DoD awards $51.8M for Medium Caliber Ammunition to Northrop Grumman, with competition impacting price
Contract Overview
Contract Amount: $51,819,832 ($51.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-09-06
End Date: 2026-04-30
Contract Duration: 2,793 days
Daily Burn Rate: $18.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MEDIUM CALIBER AMMUNITION
Place of Performance
Location: RADFORD, RADFORD CITY County, VIRGINIA, 24143
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $51.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MEDIUM CALIBER AMMUNITION Key points: 1. Significant contract value for essential defense materiel. 2. Northrop Grumman is a major defense contractor, indicating established capabilities. 3. Full and open competition after exclusion of sources suggests a complex procurement process. 4. Long contract duration (2018-2026) implies sustained demand and potential for price fluctuations.
Value Assessment
Rating: fair
The contract's total value is $51.8M over nearly 8 years. Without specific unit cost data or benchmarks for medium caliber ammunition, a precise value assessment is difficult. The 'full and open competition after exclusion of sources' method may have influenced pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The procurement method 'Full and Open Competition After Exclusion of Sources' indicates that while competition was sought, specific sources were initially excluded, potentially limiting the breadth of competition and its downward pressure on price. The final awardee was selected through a competitive process.
Taxpayer Impact: The competitive nature of the award, despite the exclusion of some sources, aims to secure reasonable pricing for taxpayers. However, the complexity of the procurement method warrants scrutiny for potential inefficiencies.
Public Impact
Ensures supply of critical ammunition for military operations. Supports a major defense contractor and its supply chain. Potential for price volatility due to long-term contract and specific competition method. Impacts readiness and operational capabilities of the armed forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Complexity of competition method ('after exclusion of sources')
- Long contract duration without clear unit cost benchmarks
- Lack of small business participation indicated
Positive Signals
- Award to a reputable, large defense contractor
- Ensures supply of critical defense materiel
- Competitive award process
Sector Analysis
This contract falls under the manufacturing sector, specifically ammunition production. Defense spending on ammunition is a significant portion of the overall defense budget, driven by operational needs and strategic stockpiling. Benchmarks for such specialized manufacturing can vary widely.
Small Business Impact
The data indicates no specific small business participation (ss: false, sb: false). This suggests that the prime contract was awarded to a large business, and opportunities for small businesses may be limited to subcontracting roles, which are not detailed here.
Oversight & Accountability
The 'full and open competition after exclusion of sources' method suggests a potentially complex oversight process. Further review would be needed to ensure the exclusion criteria were justified and that the subsequent competition effectively managed costs and ensured accountability.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for higher costs due to limited initial competition.
- Long contract duration increases risk of price escalation.
- Lack of transparency on specific unit costs.
- No indicated small business participation.
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 $51.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MEDIUM CALIBER AMMUNITION
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 $51.8 million.
What is the period of performance?
Start: 2018-09-06. End: 2026-04-30.
What was the rationale for excluding specific sources in the initial phase of this full and open competition?
The rationale for excluding specific sources in a 'full and open competition after exclusion of sources' typically involves factors such as national security concerns, proprietary technology, or a determination that only certain qualified entities could meet the stringent technical or performance requirements. This method aims to balance broad competition with the need for specialized capabilities, but requires clear justification to avoid limiting market access unnecessarily.
How does the long contract duration (2018-2026) impact the risk of cost overruns or underperformance?
A long contract duration like this increases the risk of cost overruns due to potential inflation, changes in material costs, and evolving technological requirements. It also presents a risk of underperformance if the contractor's capabilities degrade or if market conditions shift, making the fixed-price terms less favorable. Robust contract management, including regular performance reviews and potential price adjustment clauses, is crucial to mitigate these risks.
What is the estimated taxpayer impact of the 'full and open competition after exclusion of sources' method compared to standard full and open competition?
The 'full and open competition after exclusion of sources' method can have a mixed taxpayer impact. While it aims for competition among qualified bidders, the initial exclusion might reduce the number of potential offerors, potentially leading to higher prices than a truly unrestricted competition. However, if the exclusion is necessary for specialized requirements, it could ensure a higher quality outcome, potentially reducing long-term costs associated with performance failures or rework.
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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 4700 NATHAN LN N, PLYMOUTH, 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: $51,819,832
Exercised Options: $51,819,832
Current Obligation: $51,819,832
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $4,909,209
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W52P1J18D0092
IDV Type: IDC
Timeline
Start Date: 2018-09-06
Current End Date: 2026-04-30
Potential End Date: 2026-04-30 12:04:00
Last Modified: 2025-09-23
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)