Air Force awards $18.2M contract for B-2 bomber component upgrade, a sole-source acquisition

Contract Overview

Contract Amount: $18,241,692 ($18.2M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2027-07-23

Contract Duration: 661 days

Daily Burn Rate: $27.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IN ACCORDANCE WITH FLEXIBLE ACQUISITION AND SUSTAINMENT TEAM (FAST III) CONTRACT, FA8616-24-D-B001, THIS REQUIREMENT IS TO DEVELOP AN LRU THAT REPLACES THE CURRENT B-2 ROTARY LAUNCHER ASSEMBLY (RLA) TRANSFORMER RECTIFIER UNIT (TRU).

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.2 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IN ACCORDANCE WITH FLEXIBLE ACQUISITION AND SUSTAINMENT TEAM (FAST III) CONTRACT, FA8616-24-D-B001, THIS REQUIREMENT IS TO DEVELOP AN LRU THAT REPLACES THE CURRENT B-2 ROTARY LAUNCHER ASSEMBLY (RLA) TRANSFORMER RECTIFIER UNIT (TRU). Key points: 1. The contract focuses on developing a replacement for a critical B-2 bomber component, the Rotary Launcher Assembly (RLA) Transformer Rectifier Unit (TRU). 2. This acquisition is a sole-source award, indicating a lack of competition for this specific upgrade. 3. The contract duration is approximately 661 days, with an estimated completion date in July 2027. 4. The award is made under the Flexible Acquisition and Sustainment Team (FAST III) contract vehicle. 5. The primary contractor, Northrop Grumman Systems Corp, is a major defense manufacturer with extensive experience. 6. The contract type is Cost Plus Fixed Fee (CPFF), which can present cost control challenges. 7. The geographic location for performance is California.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The Cost Plus Fixed Fee (CPFF) contract type means the final cost is not fixed upfront and depends on actual costs incurred plus a fixed fee. While this can be appropriate for development efforts where costs are uncertain, it requires robust oversight to ensure cost efficiency. Without comparable sole-source awards for similar component upgrades, it's difficult to definitively assess if the $18.2 million price tag represents good value for money. The absence of competition inherently limits price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corp, was solicited. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This approach is often justified for specialized defense systems where interoperability or existing sustainment infrastructure dictates a single source.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to reduce prices. The government must rely on strong negotiation and oversight to ensure a fair price is paid.

Public Impact

The primary beneficiaries are the United States Air Force and the B-2 bomber fleet, ensuring continued operational readiness. The contract will deliver a modernized and potentially more reliable Transformer Rectifier Unit (TRU) for the Rotary Launcher Assembly (RLA). The geographic impact is primarily within California, where the contractor is located and likely where some of the development and testing will occur. The workforce implications include employment for engineers, technicians, and support staff at Northrop Grumman, particularly in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs effectively.
Lack of competition may reduce incentives for innovation or efficiency compared to a competitive bid.
Reliance on a single contractor for a critical component could create long-term dependency.
The specific technical requirements and the justification for sole-source need thorough review to ensure necessity.

Positive Signals

Awarded to an established defense contractor with a track record in aerospace manufacturing.
Addresses a critical component upgrade for a strategic bomber fleet, enhancing readiness.
Utilizes an existing contract vehicle (FAST III) which may streamline the acquisition process.
The contract aims to replace an aging component, potentially improving reliability and reducing future maintenance costs.
The fixed fee component of the CPFF contract provides some cost predictability for the contractor's profit.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for aircraft components, especially for strategic assets like the B-2 bomber, often involve specialized manufacturing and stringent quality control. The market for such components is typically dominated by a few large, established prime contractors and their specialized subcontractors. Spending in this area is driven by national security requirements, modernization programs, and the need for sustainment of existing fleets. Comparable spending benchmarks are difficult to establish without detailed knowledge of the specific component's complexity and the market for its replacement.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by the 'sb': false field. Given the sole-source nature and the specialized requirements for upgrading a B-2 bomber component, it is unlikely that small businesses would be directly solicited as the prime contractor. However, Northrop Grumman, as the prime, may engage small businesses as subcontractors. The extent of small business subcontracting would depend on Northrop Grumman's internal policies and the specific needs of the project, which are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force, potentially through its contracting officer representatives (CORs) and program management offices. Given the CPFF structure, rigorous oversight of Northrop Grumman's incurred costs and progress towards the fixed fee will be crucial. The Defense Contract Audit Agency (DCAA) may also be involved in auditing costs. Transparency is generally maintained through contract reporting mechanisms, but specific details of cost breakdowns and performance metrics may be considered sensitive.

Related Government Programs

B-2 Spirit Bomber Sustainment
Aircraft Component Modernization Programs
Defense Logistics Agency (DLA) Aviation Support
Air Force Materiel Command (AFMC) Contracts
FAST III Contract Vehicle

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding
Critical component for strategic asset

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.2 million to NORTHROP GRUMMAN SYSTEMS CORP. IN ACCORDANCE WITH FLEXIBLE ACQUISITION AND SUSTAINMENT TEAM (FAST III) CONTRACT, FA8616-24-D-B001, THIS REQUIREMENT IS TO DEVELOP AN LRU THAT REPLACES THE CURRENT B-2 ROTARY LAUNCHER ASSEMBLY (RLA) TRANSFORMER RECTIFIER UNIT (TRU).

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 $18.2 million.

What is the period of performance?

Start: 2025-09-30. End: 2027-07-23.

What is the track record of Northrop Grumman Systems Corp with the B-2 bomber program and similar component upgrades?

Northrop Grumman Systems Corp is the prime contractor for the B-2 Spirit bomber program, responsible for its sustainment and modernization. This deep involvement provides them with intimate knowledge of the aircraft's systems, including the Rotary Launcher Assembly (RLA). They have a long history of developing and manufacturing complex aerospace components for various military platforms. While specific details on their track record for RLA Transformer Rectifier Unit (TRU) upgrades are not publicly itemized, their established role as the B-2 prime contractor suggests significant relevant experience and capability. Their history with the platform implies a strong understanding of the technical challenges and requirements associated with maintaining and upgrading its critical systems.

How does the $18.2 million cost compare to similar sole-source component upgrade contracts for strategic aircraft?

Directly comparing the $18.2 million cost to similar sole-source component upgrade contracts for strategic aircraft is challenging without access to proprietary contract data and specific technical details. Sole-source awards inherently lack a competitive benchmark, making value assessment difficult. The cost is influenced by factors such as the complexity of the component, the required research and development, the specific materials, testing protocols, and the contractor's overhead and profit margins. For critical, low-volume components on unique platforms like the B-2, costs can be significantly higher than for more common parts. The Cost Plus Fixed Fee (CPFF) structure also means the final cost could deviate from the initial estimate. A thorough analysis would require benchmarking against other sole-source development efforts for specialized aerospace systems.

What are the primary risks associated with this sole-source, CPFF contract for the Air Force?

The primary risks associated with this sole-source, Cost Plus Fixed Fee (CPFF) contract are cost overruns and a lack of competitive pressure. Since the contractor is reimbursed for actual costs plus a fixed fee, there is a reduced incentive to control expenses compared to a fixed-price contract. The sole-source nature means the Air Force did not benefit from competitive bidding, potentially leading to a higher initial price. Furthermore, reliance on a single contractor for a critical component could create long-term dependency and limit future sourcing options. Effective risk mitigation requires robust government oversight of incurred costs, detailed performance monitoring, and strong contract management to ensure the contractor remains focused on delivering the required upgrade efficiently.

What is the expected impact of this upgrade on the B-2 bomber's operational effectiveness and sustainment?

The upgrade of the Rotary Launcher Assembly (RLA) Transformer Rectifier Unit (TRU) is expected to enhance the B-2 bomber's operational effectiveness and sustainment by replacing an aging component. A modernized TRU is likely to offer improved reliability, potentially reducing unscheduled maintenance events and associated downtime. This can lead to increased aircraft availability for missions. Furthermore, newer components may incorporate improved performance characteristics or be designed with greater efficiency, contributing to the overall longevity and operational readiness of the B-2 fleet. The upgrade addresses obsolescence issues, ensuring that critical systems remain functional and supportable for the foreseeable future.

How does the FAST III contract vehicle influence the acquisition process and potential costs for this requirement?

The use of the Flexible Acquisition and Sustainment Team (FAST III) contract vehicle suggests that this requirement was likely fulfilled through an existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract. IDIQ vehicles are designed to streamline the acquisition process for a broad range of services and supplies, allowing agencies to issue task orders or delivery orders more rapidly than through traditional full-and-open competition. This can reduce administrative burden and lead times. For this specific sole-source award, FAST III likely provided a pre-negotiated framework for contract terms and pricing structures, potentially offering some efficiencies. However, the ultimate cost is still heavily dependent on the specific negotiations for this delivery order and the inherent nature of the sole-source requirement.

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 3520 E AVENUE M, PALMDALE, CA, 93550

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,241,692

Exercised Options: $18,241,692

Current Obligation: $18,241,692

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA861624DB001

IDV Type: IDC

Timeline