Northrop Grumman awarded $16.5M for facilities support, with a significant portion for aircraft maintenance

Contract Overview

Contract Amount: $16,495,787 ($16.5M)

Contractor: Northrop Grumman Corporation

Awarding Agency: Department of Defense

Start Date: 2001-08-16

End Date: 2021-05-24

Contract Duration: 7,221 days

Daily Burn Rate: $2.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: 200111!000031!5700!GU60 !ASC/EMK !F3365700L2054 !A!N!*!N!P00003 !20010816!20050101!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000000048984!N!N!000000000000!1510!AIRCRAFT FIXED WING !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !561210!*!*!3! ! !B!*!*!*!B!*!*!A! !D !U!S!1!001!N!1B!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $16.5 million to NORTHROP GRUMMAN CORPORATION for work described as: 200111!000031!5700!GU60 !ASC/EMK !F3365700L2054 !A!N!*!N!P00003 !20010816!20050101!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!55156!037!06!PALMDALE !LOS A… Key points: 1. Contract awarded for facilities support services, including a substantial component for aircraft fixed-wing maintenance. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. Long duration of over 7,200 days suggests a need for sustained support, but also potential for cost overruns. 4. The contractor, Northrop Grumman, is a major defense entity with extensive experience in aerospace and defense services. 5. Services are concentrated in California, specifically Palmdale and Los Angeles, indicating a regional focus. 6. The contract type is Cost No Fee, which offers limited incentive for cost control by the contractor.

Value Assessment

Rating: questionable

The contract value of $16.5 million for facilities support services, including aircraft maintenance, requires careful benchmarking. Given the 'Cost No Fee' contract type, there's a reduced incentive for the contractor to manage costs efficiently. Without competition, it's difficult to assess if the pricing reflects fair market value. The long duration also introduces risk, as costs can escalate over time without clear performance metrics driving efficiency. Further analysis of the specific services rendered and their necessity would be required for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It also raises questions about whether a competitive process was fully explored or justified.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, there is less assurance that the government secured the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically units requiring facilities support and aircraft maintenance in the Palmdale, California area. Services delivered include general facilities support and specialized maintenance for fixed-wing aircraft. The geographic impact is concentrated in California, particularly within Los Angeles County, supporting local operations. Workforce implications may include employment opportunities for personnel skilled in facilities management and aircraft maintenance within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost No Fee contract type offers limited incentive for contractor cost control.
Sole-source award bypasses competitive bidding, potentially leading to higher costs for taxpayers.
Long contract duration increases the risk of cost escalation and scope creep over time.
Lack of detailed service breakdown makes it difficult to assess the true value for money.
Concentration of services in a specific region may limit broader economic benefits.

Positive Signals

Contract awarded to a major defense contractor with established capabilities.
Services directly support critical defense operations, including aircraft maintenance.
Long duration indicates a sustained need for these essential services.
Contract is managed by the Defense Contract Management Agency, suggesting oversight.

Sector Analysis

This contract falls within the Facilities Support Services sector, which encompasses a broad range of services necessary for the operation and maintenance of government facilities. This includes everything from janitorial services to complex infrastructure management and specialized maintenance. The inclusion of aircraft fixed-wing maintenance suggests a specialized niche within this broader category, often associated with aerospace and defense contracts. Comparable spending benchmarks for facilities support can vary widely based on the scope and complexity of services, but large-scale contracts like this often represent significant investments in maintaining operational readiness for military installations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. Furthermore, there is no explicit mention of subcontracting plans for small businesses. This suggests that the primary contract is likely being performed by the large prime contractor, Northrop Grumman, with limited direct opportunities for small businesses within this specific award. The absence of a small business focus could mean missed opportunities to foster the small business ecosystem within the defense contracting space.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to ensure compliance with terms and conditions. However, the 'Cost No Fee' (CNF) nature of the contract presents a challenge for oversight, as it offers minimal incentive for the contractor to control costs. Transparency may be limited due to the sole-source award and the lack of detailed public breakdowns of service costs. Inspector General jurisdiction would typically apply to investigations of fraud, waste, or abuse related to federal contracts.

Related Government Programs

Aircraft Maintenance Services
Base Operations Support
Facilities Engineering
Logistics and Supply Chain Management
Defense Contracting
Aerospace Support Services

Risk Flags

Sole-source award
Cost-reimbursable contract type (Cost No Fee)
Long contract duration
Lack of detailed service cost breakdown

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.5 million to NORTHROP GRUMMAN CORPORATION. 200111!000031!5700!GU60 !ASC/EMK !F3365700L2054 !A!N!*!N!P00003 !20010816!20050101!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000000048984!N!N!000000000000!1510!AIRCRAFT FIXED WING !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !561210!*!*!3! ! !B!*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN 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 $16.5 million.

What is the period of performance?

Start: 2001-08-16. End: 2021-05-24.

What is the specific breakdown of services provided under this contract, particularly the allocation of funds between general facilities support and aircraft maintenance?

The provided data indicates the primary NAICS code is 561210 (Facilities Support Services) and the PSC code is C9E (Aircraft Fixed Wing). While the total award is $16.5 million, the exact dollar allocation between general facilities support and the specific 'Aircraft Fixed Wing' maintenance is not detailed in the provided snippet. The PSC code suggests a significant portion is dedicated to aircraft maintenance. Further investigation into contract line item numbers (CLINs) or detailed service descriptions would be necessary to quantify the exact split. This information is crucial for understanding the true nature of the expenditure and benchmarking the costs appropriately.

Given the 'Cost No Fee' (CNF) contract type, what mechanisms are in place to ensure cost control and prevent contractor inefficiency?

The 'Cost No Fee' (CNF) contract type inherently places the financial risk on the government, as the contractor is reimbursed for allowable costs without any profit or incentive fee. This means oversight mechanisms are critical. The Defense Contract Management Agency (DCMA) is responsible for administering the contract, which includes auditing costs and ensuring compliance with the contract's terms. However, without a fee tied to performance or cost savings, the contractor has limited motivation to be efficient beyond fulfilling the basic contractual requirements. Robust government oversight, detailed cost reporting, and potentially performance metrics (if any were included despite the CNF structure) are essential to mitigate the risks associated with this contract type.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data explicitly states the contract was 'NOT COMPETED' (ct: NOT COMPETED), indicating a sole-source or limited competition award. Justifications for sole-source awards typically fall under specific exceptions in federal acquisition regulations, such as the uniqueness of the service or supply, the urgency of the need, or the inability to obtain offers from multiple responsible sources. Without further documentation (like a Justification for Other Than Full and Open Competition - JOFOC), the specific reason remains unclear. This lack of competition raises concerns about whether the government explored all avenues to secure the best value and potentially missed opportunities for cost savings through a competitive process.

How does the $16.5 million contract value compare to historical spending on similar facilities support and aircraft maintenance services by the Department of Defense?

Benchmarking the $16.5 million award requires comparing it to similar contracts for facilities support and aircraft maintenance within the Department of Defense (DoD). Historical spending data for contracts with NAICS code 561210 and PSC code C9E would be relevant. Factors such as contract duration, geographic location, specific services included (e.g., type of aircraft, scope of facility maintenance), and the economic climate at the time of award significantly influence cost. A preliminary assessment suggests that $16.5 million over a period potentially exceeding 6 years (7221 days) is a substantial, but not necessarily excessive, amount for specialized support services at a major defense installation. However, a detailed analysis would involve comparing unit costs, labor rates, and overhead allocations against similar DoD contracts awarded over the past several years.

What are the potential risks associated with the long contract duration of over 7,200 days (approximately 20 years)?

A contract duration of over 7,200 days (approximately 20 years) presents several significant risks. Firstly, it increases the likelihood of cost escalation due to inflation, changes in labor costs, and potential unforeseen increases in material prices over such an extended period. Secondly, the 'Cost No Fee' structure exacerbates this risk, as the government bears the brunt of any cost increases without the contractor having a strong incentive to mitigate them. Thirdly, long-term contracts can lead to vendor lock-in, making it difficult to adapt to new technologies or changing requirements. Finally, the extended timeline increases the probability of scope creep or poorly defined requirements becoming problematic over time, potentially leading to disputes and cost overruns. Regular reviews and potential re-negotiations would be crucial to manage these risks.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $490,150,719

Exercised Options: $395,192,512

Current Obligation: $16,495,787

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline