DoD Awards Northrop Grumman $362.7M for B-2 Bomber Sustainment

Contract Overview

Contract Amount: $542,083,553 ($542.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2004-08-27

End Date: 2008-12-30

Contract Duration: 1,586 days

Daily Burn Rate: $341.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200411!000088!5700!GU22 !ASC/YSK !F3365799D0028 !A!N! !N!0023 ! !20040827!20081230!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000000400000!N!N!000000000000!AC65!RDTE/ELECTRONICS&COMMUNICATION EQ-ENG/MANUF DEV !A1C!OTHER AIRCRAFT EQUIPMENT !376 !B-2 RMP !336411!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!N!R!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! !Y! ! !0001! !

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $542.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200411!000088!5700!GU22 !ASC/YSK !F3365799D0028 !A!N! !N!0023 ! !20040827!20081230!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS … Key points: 1. Significant contract value for sustainment of a critical defense asset. 2. Sole-source award raises questions about competition and price discovery. 3. Long-term contract duration suggests ongoing need and potential for cost overruns. 4. Focus on aircraft equipment manufacturing and development.

Value Assessment

Rating: questionable

The contract value of $362.7 million over approximately 4.3 years is substantial. Benchmarking is difficult without specific details on the services provided, but the sole-source nature raises concerns about whether this represents a fair price compared to potential competitive bids.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: The sole-source nature of this large contract could lead to higher taxpayer costs due to the absence of competitive pressure to reduce prices.

Public Impact

Supports the operational readiness of the B-2 Spirit bomber fleet. Ensures continued employment and economic activity within the aerospace sector. Highlights the government's reliance on specific contractors for specialized defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for cost overruns due to long duration
Limited transparency on pricing justification

Positive Signals

Supports critical defense capability
Long-term sustainment plan
Experienced contractor

Sector Analysis

This contract falls within the Defense sector, specifically related to aircraft sustainment and manufacturing. Spending in this area is often characterized by high costs, long procurement cycles, and a reliance on a few specialized contractors.

Small Business Impact

This contract was awarded to a large corporation, Northrop Grumman Systems Corp. There is no indication of small business participation in this specific award, which is common for large, sole-source defense contracts.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the pricing is justified and that future opportunities for competition are explored to maximize value for taxpayers.

Related Government Programs

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

Risk Flags

Sole-source award limits competition.
Potential for cost escalation over the contract duration.
Lack of transparency on specific service details.
Reliance on a single contractor for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $542.1 million to NORTHROP GRUMMAN SYSTEMS CORP. 200411!000088!5700!GU22 !ASC/YSK !F3365799D0028 !A!N! !N!0023 ! !20040827!20081230!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000000400000!N!N!000000000000!AC65!RDTE/ELECTRONICS&COMMUNICATION EQ-ENG/MANUF DEV !A1C!OTHER AIRCRAFT EQUIPMENT !376 !B-2 RMP !336411!E! !5!B!S! ! ! !99990

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 $542.1 million.

What is the period of performance?

Start: 2004-08-27. End: 2008-12-30.

What specific sustainment activities are covered under this contract, and how do they contribute to the overall readiness of the B-2 fleet?

The contract covers sustainment for the B-2 'Spirit' bomber, likely including maintenance, repair, and upgrades for critical electronic and communication equipment. These activities are essential for ensuring the bomber's operational readiness and extending its service life, a key component of national defense strategy.

Given the sole-source nature, what mechanisms are in place to ensure cost reasonableness and prevent potential price gouging?

While sole-source awards limit direct price competition, the government typically employs rigorous cost analysis, audits, and negotiation strategies. The contract type (Cost Plus Award Fee) suggests incentives for performance and cost control, but close monitoring by the Air Force is crucial to ensure value.

How does this contract align with the Air Force's long-term strategy for the B-2 bomber fleet, and what are the implications for future modernization or replacement programs?

This contract focuses on sustaining the existing B-2 fleet, indicating its continued importance in the near to medium term. It suggests that significant modernization or replacement programs are not imminent, but this sustainment spending could be factored into future budget decisions for next-generation platforms.

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: COST PLUS AWARD FEE (R)

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

Financial Breakdown

Contract Ceiling: $351,793,418

Exercised Options: $351,793,418

Current Obligation: $542,083,553

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline