DoD Awards Northrop Grumman $99.9M for M792 Cartridges, Delivery Order Under Existing Contract
Contract Overview
Contract Amount: $99,889,779 ($99.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-09-25
End Date: 2028-09-29
Contract Duration: 1,100 days
Daily Burn Rate: $90.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: 25MM M792 CARTRIDGE
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55442
Plain-Language Summary
Department of Defense obligated $99.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 25MM M792 CARTRIDGE Key points: 1. Significant award to a major defense contractor for essential ammunition. 2. Competition method suggests potential for price discovery, but exclusion of sources warrants scrutiny. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces inflation risk. 4. Sector focus on Ammunition Manufacturing is critical for defense readiness.
Value Assessment
Rating: good
The award of $99.9M for M792 cartridges appears reasonable given the quantity and contract type. Benchmarking against similar ammunition contracts would provide a more precise valuation, but the fixed-price component with economic adjustments suggests a controlled cost structure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This limited competition method, while potentially justified, may have restricted the pool of bidders and could impact the final price achieved compared to unrestricted full and open competition.
Taxpayer Impact: Taxpayer funds are being used for a critical defense procurement. The limited competition and economic price adjustment clauses warrant close monitoring to ensure cost-effectiveness and prevent excessive spending due to market fluctuations.
Public Impact
Ensures supply of essential M792 cartridges for military operations. Supports a major defense contractor, potentially impacting jobs and industry stability. Potential for price increases due to economic adjustments could affect overall defense budget. Transparency in the 'exclusion of sources' is important for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) clause can increase costs with inflation.
- Limited competition ('exclusion of sources') may reduce price competitiveness.
- Contract duration extends over several years, increasing exposure to market volatility.
Positive Signals
- Award to a known, established defense contractor.
- Delivery order under an existing contract may indicate streamlined procurement.
- Clear end date for contract performance.
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 military readiness and geopolitical factors. Benchmarks are difficult without specific munition types, but consistent, competitive sourcing is key.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Northrop Grumman is a large corporation. There is no indication of subcontracting plans for small businesses within this specific award notice.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Oversight will be crucial to monitor performance, manage the economic price adjustment, and ensure compliance with the terms of the limited competition.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost escalation due to EPA.
- Limited competition may not yield best value.
- Lack of small business participation noted.
- Long contract duration increases risk exposure.
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 $99.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 25MM M792 CARTRIDGE
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $99.9 million.
What is the period of performance?
Start: 2025-09-25. End: 2028-09-29.
What specific justification was provided for excluding other potential sources from this competition, and how does it align with FAR regulations?
The justification for excluding other sources is critical for understanding the procurement's integrity. Agencies must document compelling reasons, such as unique capabilities or national security imperatives, to limit competition. A thorough review of the Justification for Other than Full and Open Competition (JOFOC) document is necessary to assess its validity and ensure it adheres to Federal Acquisition Regulation (FAR) Part 6.
How will the economic price adjustment clause be monitored to mitigate potential cost overruns due to inflation?
Monitoring the economic price adjustment (EPA) clause requires vigilant oversight of relevant economic indices (e.g., CPI, PPI) and contract terms. The contracting officer must regularly review and validate price adjustments against established benchmarks and ensure they accurately reflect actual cost increases, not speculative ones. Proactive communication with the contractor about cost drivers is also essential.
What is the projected impact of this award on the overall readiness and supply chain for M792 cartridges?
This award is intended to bolster the supply chain for M792 cartridges, ensuring availability for military operations. Its impact on overall readiness depends on the quantity procured relative to demand, the contractor's production capacity, and the reliability of their supply chain. Consistent delivery and quality are paramount for maintaining operational readiness.
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: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
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: $99,889,779
Exercised Options: $99,889,779
Current Obligation: $99,889,779
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $3,224,895
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: 2025-09-25
Current End Date: 2028-09-29
Potential End Date: 2028-09-29 00:00:00
Last Modified: 2026-02-09
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