DoD's T-9 Trainer Modification Program awarded to Northrop Grumman for over $33.5M, with a 5-year performance period
Contract Overview
Contract Amount: $33,552,524 ($33.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-10-26
End Date: 2023-03-31
Contract Duration: 1,982 days
Daily Burn Rate: $16.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: IGF::CT::IGF T-9 TRAINER MODIFICATION PROGRAM (TMP)
Place of Performance
Location: ROY, WEBER County, UTAH, 84067
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $33.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF T-9 TRAINER MODIFICATION PROGRAM (TMP) Key points: 1. The contract's fixed-price incentive structure aims to balance cost control with performance incentives. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The contract duration of nearly 2000 days indicates a significant, long-term project. 4. Performance is managed by the Defense Contract Management Agency, a key oversight body. 5. The engineering services sector is characterized by high technical expertise and specialized requirements. 6. The contract's value places it within a substantial spending category for defense modernization.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific details on the modifications. However, the fixed-price incentive (FPI) contract type suggests an effort to control costs while incentivizing performance. The total award of over $33.5 million over approximately five years indicates a significant investment. Further analysis would require comparing the scope of work and unit costs to similar trainer modification programs or engineering service contracts within the DoD.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically suggests a robust bidding environment, which can lead to better pricing and value for the government. The number of bidders is not specified, but the 'full and open' designation implies that the government actively sought multiple proposals.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to more efficient use of public funds.
Public Impact
The primary beneficiaries are the U.S. Air Force personnel who will utilize the modified T-9 trainers. The services delivered include engineering, modification, and potentially testing of trainer aircraft. The geographic impact is likely concentrated around the contractor's facilities and the operational bases for the T-9 trainers. Workforce implications include specialized engineering and technical roles required for the modification and integration efforts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics makes it difficult to assess the effectiveness of the incentive structure.
- The long duration could introduce risks related to technological obsolescence or changing operational requirements.
- Details on the specific modifications are not readily available, hindering a precise understanding of the value proposition.
Positive Signals
- The use of a fixed-price incentive contract signals an attempt to manage costs while ensuring performance.
- Awarding under full and open competition suggests a commitment to achieving competitive pricing.
- The contract is managed by the Defense Contract Management Agency, indicating established oversight processes.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the aerospace and defense industry. This sector is characterized by complex technical requirements, long development cycles, and significant R&D investment. The market size for defense engineering services is substantial, driven by the need for continuous modernization and sustainment of military platforms. Comparable spending benchmarks would involve other major modification and upgrade programs for military aircraft or training systems.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The prime contractor, Northrop Grumman, is a large aerospace and defense company, and its subcontracting practices would determine any indirect impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions, quality standards, and delivery schedules. The fixed-price incentive structure itself includes accountability measures tied to performance and cost targets. Transparency would depend on the public availability of contract performance reports and any associated Inspector General audits.
Related Government Programs
- T-9 Trainer Aircraft Program
- DoD Aircraft Modification Contracts
- Defense Engineering Services
- Fixed-Price Incentive Contracts
Risk Flags
- Long contract duration may increase risk of obsolescence or changing requirements.
- Fixed-price incentive contracts require careful monitoring to ensure cost targets are met.
- Specific details of modifications are not publicly available, limiting value assessment.
Tags
defense, department-of-defense, northrop-grumman-systems-corporation, engineering-services, aircraft-modification, fixed-price-incentive, full-and-open-competition, delivery-order, utah, defense-contract-management-agency, trainer-aircraft
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::CT::IGF T-9 TRAINER MODIFICATION PROGRAM (TMP)
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $33.6 million.
What is the period of performance?
Start: 2017-10-26. End: 2023-03-31.
What is the specific nature of the T-9 Trainer Modification Program, and what are the key objectives?
The T-9 Trainer Modification Program (TMP) aims to upgrade the existing T-9 trainer aircraft operated by the U.S. Air Force. While specific details of the modifications are not publicly detailed in the provided data, such programs typically involve enhancing avionics, improving safety features, updating training capabilities, or extending the operational lifespan of the aircraft. The key objectives are generally to ensure the trainer fleet remains relevant, effective, and safe for pilot training in line with evolving military requirements and technological advancements. The contract's fixed-price incentive structure suggests a focus on achieving these upgrades within defined cost and performance parameters.
How does the fixed-price incentive (FPI) contract type compare to other contract types in terms of value for money for this type of service?
Fixed-Price Incentive (FPI) contracts, like the one awarded to Northrop Grumman, are designed to share the risks and rewards between the government and the contractor. They establish an initial target cost, target profit, and a price ceiling. If the final cost is below the target, both parties share in the savings. If it exceeds the target but stays below the ceiling, the contractor's profit is reduced. If the cost exceeds the ceiling, the contractor absorbs the loss. For complex engineering services like aircraft modifications, FPI can offer better value than Firm-Fixed-Price (FFP) if there's uncertainty in cost estimation, as it incentivizes cost control while allowing for adjustments. It's generally considered superior to Cost-Plus contracts for value when performance can be clearly defined and measured, as it avoids open-ended cost escalation.
What are the potential risks associated with the long duration (1982 days) of this contract?
A contract duration of 1982 days (approximately 5.4 years) for aircraft modifications presents several potential risks. Firstly, technological obsolescence is a significant concern; the technology landscape can change rapidly over five years, potentially making the modifications outdated by the time they are completed or diminishing their long-term value. Secondly, operational requirements for training may evolve, necessitating further modifications or rendering the current upgrade scope less relevant. Thirdly, contractor performance and stability over such an extended period can be a risk; key personnel might leave, or the company's financial health could fluctuate. Lastly, managing scope creep and ensuring consistent quality control over a prolonged period requires robust oversight and communication.
What does the 'full and open competition' designation imply about the contractor selection process and potential savings?
The 'full and open competition' designation signifies that the Department of Defense actively sought proposals from all responsible sources capable of meeting the contract requirements. This process typically involves publicizing the requirement, allowing any interested and qualified company to submit a bid. This broad competition is generally expected to foster a more robust bidding environment, leading to a wider range of proposed solutions and potentially more competitive pricing. For taxpayers, this means the government likely received the best possible value by leveraging market forces to drive down costs and encourage innovation, rather than being limited to a pre-selected or sole-source provider.
How does Northrop Grumman's track record in similar defense modification contracts influence the assessment of this award?
Northrop Grumman is a major defense contractor with extensive experience in complex aerospace programs, including aircraft modifications and system integration. Their track record in delivering large-scale defense projects suggests a high level of technical capability and program management expertise. While specific performance data for this particular T-9 TMP contract is not detailed here, the company's history implies a lower risk of technical failure or significant execution issues compared to a less experienced contractor. However, past performance on other contracts, including any cost overruns or schedule delays, would be crucial for a comprehensive risk assessment. Government agencies often review past performance evaluations when making award decisions.
Are there any indications of potential cost overruns or budget issues based on the contract data provided?
The provided data does not explicitly indicate current cost overruns or budget issues for this contract. The award amount of $33,552,523.99 represents the total value obligated at the time of the data extraction. The contract type is Fixed Price Incentive (FPI), which includes mechanisms for cost sharing and a price ceiling, suggesting an effort to manage costs. However, FPI contracts can still experience cost growth if the final costs exceed the target costs, up to the ceiling. Without access to performance reports, earned value management data, or historical spending trends beyond the initial award, it's impossible to definitively assess the risk of future cost overruns.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2340 DULLES CORNER BLVD, 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: $33,722,884
Exercised Options: $33,722,884
Current Obligation: $33,552,524
Actual Outlays: $456,675
Subaward Activity
Number of Subawards: 25
Total Subaward Amount: $73,287,711
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA821415D0001
IDV Type: IDC
Timeline
Start Date: 2017-10-26
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 00:00:00
Last Modified: 2025-10-03
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