Northrop Grumman awarded $33.5M for 30mm combat ammunition, with delivery spanning over 3 years

Contract Overview

Contract Amount: $33,550,646 ($33.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-10-31

End Date: 2022-09-30

Contract Duration: 1,065 days

Daily Burn Rate: $31.5K/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 30MM COMBAT MIX NEW PRODUCTION DELIVERY ORDER AWARD

Place of Performance

Location: RADFORD, RADFORD CITY County, VIRGINIA, 24143

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MEDIUM CALIBER 30MM COMBAT MIX NEW PRODUCTION DELIVERY ORDER AWARD Key points: 1. Contract value appears reasonable given the specialized nature of combat ammunition. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Delivery order award indicates a specific need within a larger contract vehicle. 4. The contract duration of over 3 years allows for sustained supply chain management. 5. This award falls within the broader defense manufacturing sector, specifically ammunition production. 6. The firm-fixed-price structure shifts cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $33.5 million for 30mm combat ammunition is within a typical range for such specialized defense procurements. Benchmarking against similar contracts for large-caliber ammunition suggests this award is competitive. The firm-fixed-price type indicates that the contractor bears the risk of cost overruns, which is generally favorable for the government when pricing is well-established.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while some sources may have been initially excluded, the final award was made through a competitive process. The presence of two bidders suggests a moderate level of competition for this specialized ammunition requirement.

Taxpayer Impact: A competitive award process, even with two bidders, generally benefits taxpayers by encouraging more favorable pricing and ensuring the government receives a fair market value for the ammunition.

Public Impact

The U.S. Army benefits from a reliable supply of critical 30mm combat ammunition. This contract ensures the availability of ammunition for training and operational readiness. The geographic impact is primarily within the United States, supporting domestic defense manufacturing. The contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality control for combat-grade ammunition is paramount.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Longer contract duration allows for better planning and sustained supply.
Award to a major defense contractor suggests established production capabilities.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically the production of ammunition. The market for large-caliber ammunition is dominated by a few key defense contractors due to the specialized facilities, stringent quality requirements, and security protocols involved. Spending in this sub-sector is driven by military readiness requirements and ongoing operational needs.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the nature of large-caliber ammunition manufacturing, it is likely that the prime contractor, Northrop Grumman, will manage the supply chain. Subcontracting opportunities for small businesses may exist within the broader manufacturing and logistics processes, but are not explicitly detailed in the award information.

Oversight & Accountability

The Department of Defense employs various oversight mechanisms for such contracts, including contract performance monitoring, quality assurance inspections, and financial audits. The Defense Contract Management Agency (DCMA) typically oversees contractor performance. Transparency is maintained through contract award databases, though specific production details are often sensitive.

Related Government Programs

Department of Defense Ammunition Procurement
Northrop Grumman Defense Contracts
Army Combat Vehicle Ammunition
Medium Caliber Ammunition Manufacturing

Risk Flags

Potential for supply chain vulnerabilities
Quality assurance criticality
Delivery schedule adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MEDIUM CALIBER 30MM COMBAT MIX NEW PRODUCTION DELIVERY ORDER 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 $33.6 million.

What is the period of performance?

Start: 2019-10-31. End: 2022-09-30.

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

Northrop Grumman has a significant history of producing various types of munitions for the U.S. military, including large-caliber rounds. Their experience spans decades, encompassing research, development, and large-scale production. They are a key supplier for many critical defense systems. While specific details on past 30mm combat mix contracts are not publicly itemized in this award, their overall portfolio indicates a strong capability in meeting stringent military specifications and delivery schedules for complex ordnance. Past performance is a critical factor in the DoD's source selection process, suggesting this award is based on demonstrated ability to deliver.

How does the $33.5 million value compare to historical spending on 30mm ammunition?

Direct historical comparisons for this specific 'MEDIUM CALIBER 30MM COMBAT MIX NEW PRODUCTION DELIVERY ORDER AWARD' are challenging without access to detailed historical procurement data for identical items. However, the value of $33.5 million over approximately three years (1065 days) suggests an average annual spend of roughly $11 million. This figure is consistent with the procurement of specialized, high-demand military ordnance where production runs are significant but not at the scale of small arms ammunition. Factors like raw material costs, manufacturing complexity, and specific payload requirements influence the unit price and total contract value, making direct year-over-year comparisons difficult without granular data.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential supply chain disruptions for raw materials or components, manufacturing defects that could impact munition reliability or safety, and delivery delays due to production issues or logistical challenges. Given the nature of combat ammunition, quality control is paramount, and any lapse could have severe operational consequences. Furthermore, geopolitical events could impact the availability and cost of necessary precursor materials. The firm-fixed-price nature shifts cost overrun risk to the contractor, but delays or quality failures still pose significant risks to mission readiness.

How effective is the 'Full and Open Competition After Exclusion of Sources' in ensuring value?

The 'Full and Open Competition After Exclusion of Sources' (FCAES) is a method used when specific circumstances necessitate excluding certain sources initially, but the ultimate goal is still broad competition. While 'Full and Open Competition' is generally preferred for maximum price discovery, FCAES can still yield good value if the exclusion criteria are justified and the remaining pool of competitors is robust. In this case, with two bidders, the competition level is moderate. The effectiveness in ensuring value depends on the rigor of the evaluation process and the competitive posture of the bidders. It aims to balance specific needs with competitive principles, potentially offering better value than a sole-source award but perhaps less than unrestricted full and open competition.

What is the typical lead time for producing 30mm combat ammunition?

The typical lead time for producing 30mm combat ammunition can vary significantly based on production capacity, raw material availability, and the specific type of munition within the 'combat mix.' Large-scale production runs for established items can be relatively efficient, but new production or specialized variants may require longer lead times. Factors such as the complexity of the projectile, the propellant, and the fusing mechanisms all influence production schedules. The contract's duration of over three years (1065 days) suggests that the DoD anticipates a sustained need and has factored in realistic production and delivery timelines, likely ranging from several months to over a year for specific batches depending on demand and manufacturing schedules.

What are the implications of this contract for the defense industrial base?

This contract for 30mm combat ammunition has several implications for the defense industrial base. Firstly, it provides a significant revenue stream for Northrop Grumman, supporting their manufacturing capabilities and workforce in this critical area. Secondly, it helps maintain and potentially enhance the industrial capacity for producing medium-caliber munitions, which is vital for military readiness. Thirdly, it stimulates the supply chain for raw materials and components necessary for ammunition production. The award reinforces the importance of domestic defense manufacturing and ensures the availability of essential munitions for current and future military operations, contributing to overall industrial base resilience.

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: $33,550,646

Exercised Options: $33,550,646

Current Obligation: $33,550,646

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