Northrop Grumman Awarded $151.6M for B-2 Stealth Aircraft Parts, Raising Concerns Over Competition

Contract Overview

Contract Amount: $149,656,434 ($149.7M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2001-01-12

End Date: 2006-06-30

Contract Duration: 1,995 days

Daily Burn Rate: $75.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200108!000036!5700!GU22 !ASC/YSK !F3365799D0028 !A!N!*!N!0008 !20010112!20011231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000019500000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3ABK!B-2 STEALTH !336411!*!*!5!A!S! !*!*!*!B!*!*!N!Z!D !N!J!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !B!B!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: PICO RIVERA, LOS ANGELES County, CALIFORNIA, 90660

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $149.7 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200108!000036!5700!GU22 !ASC/YSK !F3365799D0028 !A!N!*!N!0008 !20010112!20011231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS A… Key points: 1. Significant contract value for specialized aircraft components. 2. Sole-source award limits competitive pricing and innovation. 3. Potential for cost overruns due to lack of market pressure. 4. Sector: Defense - Aircraft Manufacturing.

Value Assessment

Rating: questionable

The contract value of $151.6M for aircraft parts is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar sole-source procurements for specialized defense components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.

Taxpayer Impact: The lack of competition on this large contract may result in taxpayers paying a premium for aircraft parts that could potentially be acquired at a lower cost through a competitive process.

Public Impact

Taxpayers may be overpaying for critical B-2 bomber components. Limited transparency in pricing due to sole-source award. Potential impact on future defense procurement strategies if sole-sourcing becomes a norm.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for inflated pricing

Positive Signals

Supports critical defense platform (B-2 Stealth)
Ensures supply chain for essential aircraft parts

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is often characterized by high R&D costs, long production cycles, and significant reliance on specialized, proprietary technologies.

Small Business Impact

There is no indication of small business participation in this sole-source award. The nature of specialized defense manufacturing often involves large prime contractors, potentially excluding smaller businesses from direct involvement.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of Defense's contracting officers must rigorously justify the sole-source justification and monitor contract performance closely.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award lacks competition.
Potential for inflated pricing.
Limited transparency in cost build-up.
Risk of vendor lock-in.
Impact on overall defense budget efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $149.7 million to NORTHROP GRUMMAN SYSTEMS CORP. 200108!000036!5700!GU22 !ASC/YSK !F3365799D0028 !A!N!*!N!0008 !20010112!20011231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000019500000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3ABK!B-2 STEALTH !336411!*!*!5!A!S! !*!*!*!B!*!*!N!

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 Air Force).

What is the total obligated amount?

The obligated amount is $149.7 million.

What is the period of performance?

Start: 2001-01-12. End: 2006-06-30.

What is the justification for the sole-source award, and has an alternatives analysis been performed?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. An alternatives analysis is a critical step to ensure that no other viable sources exist, even if they require some development or modification to meet the need. Without this analysis, the government risks not obtaining the best value.

How does the pricing of this contract compare to historical data for similar B-2 component procurements?

Comparing current pricing to historical data is essential, especially for sole-source contracts. Analyzing trends in unit costs, escalation clauses, and overhead rates can reveal significant deviations. If prices have increased disproportionately without clear justification (e.g., inflation, material cost changes), it warrants further investigation into the contractor's pricing structure and the government's negotiation effectiveness.

What is the long-term strategy for ensuring competitive sourcing for B-2 aircraft sustainment and parts?

The long-term strategy should focus on fostering competition where feasible. This could involve encouraging technology transfer, developing second-source capabilities, or breaking down complex requirements into smaller, more competitive packages. Proactive market research and engagement with potential new entrants are vital to avoid perpetual sole-source reliance and ensure cost-effectiveness over the aircraft's lifecycle.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: 3520 E AVE M, PALMDALE, CA, 93550

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline