DoD Awards Northrop Grumman $66.3M for FMS Volcano Procurement, Sole-Source Contract
Contract Overview
Contract Amount: $66,327,310 ($66.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-07-31
End Date: 2026-12-31
Contract Duration: 883 days
Daily Burn Rate: $75.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FMS VOLCANO PROCUREMENT
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442
Plain-Language Summary
Department of Defense obligated $66.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: FMS VOLCANO PROCUREMENT Key points: 1. Significant contract value of $66.3 million awarded to a single vendor. 2. Sole-source award raises questions about competition and potential price inflation. 3. Contract duration of 883 days suggests a substantial, ongoing need. 4. Focus on explosives manufacturing indicates a critical defense capability.
Value Assessment
Rating: questionable
The contract's firm fixed price structure provides some cost certainty. However, without competitive bidding, it's difficult to assess if the $66.3 million represents a fair market price compared to potential alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman Systems Corporation. This lack of competition limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in this significant procurement could result in taxpayers paying a premium for the FMS Volcano system.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The procurement supports critical defense capabilities, ensuring operational readiness. Reliance on a single supplier could create long-term dependency and potential supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Supports critical defense needs
- Firm fixed price contract
Sector Analysis
This procurement falls within the defense sector, specifically related to explosives manufacturing. Spending benchmarks for similar sole-source defense contracts can vary widely, but significant value often warrants closer scrutiny.
Small Business Impact
There is no indication of small business participation in this contract, as it was awarded directly to Northrop Grumman Systems Corporation.
Oversight & Accountability
The sole-source nature of this award warrants careful oversight to ensure the government is receiving fair value and that the necessity for a non-competitive award is well-documented.
Related Government Programs
- Explosives Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing.
- Limited transparency in price discovery.
- Risk of vendor lock-in.
- No small business participation noted.
Tags
explosives-manufacturing, department-of-defense, mn, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $66.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. FMS VOLCANO PROCUREMENT
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 $66.3 million.
What is the period of performance?
Start: 2024-07-31. End: 2026-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must conduct market research to confirm no other sources exist and may use historical pricing, independent government cost estimates, or benchmarking against similar systems to validate the price. Transparency in documenting these steps is crucial for accountability.
What are the potential long-term risks associated with relying on a single supplier for critical explosives manufacturing capabilities?
Long-term reliance on a single supplier can lead to supply chain vulnerabilities, price escalation due to lack of competition, and reduced innovation. It also creates a dependency that could be exploited if the supplier faces production issues, financial instability, or changes strategic direction. Diversification or developing alternative sources, where feasible, can mitigate these risks.
How does the $66.3 million expenditure align with the strategic importance and operational necessity of the FMS Volcano system?
Assessing alignment requires understanding the FMS Volcano's role in military operations, its technological advantages, and the cost of alternative solutions or inaction. If the system provides a unique, indispensable capability that directly supports national security objectives, the expenditure may be justified despite the lack of competition. A thorough cost-benefit analysis comparing this investment against mission requirements and potential risks is essential.
Industry Classification
NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
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
Address: 4700 NATHAN LN N, MINNEAPOLIS, 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: $66,327,310
Exercised Options: $66,327,310
Current Obligation: $66,327,310
Subaward Activity
Number of Subawards: 18
Total Subaward Amount: $12,567,619
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2024-07-31
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 12:12:00
Last Modified: 2025-12-04
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)