DoD awards $237M contract for aircraft parts, with Northrop Grumman as prime

Contract Overview

Contract Amount: $236,958,637 ($237.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 1999-12-22

End Date: 1999-12-31

Contract Duration: 9 days

Daily Burn Rate: $26.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $237.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Contract value represents a significant investment in aircraft component manufacturing. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The fixed-price contract type shifts performance risk to the contractor. 4. The duration of the contract is relatively short, indicating potential for future re-competition. 5. The contractor has a substantial presence in the aerospace and defense sector. 6. The contract is for aircraft parts, a critical component of military readiness.

Value Assessment

Rating: good

The contract value of $237 million for aircraft parts appears reasonable given the scope and duration. Benchmarking against similar contracts for specialized aircraft components is challenging without more granular data on specific parts. However, the fixed-price nature suggests the government secured a defined cost for the deliverables, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of six bidders suggests a competitive environment, which generally leads to better price discovery and potentially more favorable terms for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the strength of the competition.

Taxpayer Impact: A competitive bidding process for this contract helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among suppliers.

Public Impact

The primary beneficiaries are the Department of Defense and its operational readiness, ensuring access to necessary aircraft parts. The contract supports the manufacturing and supply of critical aircraft components, maintaining the airworthiness of military aircraft. The geographic impact is primarily centered around the contractor's facilities in Illinois, with potential ripple effects on the national aerospace supply chain. The contract supports jobs within the aerospace manufacturing sector, contributing to the skilled workforce in this specialized industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the sole prime contractor faces unforeseen issues.
Long-term reliance on a single contractor for critical parts could limit future negotiation leverage.

Positive Signals

Awarded through full and open competition, indicating a healthy market.
Fixed-price contract type transfers cost overrun risk to the contractor.
Contractor's established presence in the industry suggests a lower risk of performance failure.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and stringent quality requirements. This contract for aircraft parts falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry. Spending in this area is crucial for maintaining the operational capabilities of military fleets. Comparable spending benchmarks would typically be found within broader DoD procurement data for aviation sustainment and component manufacturing.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses in its supply chain. Further investigation into subcontracting plans would be necessary to assess the full impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Component Manufacturing
Defense Logistics and Supply Chain Management
Military Aircraft Sustainment

Risk Flags

Contract duration is short, requiring potential for frequent re-competition and associated administrative costs.
Specific details on quality assurance and performance metrics are not publicly available.
Potential for supply chain concentration risk if Northrop Grumman relies heavily on a limited number of sub-tier suppliers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $237.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS 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 $237.0 million.

What is the period of performance?

Start: 1999-12-22. End: 1999-12-31.

What is Northrop Grumman's track record with similar Department of Defense contracts?

Northrop Grumman Systems Corporation has a long and extensive history of contracting with the Department of Defense across various platforms and services. They are a major defense contractor involved in aircraft manufacturing, shipbuilding, space systems, and defense electronics. Their track record includes numerous large-scale contracts for complex systems, such as the B-2 bomber, E-2 Hawkeye, and various missile defense programs. While specific performance data for individual contracts is often proprietary, their continued success in securing significant DoD awards suggests a generally positive track record in terms of technical capability, program execution, and meeting contractual requirements. However, like any large contractor, they have also faced scrutiny and challenges on specific programs over the years, necessitating ongoing oversight by the DoD.

How does the $237 million contract value compare to other aircraft parts procurements by the DoD?

The $237 million contract value for aircraft parts is a substantial sum, placing it in the mid-to-large range for component procurements. The DoD procures a vast array of aircraft parts, from common consumables to highly specialized, custom-manufactured components for advanced platforms. Without knowing the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' covered by this contract (e.g., engines, avionics, structural components, or general repair parts), a direct comparison is difficult. However, for critical or complex parts, values in the tens or hundreds of millions of dollars are not uncommon over the life of a contract, especially when considering sustainment for major weapon systems. The number of bidders (6) suggests that the market for these parts is sufficiently competitive to warrant such an award.

What are the primary risks associated with this type of contract for the government?

The primary risks for the government with this firm fixed-price contract are related to potential contractor underperformance or unforeseen market shifts. While the fixed price mitigates cost overrun risk, the government still faces the risk that the contractor may not deliver the parts on time, to the required quality standards, or that the contractor might face financial instability, impacting supply. If the parts are highly specialized, the government could also face risks related to obsolescence or the availability of alternative suppliers in the future, potentially leading to higher prices upon re-competition. Furthermore, the government relies on the contractor's robust quality control and supply chain management to ensure the integrity and availability of these critical aircraft components.

How does the duration of the contract (9 months) influence its overall value and risk?

The relatively short duration of 9 months for this $237 million contract suggests it may be for a specific batch of parts, a particular upgrade, or a short-term sustainment need rather than the entire lifecycle support of a component. This short duration can be advantageous for the government as it allows for more frequent re-evaluation of the market and potential for competitive re-bidding, which can help control long-term costs and ensure access to the latest technologies or more competitive pricing. However, it also means that the administrative overhead of contract management and re-competition will be recurring. For the contractor, a shorter duration might necessitate a more rapid production ramp-up and delivery schedule, potentially increasing their internal execution risk if not managed efficiently.

What is the significance of the contract being for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'?

The classification 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS code 336413) indicates that this contract covers a broad category of components that are not specifically engine parts, airframe structures, or avionics, but are nonetheless essential for aircraft operation and maintenance. This could include items like landing gear components, hydraulic systems parts, electrical harnesses, interior fittings, or specialized tools and equipment. The breadth of this category means the contract likely supports a diverse range of aircraft platforms or sustainment activities. It highlights the complexity of the aerospace supply chain, where numerous specialized manufacturers contribute to the final operational capability of military aircraft.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 600 HICKS RD, ROLLING MEADOW, IL

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline