DoD's $256M Northrop Grumman B-2 CLS Contract: Limited Competition Raises Concerns
Contract Overview
Contract Amount: $255,925,893 ($255.9M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2021-03-01
End Date: 2025-02-28
Contract Duration: 1,460 days
Daily Burn Rate: $175.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: B-2 CY 21-24 CONTRACTOR LOGISTICS SUPPORT (CLS)
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $255.9 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: B-2 CY 21-24 CONTRACTOR LOGISTICS SUPPORT (CLS) Key points: 1. Significant spending on contractor logistics support for the B-2 bomber fleet. 2. Sole-source nature of the contract limits competitive pricing and innovation. 3. High cost raises questions about value for money and potential overspending. 4. Focus on a critical defense asset, highlighting the importance of sustainment.
Value Assessment
Rating: questionable
The contract's value of $255.9M over four years for logistics support is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts or assess if the pricing reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition likely resulted in higher prices and limited opportunities for alternative solutions or cost savings.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure, potentially funding inefficiencies or above-market rates for B-2 bomber sustainment.
Public Impact
Ensures continued operational readiness of the B-2 bomber fleet. Supports critical national defense capabilities. Potential for taxpayer funds to be used inefficiently due to lack of competition. Reliance on a single contractor for essential support services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Sole-source award
- Potential for cost overruns
Positive Signals
- Ensures critical B-2 bomber sustainment
- Long-term contract provides stability
Sector Analysis
The defense sector often involves complex, high-value contracts for specialized equipment and support. Spending benchmarks for aircraft logistics support can vary widely based on aircraft type, age, and required services.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corp and does not mention any small business participation. This suggests a lack of subcontracting opportunities for small businesses in this specific award.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure the contractor is providing services at a reasonable cost and meeting performance requirements. Transparency in pricing and performance metrics is crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Sole-source award
- Potential for inflated pricing
- Limited oversight visibility due to sole-source nature
- Dependency on a single contractor
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 $255.9 million to NORTHROP GRUMMAN SYSTEMS CORP. B-2 CY 21-24 CONTRACTOR LOGISTICS SUPPORT (CLS)
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 $255.9 million.
What is the period of performance?
Start: 2021-03-01. End: 2025-02-28.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, for sustainment contracts, agencies should explore options for competition, such as breaking down the requirement or seeking alternative providers. Robust cost analysis and negotiation are essential to mitigate the risks associated with sole-source procurement and ensure taxpayer value.
What are the risks associated with relying on a single contractor for B-2 bomber logistics support?
Sole-source reliance creates significant risks, including potential price gouging, reduced incentive for innovation, and vulnerability if the contractor faces financial distress or operational issues. It also limits the government's ability to leverage competitive market forces for better terms and services, potentially impacting long-term sustainment costs and readiness.
How does this contract's value compare to similar logistics support contracts for other advanced aircraft?
Benchmarking this $256 million contract against similar contracts for advanced aircraft is challenging without detailed service scope and performance metrics. However, given the lack of competition, it is prudent to assume the price may be higher than if it were competitively awarded. A thorough cost analysis by the DoD is necessary.
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: $255,925,893
Exercised Options: $255,925,893
Current Obligation: $255,925,893
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: 2021-03-01
Current End Date: 2025-02-28
Potential End Date: 2025-02-28 00:00:00
Last Modified: 2024-07-03
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