DoD's $38.9M B-2 Software Sustainment contract awarded to Northrop Grumman without competition
Contract Overview
Contract Amount: $38,928,075 ($38.9M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2019-01-01
End Date: 2019-12-31
Contract Duration: 364 days
Daily Burn Rate: $106.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CY19 PERFORMANCE-BASED LOGISTICS (PBL) B-2 SOFTWARE SUSTAINMENT (SWS).
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $38.9 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: CY19 PERFORMANCE-BASED LOGISTICS (PBL) B-2 SOFTWARE SUSTAINMENT (SWS). Key points: 1. Significant spending on aircraft software sustainment. 2. Sole-source award raises concerns about price discovery. 3. Lack of competition may lead to higher costs. 4. Performance-based logistics contract aims for efficiency.
Value Assessment
Rating: questionable
The contract's value of $38.9M for software sustainment is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to similar sustainment contracts for complex aircraft systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially increases costs for taxpayers as there was no market pressure to achieve the best value.
Taxpayer Impact: The lack of competition on this $38.9M contract means taxpayers may not have received the best possible price for these critical software sustainment services.
Public Impact
Ensures continued operational readiness of the B-2 bomber fleet. Supports critical software updates and maintenance for advanced avionics. Potential for cost overruns due to sole-source nature. Impacts the long-term affordability of the B-2 program.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost inefficiency
Positive Signals
- Performance-based logistics approach
- Sustains critical aircraft capability
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing and maintenance. Spending on sustainment for aging, high-value platforms like the B-2 is common but requires careful oversight to ensure cost-effectiveness.
Small Business Impact
This 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 prime contracts of this nature.
Oversight & Accountability
The sole-source nature of this award warrants close oversight by the Department of Defense to ensure that the performance-based logistics contract delivers value and that costs are managed effectively throughout its duration.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for cost overruns due to CPFF structure.
- Limited transparency in price discovery.
- High value contract requires strong oversight.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.9 million to NORTHROP GRUMMAN SYSTEMS CORP. CY19 PERFORMANCE-BASED LOGISTICS (PBL) B-2 SOFTWARE SUSTAINMENT (SWS).
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 $38.9 million.
What is the period of performance?
Start: 2019-01-01. End: 2019-12-31.
What specific performance metrics are in place to ensure value for money in this sole-source contract?
The contract is performance-based, implying metrics are tied to outcomes like system availability or response times for software issues. However, without competition, the baseline for these metrics and the associated pricing are less transparent. Further review of the contract's specific PWS and KPIs would be needed to detail these metrics and assess their adequacy in driving value.
What is the justification for not competing this software sustainment contract, given its significant value?
The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent needs where competition is not feasible. For this B-2 software sustainment, it might stem from the highly specialized nature of the software and the deep integration with the aircraft's systems, potentially limiting viable alternative providers.
How does the cost-plus-fixed-fee structure impact the government's risk and the contractor's incentive for efficiency?
A Cost Plus Fixed Fee (CPFF) contract covers allowable costs plus a fixed fee. While the fee is fixed, the contractor has less incentive to control costs as they are reimbursed for them. This structure shifts cost risk more towards the government, especially if cost overruns occur, making robust oversight crucial.
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: $38,928,075
Exercised Options: $38,928,075
Current Obligation: $38,928,075
Subaward Activity
Number of Subawards: 79
Total Subaward Amount: $163,159,625
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: 2019-01-01
Current End Date: 2019-12-31
Potential End Date: 2019-12-31 00:00:00
Last Modified: 2024-06-03
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