Northrop Grumman awarded $34.7M for M782 Multi-Option Fuze for Artillery (MOFA) production

Contract Overview

Contract Amount: $34,685,120 ($34.7M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2022-07-27

End Date: 2026-10-20

Contract Duration: 1,546 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR THE M782 MULTI-OPTION FOR ARTILLERY (MOFA)

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: DELIVERY ORDER FOR THE M782 MULTI-OPTION FOR ARTILLERY (MOFA) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 3. The firm-fixed-price type indicates that the price is set and not subject to adjustment based on the contractor's costs. 4. The contract duration spans over four years, from late 2022 to late 2026. 5. The primary product category is ammunition manufacturing, excluding small arms. 6. The contract is managed by the Department of the Army within the Department of Defense. 7. The awardee, Northrop Grumman Systems Corp, is a major defense contractor.

Value Assessment

Rating: good

Benchmarking the value of this specific delivery order is challenging without knowing the total IDIQ contract value and the scope of work for this particular order. However, the firm-fixed-price structure generally provides cost certainty for the government. Comparing the unit price to similar fuze procurements would be necessary for a more precise value assessment. Given the specialized nature of artillery fuzes and the prime contractor's established role, the price appears within a reasonable range for advanced defense components, though detailed cost breakdowns are not publicly available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The Army likely leveraged existing contract vehicles or initiated a new competitive process to solicit proposals for the M782 MOFA.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a robust bidding process, potentially driving down costs and ensuring a wider pool of qualified suppliers.

Public Impact

The primary beneficiaries are the U.S. Army and potentially allied forces requiring advanced artillery munitions. The contract delivers critical components for artillery shells, enhancing the effectiveness and versatility of indirect fire support. The geographic impact is primarily within the United States, with potential for deployment to operational theaters globally. Workforce implications include skilled manufacturing and engineering roles at Northrop Grumman facilities, likely in West Virginia as indicated by the state code.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single prime contractor for a critical defense component could pose supply chain risks if not managed proactively.
The long duration of the contract necessitates ongoing monitoring to ensure performance and cost control.
Potential for cost overruns if the firm-fixed-price contract does not adequately account for unforeseen material or labor cost increases.

Positive Signals

Award to a major defense contractor with a proven track record in aerospace and defense systems.
The firm-fixed-price contract type provides budget certainty for the government.
The delivery order structure under an IDIQ allows for flexibility in managing future requirements.
The M782 MOFA is a key component for modern artillery systems, indicating a commitment to advanced warfighting capabilities.

Sector Analysis

The defense sector, particularly ammunition manufacturing, is characterized by high barriers to entry due to stringent quality, security, and technological requirements. Companies like Northrop Grumman operate within a market driven by government procurement, where contracts are often long-term and involve complex systems. Spending in this area is critical for national defense readiness. Comparable spending benchmarks would involve analyzing other large-scale ammunition production contracts or similar advanced ordnance procurements.

Small Business Impact

The data indicates that small business participation (sb: false) was not a primary set-aside criterion for this specific delivery order. While Northrop Grumman is a large business, they may engage small businesses as subcontractors. Analysis of subcontracting plans would be necessary to determine the extent of small business involvement and its impact on the small business ecosystem. Without specific subcontracting data, it's difficult to assess the direct impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally limited for specific defense procurements, but contract awards are publicly reported. The Inspector General for the Department of Defense would have jurisdiction over any allegations of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential supply chain single point of failure
Long-term contract duration requires sustained oversight
Firm-fixed-price may not fully account for inflation if not structured carefully

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to NORTHROP GRUMMAN SYSTEMS CORP. DELIVERY ORDER FOR THE M782 MULTI-OPTION FOR ARTILLERY (MOFA)

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 $34.7 million.

What is the period of performance?

Start: 2022-07-27. End: 2026-10-20.

What is the historical spending trend for the M782 MOFA program or similar artillery fuze procurements by the Department of the Army?

Analyzing historical spending for the M782 MOFA program specifically is challenging without access to detailed contract databases beyond this single delivery order. However, the Department of the Army consistently allocates significant funds towards ammunition and ordnance procurement annually. Spending on advanced fuzes like the M782 MOFA is part of a broader strategy to modernize artillery capabilities. Trends in recent years show a focus on precision munitions and multi-option fuzes to enhance battlefield effectiveness and reduce collateral damage. Comparable procurements for other advanced artillery fuzes or related ammunition components would likely show multi-million dollar awards over several years, reflecting the high cost and critical nature of these defense systems. Fluctuations in spending can be influenced by geopolitical events, readiness requirements, and budget allocations.

How does the awarded amount of $34.7 million compare to the total potential value of the underlying IDIQ contract?

The provided data indicates that $34.7 million is the value of a specific 'DELIVERY ORDER' (d) for the M782 Multi-Option Fuze for Artillery (MOFA). This suggests it is a portion of a larger Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract. Without the details of the parent IDIQ contract, such as its total ceiling value or the number and value of other delivery orders issued against it, a direct comparison is not possible. IDIQ contracts are designed to provide flexibility, allowing agencies to order goods or services as needed up to a specified maximum value over a set period. This single delivery order represents a specific tranche of funding for a defined period of performance (2022-2026), and the total value of the IDIQ could be substantially higher, potentially in the hundreds of millions or even billions of dollars, depending on the program's scope and duration.

What are the specific performance requirements and quality standards associated with the M782 MOFA, and how are they monitored?

The M782 Multi-Option Fuze for Artillery (MOFA) is a sophisticated component designed to provide multiple firing options (e.g., point detonation, delay, proximity) for artillery projectiles, enhancing target engagement flexibility and effectiveness. Specific performance requirements typically include high reliability rates, precise detonation timing, environmental resistance (temperature, shock, vibration), and compatibility with various artillery systems and ammunition types. Quality standards are governed by stringent military specifications (Mil-Specs) and quality assurance protocols established by the Department of the Army, often involving rigorous testing, inspection, and certification processes. Monitoring performance and quality involves a combination of government quality assurance representatives (QARs) at the contractor's facility, acceptance testing of delivered units, and post-delivery performance monitoring in operational use. Contractual clauses would detail acceptance criteria, defect reporting, and remedies for non-conformance.

What is Northrop Grumman's track record with similar defense contracts, particularly in ammunition or fuze manufacturing?

Northrop Grumman Systems Corp is a major defense contractor with extensive experience across various defense platforms, including aerospace, electronics, and information systems. While specific details on their ammunition and fuze manufacturing portfolio require deeper analysis, the company has a long history of producing complex ordnance and related components for the U.S. military. They have been involved in programs related to missile systems, precision-guided munitions, and other advanced weapon systems. Their involvement in the M782 MOFA program suggests they possess the necessary technical expertise, manufacturing capabilities, and security clearances required for such sensitive defense production. Publicly available contract databases often show Northrop Grumman as a recipient of numerous large-value defense contracts, indicating a strong track record in fulfilling government requirements, though the specifics of their fuze production capabilities would need further investigation.

What are the potential risks associated with relying on a single contractor for the production of critical artillery components like the M782 MOFA?

Relying on a single contractor, even a large and reputable one like Northrop Grumman, for critical defense components like the M782 MOFA introduces several potential risks. Supply chain disruption is a primary concern; any issue at the contractor's facility, such as a natural disaster, labor strike, or unforeseen production problem, could halt or delay deliveries, impacting military readiness. Dependence on a sole source can also reduce the government's leverage in future negotiations, potentially leading to higher prices or less favorable terms if competition is not maintained or re-established. Furthermore, a single point of failure in production could be exploited by adversaries. To mitigate these risks, the government often employs strategies such as maintaining strategic stockpiles, encouraging dual-sourcing where feasible, closely monitoring contractor performance and financial health, and ensuring robust contingency planning.

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: $34,685,120

Exercised Options: $34,685,120

Current Obligation: $34,685,120

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $3,083,768

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