements for the M782A1 MULTI-OPTION FUZE FOR ARTILLERY II (MOFA II) are centered around its functionality as a critical component of artillery shells. As a 'multi-option' fuze, it is designed to provide various detonation modes (e.g., impact, delay, proximity) to adapt to different tactical scenarios. Key performance indicators would include reliability, accuracy of detonation timing and function, environmental resistance (e.g., to shock, temperature extremes, moisture), and safety during handling and firing. Quality standards are exceptionally high for munitions components, governed by rigorous military specifications (Mil-Specs) and stringent testing protocols established by the Department of the Army and the DoD. These standards ensure that the fuzes perform as intended under battlefield conditions, minimizing duds and maximizing effectiveness.

How does the duration of this contract (ending July 2029) align with typical munitions procurement cycles?

The contract duration, extending from September 2024 to July 2029 (approximately 5 years), aligns well with typical munitions procurement cycles, particularly for established systems like artillery fuzes. Defense procurement often involves long-term planning and production contracts to ensure a steady supply of critical materiel, manage production capacity, and achieve economies of scale. A multi-year contract allows the DoD to forecast needs and budgets, while providing the contractor with the stability to invest in manufacturing processes and workforce. Shorter contracts might be used for R&D or initial production, but sustained operational readiness requires longer-term agreements for high-demand items such as artillery ammunition components.

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: $144,647,875

Exercised Options: $144,647,875

Current Obligation: $144,647,875

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $25,163,563

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