DoD awards $31.9M for M910 Cartridges, with Northrop Grumman as prime contractor

Contract Overview

Contract Amount: $31,921,823 ($31.9M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2018-09-10

End Date: 2024-08-30

Contract Duration: 2,181 days

Daily Burn Rate: $14.6K/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: 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 $31.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 25MM M910 CARTRIDGE, NSN:1305-01-426-4359 Key points: 1. Contract value of $31.9 million over a 6-year period suggests a significant, long-term need for these ammunition components. 2. The contract was awarded under full and open competition after exclusion of sources, indicating a competitive process with specific justifications. 3. The fixed-price contract type aims to control costs for the government, shifting some financial risk to the contractor. 4. Northrop Grumman's role as prime contractor highlights its established position in the defense supply chain for ammunition. 5. The duration of the contract (2181 days) points to sustained demand and production requirements. 6. The North American Industry Classification System (NAICS) code 332993 indicates a focus on ammunition manufacturing, a specialized industrial sector.

Value Assessment

Rating: good

The total award of $31.9 million over approximately six years for M910 Cartridges appears reasonable given the nature of defense procurement. Without specific unit cost data or direct comparisons to identical contracts, a precise value-for-money assessment is challenging. However, the firm fixed-price structure suggests an effort to lock in costs. Benchmarking against similar ammunition contracts would provide further insight into whether this pricing is competitive within the defense sector.

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 competition was intended to be open, certain sources were excluded, likely due to specific technical requirements, security clearances, or prior performance issues. The number of bidders is not specified, but the 'exclusion of sources' suggests a potentially narrower field than a purely open competition, which could impact price discovery.

Taxpayer Impact: While the competition was not fully open, the exclusion of sources was justified, aiming to ensure the best possible outcome for taxpayers under specific circumstances. The competitive process, even with exclusions, should still drive reasonable pricing.

Public Impact

This contract directly supports the Department of the Army's operational readiness by ensuring a supply of critical ammunition components. The primary beneficiaries are military personnel who rely on this ammunition for training and combat operations. The geographic impact is primarily within the United States, supporting domestic defense manufacturing and supply chains. Workforce implications include jobs in manufacturing, logistics, and quality control at Northrop Grumman and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources, which could impact long-term pricing.
Reliance on a single prime contractor for a critical defense component warrants ongoing performance monitoring.
The long contract duration necessitates robust oversight to ensure continued quality and adherence to specifications.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Northrop Grumman is a well-established defense contractor with a track record in complex manufacturing.
The contract duration indicates a stable, predictable supply chain for essential materiel.

Sector Analysis

The defense ammunition manufacturing sector is highly specialized, characterized by stringent quality control, security requirements, and long production lead times. Contracts in this area often involve significant R&D and capital investment. Spending benchmarks are difficult to establish without detailed comparisons, but the $31.9 million award over six years for specific ammunition components suggests a substantial, albeit niche, market segment within the broader defense industrial base. Northrop Grumman's involvement places this contract within the context of major defense industrial suppliers.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Northrop Grumman, as a large prime contractor, may have subcontracting opportunities for small businesses within its supply chain. However, the specific subcontracting plan or goals are not detailed in this award information. The primary focus appears to be on large-scale production capabilities rather than direct small business set-asides for this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes contractor performance. Transparency is facilitated through contract award databases, though detailed performance metrics and specific oversight activities are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Northrop Grumman Defense Contracts
Army Ammunition Supply Chain
Defense Manufacturing Contracts
Fixed-Price Defense Contracts

Risk Flags

Limited competition due to exclusion of sources
Long contract duration may increase risk of obsolescence or requirement changes
Reliance on a single prime contractor for critical component

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 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 $31.9 million.

What is the period of performance?

Start: 2018-09-10. End: 2024-08-30.

What is Northrop Grumman's track record with similar ammunition contracts?

Northrop Grumman has a long history of producing complex defense systems, including munitions and related components. While specific details on their M910 Cartridge production history are not provided in this data, the company is a major defense contractor with extensive experience in manufacturing and systems integration. Their track record generally includes large-scale production for various military branches. Assessing their performance on this specific contract would require reviewing delivery schedules, quality reports, and any past performance evaluations associated with this or comparable contracts. Their established presence suggests a capacity to meet the demands of such a procurement, but ongoing monitoring is crucial.

How does the $31.9 million value compare to historical spending on M910 Cartridges?

The provided data reflects a single award of $31.9 million for M910 Cartridges with an estimated completion date in August 2024, spanning from September 2018. To compare this to historical spending, one would need to access historical contract databases for the Department of Defense, specifically looking for previous awards for the same NSN (1305-01-426-4359) or related ammunition components. Without that historical data, it's difficult to ascertain if this $31.9 million represents an increase, decrease, or stable level of spending compared to prior periods. Factors like inflation, changes in demand, and technological updates would influence historical spending patterns.

What are the primary risks associated with this contract?

Key risks include potential supply chain disruptions affecting the availability of raw materials or components needed for the M910 Cartridge. Performance risk is also present, where Northrop Grumman might face challenges in meeting production schedules or quality standards, although their experience mitigates this to some extent. Given the 'exclusion of sources' in the competition, there's a risk that the limited competition may not have yielded the absolute lowest price possible. Furthermore, the long duration of the contract (over 6 years) introduces risks related to potential obsolescence of technology or shifts in military requirements over time, necessitating flexibility and robust contract management.

How effective is the firm fixed-price (FFP) contract type in managing costs for this ammunition procurement?

The Firm Fixed-Price (FFP) contract type is generally considered effective for managing costs in procurements where the scope of work is well-defined and risks can be reasonably anticipated, such as the manufacturing of standardized ammunition components like the M910 Cartridge. Under FFP, the contractor assumes the primary responsibility for cost overruns, providing the government with cost certainty. This structure incentivizes the contractor to control costs efficiently to maximize profit. However, if unforeseen technical challenges arise or material costs escalate significantly beyond projections, the contractor might seek adjustments, or the government might end up paying a premium if the initial price was set conservatively due to perceived risks.

What is the significance of the NSN 1305-01-426-4359 for the M910 Cartridge?

The National Stock Number (NSN) 1305-01-426-4359 is a unique 13-digit identifier used by the U.S. military and NATO countries to catalog standardized items. For the M910 Cartridge, this NSN ensures that all parties involved in procurement, logistics, and maintenance are referring to the exact same item. It facilitates inventory management, simplifies ordering processes, and ensures interoperability across different military units and potentially allied forces. The specific number indicates it falls under Class 13 (Ordnance and Ground Support Equipment) and is related to ammunition manufacturing. Its presence confirms the item's standardization within the defense supply system.

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: $31,921,823

Exercised Options: $31,921,823

Current Obligation: $31,921,823

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