DoD's $16.9M Landing Gear Contract with Northrop Grumman: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $16,924,568 ($16.9M)
Contractor: Northrop Grumman Technical Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2008-03-10
End Date: 2014-01-15
Contract Duration: 2,137 days
Daily Burn Rate: $7.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PISTON,LANDING GEAR
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $16.9 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: PISTON,LANDING GEAR Key points: 1. The contract value of $16.9M for landing gear components is significant, requiring careful scrutiny. 2. Northrop Grumman's role as a major defense contractor highlights the competitive landscape. 3. Potential risks include long-term sustainment costs and the impact of sole-source exclusions. 4. The 'Other Aircraft Parts' sector often sees specialized, high-value contracts.
Value Assessment
Rating: fair
The $16.9M contract value for landing gear components appears substantial. Benchmarking against similar, complex aircraft parts contracts is crucial to assess if this price reflects fair market value, especially given the long performance period.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition scenario. This method may impact price discovery, potentially leading to higher costs than a truly open competition.
Taxpayer Impact: The limited competition raises concerns about taxpayer value. Ensuring the pricing is justified and competitive within the specialized aerospace market is essential to protect public funds.
Public Impact
Taxpayers may be paying a premium due to the limited competitive bidding process. The long contract duration (2008-2014) suggests a need for ongoing oversight of performance and costs. Dependence on a single contractor for critical aircraft parts can pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may inflate costs.
- Lack of small business participation.
- Long contract duration increases risk exposure.
Positive Signals
- Awarded to a reputable defense contractor.
- Definitive contract provides clear terms.
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a specialized area within aerospace. Spending benchmarks in this niche are often driven by unique technical requirements and limited supplier bases.
Small Business Impact
The data indicates that small businesses were not involved in this contract (sb: false). This is a common trend in large, specialized defense contracts where prime contractors like Northrop Grumman often handle the majority of the work.
Oversight & Accountability
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause warrants further investigation into the justification for excluding other potential bidders. Robust oversight is needed to ensure the contractor meets all performance and cost requirements.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for cost overruns due to limited competition.
- Lack of small business participation.
- Long contract duration increases risk.
- Dependency on a single supplier.
- Need for detailed justification for source exclusion.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.9 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. PISTON,LANDING GEAR
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN TECHNICAL SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $16.9 million.
What is the period of performance?
Start: 2008-03-10. End: 2014-01-15.
What was the specific justification for excluding sources in this 'full and open competition' scenario, and how did it impact the final price?
The justification for excluding sources is critical. Typically, such exclusions are based on factors like proprietary technology, unique capabilities, or national security concerns. Understanding this rationale is key to determining if the limited competition was unavoidable and if the resulting price reflects fair value, or if it represents a missed opportunity for greater cost savings through broader competition.
How does the $16.9M contract value compare to industry benchmarks for similar landing gear components, considering the long performance period?
A comprehensive benchmark analysis is needed. Comparing the per-unit cost or total contract value against similar components procured by other agencies or through different contract types (e.g., fixed-price incentive) would reveal potential overpricing. The extended duration (2008-2014) also necessitates evaluating the escalation clauses and their impact on the final cost.
What are the long-term sustainment and obsolescence risks associated with this specific landing gear contract and its limited supplier base?
The long-term risks are significant. A limited supplier base, especially for critical components like landing gear, can lead to future sustainment challenges, potential obsolescence issues, and increased costs for repairs or replacements. The DoD needs a strategy to mitigate these risks, possibly through second-sourcing strategies or long-term agreements with the incumbent.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $16,924,568
Exercised Options: $16,924,568
Current Obligation: $16,924,568
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-03-10
Current End Date: 2014-01-15
Potential End Date: 2014-01-15 00:00:00
Last Modified: 2021-07-29
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