DoD Awards $536M for Aircraft Manufacturing to Northrop Grumman, Lacking Competition

Contract Overview

Contract Amount: $536,335,987 ($536.3M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2012-10-17

End Date: 2016-12-31

Contract Duration: 1,536 days

Daily Burn Rate: $349.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ACAT 1, B2 UCA FOR DMS TD PHASE 2

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $536.3 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: ACAT 1, B2 UCA FOR DMS TD PHASE 2 Key points: 1. Significant contract value of $536.3M awarded. 2. Sole-source award to Northrop Grumman Systems Corp. 3. High risk due to lack of competition and cost-plus contract type. 4. Aircraft Manufacturing sector with a NAICS code of 336411.

Value Assessment

Rating: questionable

The contract is Cost Plus Fixed Fee, which can lead to cost overruns. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition likely resulted in a higher price than if multiple vendors had bid, impacting taxpayer funds.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The sole-source nature raises concerns about accountability and efficiency. Reliance on a single contractor for critical aircraft manufacturing components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of competition
High contract value

Positive Signals

Contract awarded to a known entity (Northrop Grumman)

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for ACAT 1, B2 UCA FOR DMS TD PHASE 2. Spending benchmarks in this specialized sector are often high, but competition is key to ensuring value.

Small Business Impact

The contract was not awarded to small businesses, and the sole-source nature further limits opportunities for small business participation in this specific award.

Oversight & Accountability

The sole-source award and cost-plus fee structure warrant close oversight to ensure cost control and prevent potential waste, fraud, and abuse.

Related Government Programs

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

Risk Flags

Lack of competition
Sole-source award
Cost-plus contract type
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $536.3 million to NORTHROP GRUMMAN SYSTEMS CORP. ACAT 1, B2 UCA FOR DMS TD PHASE 2

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 $536.3 million.

What is the period of performance?

Start: 2012-10-17. End: 2016-12-31.

What specific justification was provided for the sole-source award, and how does it align with DoD's policies on competition?

The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are justified by unique capabilities, urgent needs, or lack of viable alternatives. A thorough review would be needed to assess if the justification meets regulatory requirements and if alternative solutions were adequately explored.

What are the projected cost savings if this contract had been competed?

Without a competitive bidding process, it's impossible to provide an exact figure for projected cost savings. However, historical data and industry analysis consistently show that competitive procurements can yield savings ranging from 10% to 30% or more compared to sole-source awards, especially for complex systems like aircraft components.

What measures are in place to ensure cost control and performance accountability given the cost-plus fixed fee structure and lack of competition?

Given the cost-plus fixed fee structure and sole-source nature, robust oversight mechanisms are crucial. This includes detailed cost audits, performance monitoring against defined milestones, and stringent change order management. The Department of Defense should have specific program protection plans and independent cost estimates to validate expenditures.

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 FIXED FEE (U)

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

Financial Breakdown

Contract Ceiling: $536,335,987

Exercised Options: $536,335,987

Current Obligation: $536,335,987

Subaward Activity

Number of Subawards: 47

Total Subaward Amount: $396,518,446

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline