DoD's B-2 PDM Contract: $120M for Northrop Grumman, Lacking Competition
Contract Overview
Contract Amount: $120,282,483 ($120.3M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2017-01-01
End Date: 2020-09-30
Contract Duration: 1,368 days
Daily Burn Rate: $87.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF CY17 B-2 PROGRAMMED DEPOT MAINTENANCE (PDM)
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $120.3 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF CY17 B-2 PROGRAMMED DEPOT MAINTENANCE (PDM) Key points: 1. Significant spending on a critical defense asset. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Long contract duration (3 years) may impact price flexibility. 4. Aircraft manufacturing sector context is important for benchmarking.
Value Assessment
Rating: questionable
The contract value of $120.3M for programmed depot maintenance on the B-2 bomber is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential market alternatives or historical maintenance costs for similar aircraft.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman, was considered. This lack of competition limits price discovery and may lead to higher costs than if multiple bidders had vied for the work.
Taxpayer Impact: The absence of competition for this large contract means taxpayers may be paying a premium for B-2 bomber maintenance, as there was no market pressure to drive down costs.
Public Impact
Impacts the operational readiness of the B-2 bomber fleet. Directly benefits a single, large defense contractor. Highlights potential inefficiencies in sole-source defense contracting.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Essential maintenance for a strategic asset
Sector Analysis
This contract falls within the aircraft manufacturing sector, specifically focusing on specialized depot maintenance for a high-value, complex military aircraft. Benchmarking would require comparison to similar PDM contracts for advanced military platforms, which are often sole-sourced.
Small Business Impact
This contract was awarded to Northrop Grumman Systems Corp, a large prime contractor. There is no indication of small business participation in this specific award, which is common for highly specialized sole-source defense contracts.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the Department of Defense obtained the best possible value. Oversight should focus on the justification for the sole-source award and the negotiation process for the firm-fixed-price terms.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing due to no competitive pressure.
- Long contract duration may not reflect evolving needs or technologies.
- Limited transparency on cost justification.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $120.3 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF CY17 B-2 PROGRAMMED DEPOT MAINTENANCE (PDM)
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 $120.3 million.
What is the period of performance?
Start: 2017-01-01. End: 2020-09-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative sources reasonably considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for continuity with existing systems. For the B-2 PDM, Northrop Grumman's deep knowledge and historical involvement with the platform likely formed the basis. However, a thorough review would confirm if any viable alternatives were explored and why they were deemed unsuitable.
How does the per-unit cost of this B-2 PDM compare to similar maintenance contracts for other advanced military aircraft, considering the sole-source nature?
Directly comparing the per-unit cost is challenging due to the sole-source award and the unique nature of the B-2 platform. Without competitive bids, it's difficult to establish a true market benchmark. However, agencies should internally benchmark against historical B-2 PDM costs or costs for comparable deep maintenance on other strategic assets, adjusting for complexity and inflation.
What is the potential long-term financial impact on the DoD budget if sole-source awards for critical maintenance become the norm for aging, complex platforms?
If sole-source awards for critical maintenance become the norm, the long-term financial impact could be significant. It risks eroding competitive pressure, potentially leading to consistently higher prices for essential services. This could strain defense budgets, diverting funds from other critical areas or necessitating increased appropriations over time.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
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: $232,317,281
Exercised Options: $232,317,281
Current Obligation: $120,282,483
Subaward Activity
Number of Subawards: 77
Total Subaward Amount: $6,618,974
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA861614D6060
IDV Type: IDC
Timeline
Start Date: 2017-01-01
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2023-09-11
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