DoD Awards Northrop Grumman $27.8M for MK239 Cartridges, Delivery Expected by June 2027
Contract Overview
Contract Amount: $27,834,857 ($27.8M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-12-30
End Date: 2027-06-30
Contract Duration: 912 days
Daily Burn Rate: $30.5K/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: 30MM MK239 CARTRIDGE, NSN 1305-01-524-0220
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442
Plain-Language Summary
Department of Defense obligated $27.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 30MM MK239 CARTRIDGE, NSN 1305-01-524-0220 Key points: 1. Significant award to a major defense contractor for essential ammunition. 2. Competition method indicates potential for price discovery, but source exclusion warrants scrutiny. 3. Risk of supply chain disruption for critical defense components. 4. Ammunition manufacturing sector is vital for national security readiness.
Value Assessment
Rating: good
The $27.8 million award appears reasonable given the nature of specialized ammunition. Benchmarking against similar large-scale ammunition contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a limited competition. This method may impact price discovery compared to unrestricted full and open competition.
Taxpayer Impact: Taxpayer funds are being used for essential defense procurement, with the cost efficiency influenced by the limited competition.
Public Impact
Ensures continued supply of critical ammunition for military operations. Supports a key segment of the defense industrial base. Potential impact on readiness if supply is interrupted. Award contributes to the economic activity within the defense manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition raises questions about optimal pricing.
- Reliance on a single contractor for a critical component.
- Potential for cost overruns in long-term contracts.
Positive Signals
- Secures a vital defense supply chain.
- Award to an established defense contractor.
- Clear delivery timeline established.
Sector Analysis
This award falls within the Ammunition (except Small Arms) Manufacturing sector, a critical component of the defense industrial base. Spending in this area is directly tied to national security requirements and geopolitical factors.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large business. There is no indication of small business subcontracting in the provided data.
Oversight & Accountability
Oversight will be crucial to ensure timely delivery, quality control, and adherence to the firm fixed price contract terms by the Department of the Army.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition may lead to suboptimal pricing.
- Potential for supply chain vulnerabilities.
- Dependence on a single contractor for critical defense item.
- Risk of schedule slippage impacting military readiness.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mn, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 30MM MK239 CARTRIDGE, NSN 1305-01-524-0220
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 $27.8 million.
What is the period of performance?
Start: 2024-12-30. End: 2027-06-30.
What specific factors led to the exclusion of other potential sources in this 'full and open competition after exclusion of sources' award?
The exclusion of sources typically occurs when specific technical capabilities, proprietary technology, or unique manufacturing processes are required, making only certain contractors eligible. Understanding these specific requirements for the MK239 cartridge is key to assessing if the exclusion was justified and if it truly limited competition unnecessarily, potentially impacting the final price paid by taxpayers.
How does the per-unit cost of the MK239 cartridge compare to similar ammunition types or previous procurements?
Without specific per-unit cost data or access to historical procurement records for comparable ammunition, a direct benchmark is difficult. However, the $27.8 million award for an unspecified quantity suggests a significant investment. Further analysis would require comparing this contract's unit price against industry standards and prior DoD contracts for similar caliber ammunition to assess value for money.
What is the assessed risk associated with Northrop Grumman's ability to meet the delivery schedule and quality standards for this ammunition?
Northrop Grumman is a major defense contractor with a track record in manufacturing. However, any large-scale production carries inherent risks. The primary risks involve potential production delays, supply chain disruptions for raw materials, and ensuring consistent quality control for a critical defense item. Robust government oversight and quality assurance processes are essential to mitigate these risks.
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, 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: $27,834,857
Exercised Options: $27,834,857
Current Obligation: $27,834,857
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $8,856,291
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W519TC24D0007
IDV Type: IDC
Timeline
Start Date: 2024-12-30
Current End Date: 2027-06-30
Potential End Date: 2027-06-30 00:00:00
Last Modified: 2024-12-30
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