DoD's $39.8M Northrop Grumman Contract for Aircraft Manufacturing: Sole-Source Award Raises Oversight Concerns

Contract Overview

Contract Amount: $39,860,084 ($39.9M)

Contractor: Northrop Grumman Corporation

Awarding Agency: Department of Defense

Start Date: 2002-11-08

End Date: 2007-12-17

Contract Duration: 1,865 days

Daily Burn Rate: $21.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.9 million to NORTHROP GRUMMAN CORPORATION for work described as: Key points: 1. Significant contract value of $39.8 million awarded to a single large business. 2. Lack of competition (sole-source) suggests potential for inflated pricing and reduced value. 3. Long contract duration (5 years) increases risk exposure and limits flexibility. 4. Aircraft Manufacturing sector often involves complex, high-value procurements, necessitating robust oversight.

Value Assessment

Rating: questionable

The contract's value of $39.8 million for aircraft manufacturing, awarded without competition, makes a direct pricing assessment difficult. Without benchmarks from competing bids, it's hard to determine if the price reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for a nearly $40 million contract likely results in a higher cost to taxpayers than if multiple vendors had vied for the work.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The long duration of the contract could mean the government is locked into potentially outdated technology or services. Limited transparency in the sole-source award process can erode public trust in government spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
No small business participation noted

Positive Signals

Awarded to a known large defense contractor
Firm Fixed Price contract type can provide cost certainty

Sector Analysis

The aircraft manufacturing sector is a critical component of national defense, often characterized by high R&D costs and specialized expertise. Spending benchmarks in this area are typically high, but competitive processes are crucial for ensuring value.

Small Business Impact

The data indicates no small business participation in this contract. For large sole-source awards, it's important to assess if subcontracting opportunities were explored to benefit small businesses.

Oversight & Accountability

The sole-source nature of this award warrants close scrutiny from oversight bodies to ensure the price paid was fair and reasonable and that the government received the best possible value.

Related Government Programs

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

Risk Flags

Potential for overpricing due to lack of competition.
Risk of vendor lock-in with a single provider.
Limited transparency in the procurement process.
No indication of small business involvement.
Long contract duration increases exposure to changing market conditions or technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.9 million to NORTHROP GRUMMAN CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN CORPORATION.

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 $39.9 million.

What is the period of performance?

Start: 2002-11-08. End: 2007-12-17.

What justification was provided for the sole-source award, and was it sufficiently documented to ensure fair pricing?

Sole-source awards require strong justification, typically citing unique capabilities or urgent needs. Without access to this documentation, it's impossible to verify if the justification was adequate to ensure fair pricing and prevent potential overpayment. Robust justification is key to mitigating risks associated with non-competitive contracts.

How was the 'fair and reasonable' price determined in the absence of competitive bids?

Determining a 'fair and reasonable' price for a sole-source contract often relies on historical pricing data, catalog prices, or independent government cost estimates. The contracting officer must perform thorough due diligence to validate these methods, as the lack of competition removes the primary mechanism for price discovery.

What mechanisms were in place to ensure effective performance and accountability over the 5-year contract duration?

For long-term sole-source contracts, effective performance monitoring and accountability are paramount. This typically involves detailed performance metrics, regular progress reviews, and clear deliverables. Without these, the government risks receiving substandard products or services and may struggle to address issues that arise over the contract's lifespan.

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

Address: 8900 WASHINGTON BLVD, PICO RIVERA, CA, 90660

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365797D0012

IDV Type: IDC

Timeline