DoD's $41.1M B-2 Software Sustainment Contract Awarded to Northrop Grumman

Contract Overview

Contract Amount: $41,141,448 ($41.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2018-01-01

End Date: 2018-12-31

Contract Duration: 364 days

Daily Burn Rate: $113.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-2 CY18 SOFTWARE SUSTAINMENT

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $41.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: B-2 CY18 SOFTWARE SUSTAINMENT Key points: 1. Significant contract value for specialized aircraft software. 2. Sole-source award raises questions about competition and pricing. 3. High risk associated with critical defense system sustainment. 4. Aircraft manufacturing sector sees substantial defense spending.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to benchmark pricing against similar sustainment services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding for this critical software sustainment.

Public Impact

Ensures continued operational readiness of the B-2 bomber fleet. Supports advanced software maintenance for a key strategic asset. Potential for cost inefficiencies due to sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of transparency in pricing

Positive Signals

Ensures critical system sustainment
Supports experienced contractor

Sector Analysis

This contract falls within the aircraft manufacturing sector, specifically supporting the sustainment of software for the B-2 bomber. Defense spending in this area is crucial for maintaining advanced military capabilities.

Small Business Impact

The contract was awarded to Northrop Grumman Systems Corp, a large business. There is no indication of small business participation in this specific award, which is common for highly specialized defense contracts.

Oversight & Accountability

Oversight is crucial for cost-plus fixed-fee contracts, especially sole-source awards, to ensure the government receives fair value. The Department of the Air Force is responsible for monitoring performance and costs.

Related Government Programs

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

Risk Flags

Sole-source award limits competition.
Cost-plus contract type can lead to cost overruns.
Lack of transparency in pricing without competition.
Potential for contractor dependency and price escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.1 million to NORTHROP GRUMMAN SYSTEMS CORP. B-2 CY18 SOFTWARE SUSTAINMENT

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 $41.1 million.

What is the period of performance?

Start: 2018-01-01. End: 2018-12-31.

What is the justification for the sole-source award, and how is cost reasonableness ensured?

The justification for a sole-source award typically stems from unique capabilities or proprietary technology held by a single contractor. For this contract, the Air Force would need to demonstrate that Northrop Grumman is the only entity capable of providing the necessary software sustainment for the B-2. Cost reasonableness is usually ensured through detailed audits, negotiation of fee structures, and comparison with historical data or industry benchmarks, though the absence of competition inherently limits robust price discovery.

What are the risks associated with relying on a single contractor for critical software sustainment?

Relying on a single contractor for critical software sustainment poses several risks. These include potential vendor lock-in, reduced incentive for innovation or efficiency improvements, and vulnerability to price increases upon contract renewal. If the contractor experiences financial difficulties or operational issues, it could directly impact the B-2's readiness. Furthermore, a sole-source arrangement limits the government's leverage in negotiations.

How does this contract contribute to the overall effectiveness and readiness of the B-2 bomber program?

This contract is vital for the ongoing effectiveness and readiness of the B-2 bomber program by ensuring the software underpinning its complex systems remains up-to-date, secure, and functional. Software sustainment includes maintenance, updates, and potentially upgrades necessary to counter evolving threats and maintain operational capabilities. Without this dedicated support, the B-2's mission-critical functions could degrade, impacting its strategic value.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $41,141,448

Exercised Options: $41,141,448

Current Obligation: $41,141,448

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $118,377,164

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