DoD Awards Northrop Grumman $20.3M Contract for Egyptian Tank Ammunition Production
Contract Overview
Contract Amount: $20,268,494 ($20.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2021-12-17
End Date: 2026-12-31
Contract Duration: 1,840 days
Daily Burn Rate: $11.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EGYPT COPRODUCTION OF 120MM TANK TRAINING AMMUNITION FOR THE GOVT OF EGYPT M831A1 AND M865 CARTRIDGES
Place of Performance
Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33716
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $20.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: EGYPT COPRODUCTION OF 120MM TANK TRAINING AMMUNITION FOR THE GOVT OF EGYPT M831A1 AND M865 CARTRIDGES Key points: 1. Contract focuses on co-producing 120mm tank training ammunition for Egypt. 2. Northrop Grumman is the sole awardee, raising questions about competition. 3. The contract's value is moderate, but long duration warrants scrutiny. 4. Ammunition manufacturing is a critical defense sector with significant supply chain risks.
Value Assessment
Rating: fair
The contract value of $20.3 million over 1840 days suggests a per-unit cost that needs comparison with similar domestic or international training ammunition procurements. Without specific unit counts or detailed cost breakdowns, a precise benchmark is difficult, but the duration implies a steady, ongoing need.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a fully competitive process. The rationale for this limitation needs further investigation.
Taxpayer Impact: The limited competition may result in a higher price than achievable through open bidding, impacting taxpayer value.
Public Impact
Enhances military readiness for a key U.S. ally, Egypt. Supports U.S. defense industrial base capacity in ammunition manufacturing. Potential for technology transfer or co-development in defense manufacturing. Ensures availability of specialized training ammunition for armored forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Potential for cost overruns
- Geopolitical implications of foreign military sales
Positive Signals
- Supports a key ally's defense capabilities
- Maintains domestic manufacturing expertise
- Firm Fixed Price contract provides cost certainty
Sector Analysis
This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often driven by geopolitical needs and modernization efforts. Benchmarks are highly dependent on specific munition types and quantities.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large defense contractor. There is no indication in the provided data that small businesses were involved in this specific contract, either as prime contractors or significant subcontractors.
Oversight & Accountability
The Department of the Army awarded this contract. Oversight will be crucial to ensure adherence to the firm fixed price, monitor production quality, and manage the long-term delivery schedule effectively, especially given the limited competition.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- Long contract duration increases risk of cost escalation.
- Potential for geopolitical instability affecting supply chain.
- Lack of transparency on specific unit costs.
- Dependency on a single contractor for critical munition.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, fl, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. EGYPT COPRODUCTION OF 120MM TANK TRAINING AMMUNITION FOR THE GOVT OF EGYPT M831A1 AND M865 CARTRIDGES
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 $20.3 million.
What is the period of performance?
Start: 2021-12-17. End: 2026-12-31.
What is the specific justification for awarding this contract on a limited competition basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for limited competition needs to be thoroughly documented by the Department of the Army. Typically, such awards are made when only one source can provide the required goods or services due to unique capabilities, proprietary technology, or urgent needs. A thorough review should confirm that Northrop Grumman is indeed the sole capable provider and that price negotiations were robust, potentially involving comparisons to similar international contracts or internal cost analyses.
How does the per-unit cost of this co-produced ammunition compare to domestically produced equivalents or similar international sales, considering the long-term nature of the contract?
A detailed cost-benefit analysis is required. While co-production might offer some efficiencies or strategic advantages, the absence of competition raises concerns about potential cost inflation. Comparing the projected per-unit cost against historical data for similar 120mm training rounds, both domestically and internationally, is essential. The long duration (1840 days) necessitates evaluating potential fluctuations in material costs and production efficiencies over time.
What are the long-term strategic implications and potential risks associated with co-producing sensitive military hardware like tank ammunition with a foreign partner?
Co-producing military hardware can strengthen alliances and enhance interoperability, but it also carries risks. These include potential technology transfer concerns, supply chain vulnerabilities if Egypt's production capabilities falter, and geopolitical shifts that could alter the relationship. Ensuring robust security protocols and clear intellectual property agreements is paramount to mitigate these risks and protect U.S. interests.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W52P1J20R0102
Offers Received: 1
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: $20,268,494
Exercised Options: $20,268,494
Current Obligation: $20,268,494
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $14,556,160
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-12-17
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 12:12:00
Last Modified: 2025-12-30
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