DoD awards $2.23B for Aircraft Fixed Wing, with Northrop Grumman as sole contractor

Contract Overview

Contract Amount: $2,237,430,307 ($2.2B)

Contractor: Teledyne, Inc

Awarding Agency: Department of Defense

Start Date: 2001-03-16

End Date: 2022-12-20

Contract Duration: 7,949 days

Daily Burn Rate: $281.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200106!000169!5700!GU72 !ASC/RWKR !F3365701C4600 !A!N!*!N! !20010316!20030228!008391203!008255408!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP ROAD !SAN DIEGO !CA!92127!59416!073!06!RANCHO BERNARDO !SAN DIEGO !CALIFORNIA!+000005500000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3000!NOT DISCERNABLE OR CLASSIFIED !336411!*!*!1! ! ! !*!*!*!B!*!*!A! !D !U!R!1!001!N!1G!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! !Y! ! !0001!

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $2.24 billion to TELEDYNE, INC for work described as: 200106!000169!5700!GU72 !ASC/RWKR !F3365701C4600 !A!N!*!N! !20010316!20030228!008391203!008255408!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP ROAD !SAN DIEGO !CA!92127!59416!073!06!RANCHO BERNARDO !SAN DIEGO !CALIFORNIA!+000005500000!N!N!000000000000!1510!AIRCRAFT F… Key points: 1. The contract value is substantial at over $2.23 billion. 2. Competition was limited, with Northrop Grumman being the sole source. 3. The risk of overpayment is moderate due to the cost-plus award fee structure. 4. This spending falls within the Defense sector, specifically aircraft manufacturing.

Value Assessment

Rating: fair

The contract value of $2.23 billion for aircraft manufacturing is significant. Benchmarking is difficult without specific unit details, but the duration and cost-plus nature suggest potential for cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The sole-source nature of this large contract raises concerns about taxpayer value and whether a more competitive process could have secured better pricing.

Public Impact

Significant taxpayer funds allocated to a single defense contractor. Potential for reduced innovation and efficiency due to lack of competition. Impact on the defense industrial base and supply chain stability. Ensuring the delivered aircraft meet critical defense needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

  • Sole-source award
  • Cost-plus contract type
  • Long contract duration

Positive Signals

  • Critical defense procurement
  • Established contractor with relevant experience

Sector Analysis

This contract is within the Defense sector, specifically for aircraft manufacturing. Spending in this area is driven by national security requirements and technological advancements in aviation.

Small Business Impact

There is no indication of small business participation in this sole-source contract. Efforts to include small businesses in subcontracting roles would be beneficial.

Oversight & Accountability

Oversight is crucial for sole-source, cost-plus contracts to ensure cost control and performance. The Defense Contract Management Agency's role is vital in monitoring this award.

Related Government Programs

  • Aircraft Manufacturing
  • Department of Defense Contracting
  • Defense Contract Management Agency Programs

Risk Flags

  • Sole-source award limits competition and price discovery.
  • Cost-plus award fee structure can lead to cost overruns.
  • Long contract duration increases exposure to changing requirements and economic factors.
  • Lack of transparency on specific aircraft models and their necessity.
  • Potential for contractor lock-in.

Tags

aircraft-manufacturing, department-of-defense, ca, definitive-contract, billion-dollar

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.24 billion to TELEDYNE, INC. 200106!000169!5700!GU72 !ASC/RWKR !F3365701C4600 !A!N!*!N! !20010316!20030228!008391203!008255408!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP ROAD !SAN DIEGO !CA!92127!59416!073!06!RANCHO BERNARDO !SAN DIEGO !CALIFORNIA!+000005500000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3000!NOT DISCERNABLE OR CLASSIFIED !336411!*!*!1! ! ! !*!*!*!B!*!*!A! !D !U!R!1!001!N!1G!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! !Y! ! !0001!

Who is the contractor on this award?

The obligated recipient is TELEDYNE, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $2.24 billion.

What is the period of performance?

Start: 2001-03-16. End: 2022-12-20.

What specific aircraft are being procured under this contract, and what is their intended operational role?

The data specifies 'Aircraft Fixed Wing' and 'Airframes and Spares' under the PSC code 1510. The exact models and their specific roles within the Department of Defense are not detailed in this record. Further investigation into contract line items or associated documentation would be necessary to ascertain the precise aircraft types and their strategic or tactical applications.

Given the sole-source nature and cost-plus award fee structure, what mechanisms are in place to mitigate the risk of cost overruns and ensure fair pricing?

The cost-plus award fee (CPAF) structure inherently carries a risk of cost overruns. Mitigation relies heavily on robust government oversight, including detailed audits, performance monitoring against established award criteria, and negotiation of fee structures that incentivize efficiency. The Defense Contract Management Agency (DCMA) plays a critical role in this oversight.

How does this significant sole-source award impact the broader competitive landscape within the fixed-wing aircraft manufacturing sector for the DoD?

A large sole-source award can reduce opportunities for other potential contractors, potentially stifling competition and innovation in the long run. It may signal a reliance on a specific incumbent or a lack of viable alternatives for a particular capability. This could influence future market dynamics and the government's ability to secure competitive pricing on subsequent procurements.

Industry Classification

NAICS: ManufacturingAerospace Product and Parts ManufacturingAircraft 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: ATI Inc.

Address: 17066 GOLDENTOP ROAD, SAN DIEGO, CA, 92127

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $2,367,302,283

Exercised Options: $2,284,604,514

Current Obligation: $2,237,430,307

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline

Start Date: 2001-03-16

Current End Date: 2022-12-20

Potential End Date: 2022-12-20 00:00:00

Last Modified: 2022-08-17

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