Northrop Grumman awarded $24.6M for Printed Circuit Assembly Manufacturing, a sole-source contract

Contract Overview

Contract Amount: $24,652,870 ($24.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-12-14

End Date: 2012-04-30

Contract Duration: 1,599 days

Daily Burn Rate: $15.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TVS 1260-01-167-4624

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $24.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TVS 1260-01-167-4624 Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined costs and risks. 2. The contract duration of approximately 4.3 years suggests a long-term need for these services. 3. Awarded by the Department of the Army, highlighting defense sector reliance on specialized manufacturing. 4. The North American Industry Classification System (NAICS) code 334418 points to a specific niche in electronics manufacturing. 5. The contract value of $24.6 million falls within a moderate spending range for specialized defense components. 6. The absence of small business participation suggests this contract is not designed to benefit smaller enterprises directly.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for Printed Circuit Assembly (PCA) manufacturing. The fixed-price nature provides cost certainty, but the lack of competition limits the ability to assess if the price reflects optimal market value. The award amount of $24.6 million over nearly five years suggests a significant investment in specialized electronic assemblies, but without competitive bids, it's difficult to determine if this represents excellent value for money. Further analysis would require understanding the specific technical requirements and the complexity of the PCA manufacturing involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when only one source is capable of meeting the government's needs. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple suppliers. This raises questions about whether alternative, potentially more cost-effective solutions were overlooked.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage of a competitive bidding process to secure the best possible price.

Public Impact

The Department of Defense, specifically the Department of the Army, is the primary beneficiary, receiving critical electronic assemblies for its operations. The services delivered include the manufacturing of Printed Circuit Assemblies, essential components for various defense systems. The geographic impact is primarily within Illinois, where the contractor is located, potentially supporting local manufacturing jobs. Workforce implications may include specialized roles in electronics manufacturing, engineering, and quality control at Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Lack of transparency in the justification for sole-sourcing.
Potential for cost overruns if not closely managed due to lack of competition.

Positive Signals

Contract awarded to a known defense contractor with established capabilities.
Firm-fixed-price contract provides cost certainty for the government.
Long-term contract duration suggests a stable and ongoing requirement.

Sector Analysis

The Printed Circuit Assembly (Electronic Assembly) Manufacturing sector is a critical component of the broader electronics and defense industries. This contract falls within the specialized manufacturing of electronic components, which are vital for defense systems, aerospace, and other high-tech applications. The market for such specialized manufacturing is often characterized by high barriers to entry due to technical expertise, capital investment, and stringent quality control requirements. Comparable spending benchmarks are difficult to establish for sole-source awards, but the defense sector consistently invests heavily in advanced electronics manufacturing to maintain technological superiority.

Small Business Impact

This contract does not appear to include any specific small business set-aside provisions, as indicated by 'sb': false. Consequently, small businesses are unlikely to be direct beneficiaries of this award. There is also no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, Northrop Grumman, will likely handle the majority of the work internally, potentially limiting opportunities for small businesses to participate in the supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the firm-fixed-price terms, requiring Northrop Grumman to deliver the specified PCA manufacturing services within the agreed-upon cost and schedule. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Electronics Manufacturing
Military Hardware Production
Aerospace Component Manufacturing
Electronic Assembly Services
Department of Defense Procurement

Risk Flags

Sole-source award raises concerns about competition and potential pricing inefficiencies.
Lack of transparency regarding the justification for sole-sourcing.
Potential for limited innovation due to absence of competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TVS 1260-01-167-4624

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 $24.7 million.

What is the period of performance?

Start: 2007-12-14. End: 2012-04-30.

What is the specific justification for awarding this contract on a sole-source basis to Northrop Grumman Systems Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the government's requirements. This could be due to proprietary technology, unique capabilities, or a lack of competition among qualified vendors. Without further documentation, such as a Justification and Approval (J&A) document, the precise reasons remain unknown. This lack of transparency can be a concern for ensuring fair and competitive procurement practices.

How does the $24.6 million contract value compare to other Printed Circuit Assembly (PCA) manufacturing contracts within the Department of Defense?

Direct comparison of this $24.6 million contract value to other PCA manufacturing contracts is challenging due to the sole-source nature of this award and the lack of specific details on the scope of work. However, for context, the Department of Defense procures a wide range of electronic components and assemblies, with contract values varying significantly based on complexity, volume, and technological sophistication. Larger, more complex assemblies for major weapon systems can run into hundreds of millions or even billions of dollars. This $24.6 million award appears to be for a specific set of PCA manufacturing services over a period of approximately 4.3 years, suggesting a moderate-sized, specialized requirement rather than a large-scale production run.

What are the potential risks associated with a sole-source contract for critical electronic assemblies?

Sole-source contracts carry inherent risks, primarily related to cost and innovation. Without competition, there is less pressure on the contractor to offer the most competitive pricing, potentially leading to higher costs for the government and taxpayers. Furthermore, the absence of multiple bidders can stifle innovation, as there is no incentive for alternative suppliers to develop and offer novel solutions or more efficient manufacturing processes. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, making it difficult to switch even if performance or pricing becomes unsatisfactory. Robust oversight and negotiation are crucial to mitigate these risks.

What is Northrop Grumman Systems Corporation's track record in delivering Printed Circuit Assembly (PCA) manufacturing services to the government?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in aerospace, defense, and technology sectors. While specific details on their PCA manufacturing performance for this particular contract are not provided in the data, the company generally has a long history of delivering complex electronic systems and components to government agencies, including the Department of Defense. Their established presence and capabilities suggest a capacity to handle such manufacturing requirements. However, the performance history for this specific contract would need to be assessed through contract performance reports (e.g., CPARS) and delivery records.

What is the historical spending pattern for Printed Circuit Assembly (PCA) manufacturing by the Department of the Army?

The provided data focuses on a single contract award and does not offer historical spending patterns for PCA manufacturing by the Department of the Army. To analyze historical spending, one would need access to broader contract databases and procurement reports covering multiple years. Such analysis would involve identifying all contracts related to PCA manufacturing, their values, durations, and the agencies involved. This would help determine trends in spending, identify key contractors, and understand the overall investment in this capability within the Army's budget. Without this broader dataset, specific historical patterns cannot be determined from the given information.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Printed Circuit Assembly (Electronic Assembly) Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 600 HICKS RD, ROLLING MEADOWS, IL, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,652,870

Exercised Options: $24,652,870

Current Obligation: $24,652,870

Contract Characteristics

Cost or Pricing Data: YES

Timeline