DoD's $33.4M contract for C-130J replenishment spares awarded to Northrop Grumman shows fair value

Contract Overview

Contract Amount: $33,412,727 ($33.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2008-09-26

End Date: 2011-12-31

Contract Duration: 1,191 days

Daily Burn Rate: $28.1K/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: AN/APN 241 GROUP B SETS AND VARIOUS APN 241 C-130J REPLENISHMENT SPARES

Place of Performance

Location: NORWALK, FAIRFIELD County, CONNECTICUT, 06855

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $33.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AN/APN 241 GROUP B SETS AND VARIOUS APN 241 C-130J REPLENISHMENT SPARES Key points: 1. The contract value of $33.4 million for C-130J replenishment spares appears reasonable given the specialized nature of military aircraft components. 2. Competition dynamics were limited, with the award following an exclusion of sources, suggesting potential for higher costs. 3. Risk indicators are moderate, primarily related to the long-term availability and support of specialized aircraft parts. 4. Performance context is tied to maintaining the operational readiness of the C-130J fleet, a critical asset for the Air Force. 5. Sector positioning is within the defense aerospace manufacturing segment, focusing on sustainment and logistics support. 6. The contract's fixed-price nature provides cost certainty for the government, though it may limit contractor incentive for further cost reductions.

Value Assessment

Rating: good

The contract value of $33.4 million for AN/APN 241 group sets and C-130J replenishment spares is benchmarked against similar sustainment contracts for military aircraft. While specific per-unit cost data is not publicly available, the overall value appears to be within a reasonable range for specialized aviation components. The firm fixed-price contract structure suggests that the government has secured a defined cost for these parts, mitigating the risk of cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the initial solicitation may have been open, certain sources were excluded, leading to a more limited competitive pool. The specific reasons for exclusion are not detailed, but this approach can sometimes result in fewer bids and potentially less aggressive pricing compared to unrestricted full and open competition.

Taxpayer Impact: The limited competition may mean that taxpayers did not benefit from the most aggressive pricing achievable through a broader bidding process. However, the exclusion of sources might have been necessary to ensure specialized capabilities or compliance with specific military requirements.

Public Impact

The primary beneficiaries are the U.S. Air Force and its C-130J Super Hercules aircraft fleet, ensuring operational readiness. Services delivered include the provision of essential replenishment spares for the AN/APN 241 system and other C-130J components. The geographic impact is national, supporting Air Force operations across various bases and deployment locations. Workforce implications include supporting jobs in aerospace manufacturing and logistics within Northrop Grumman and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs due to limited competition after source exclusion.
Long-term sustainment and obsolescence management of specialized aircraft parts.
Dependence on a single contractor for critical replenishment spares.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a major defense contractor with established experience in aircraft sustainment.
Focus on maintaining the operational readiness of a key military transport aircraft.

Sector Analysis

This contract falls within the defense aerospace manufacturing sector, specifically focusing on the sustainment and logistics of military aircraft. The market for such specialized parts is often characterized by long production cycles, high barriers to entry due to technical expertise and certifications, and a limited customer base (primarily government entities). Comparable spending benchmarks would involve other sustainment contracts for major military platforms, where costs are driven by complexity, volume, and the criticality of the components.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Northrop Grumman Systems Corporation is a large business. There is no explicit information regarding subcontracting plans for small businesses within this award, which could limit opportunities for the small business ecosystem in this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified parts. Transparency is generally maintained through contract award databases, though detailed performance metrics and cost breakdowns may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

C-130J Super Hercules Sustainment Programs
DoD Aircraft Parts Procurement
Aerospace Replenishment Spares
Defense Logistics Agency (DLA) Contracts
Military Aircraft Component Manufacturing

Risk Flags

Limited competition due to source exclusion.
Potential for long-term sustainment challenges with specialized parts.
Dependence on a single contractor for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AN/APN 241 GROUP B SETS AND VARIOUS APN 241 C-130J REPLENISHMENT SPARES

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $33.4 million.

What is the period of performance?

Start: 2008-09-26. End: 2011-12-31.

What is the historical spending trend for C-130J replenishment spares with Northrop Grumman?

Analyzing historical spending for C-130J replenishment spares with Northrop Grumman requires access to detailed contract databases beyond the provided summary. However, the current award of $33.4 million for a period ending in late 2011 suggests a pattern of ongoing support for the C-130J fleet. Typically, sustainment contracts for major military platforms involve recurring procurements over the asset's lifecycle. Factors influencing spending trends include fleet size, operational tempo, aging of aircraft components, and the introduction of new technologies or upgrades. Without specific historical data points, it's difficult to ascertain if this $33.4 million represents an increase, decrease, or stable level of spending compared to previous periods or similar contracts.

How does the pricing of these AN/APN 241 spares compare to commercial aviation equivalents?

Direct comparison of pricing for military-specific spares like the AN/APN 241 group sets to commercial aviation equivalents is challenging due to fundamental differences in market dynamics, regulatory requirements, and production volumes. Military components often involve higher development costs, stringent testing and certification processes, and are produced in smaller batches, leading to higher per-unit costs. Commercial aviation parts benefit from larger production runs and a more competitive aftermarket. While the $33.4 million value seems substantial, it reflects the specialized nature and lower volume typical of defense procurement. Benchmarking against similar military aircraft parts would be more appropriate than commercial equivalents.

What are the key performance indicators (KPIs) for this contract, and how is Northrop Grumman's performance being measured?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for military aircraft replenishment spares contracts, typical KPIs often include on-time delivery rates, defect rates (quality of delivered parts), fulfillment rates (ability to supply requested parts), and adherence to technical specifications. Northrop Grumman's performance would likely be measured against these metrics by the Department of the Air Force program office. Contractual clauses would stipulate remedies or incentives tied to meeting or failing to meet these performance standards, ensuring the operational readiness of the C-130J fleet is maintained.

What is the risk associated with the 'exclusion of sources' in the competition process?

The 'exclusion of sources' in the competition process carries several risks. Primarily, it limits the number of potential bidders, which can reduce competitive pressure and potentially lead to higher prices for the government. It may also restrict the government's access to innovative solutions or alternative suppliers that were not included in the narrowed pool. Furthermore, if the exclusion criteria are not clearly justified or transparent, it could raise concerns about fairness and potentially lead to protests. While sometimes necessary for specialized requirements, this method requires careful justification to ensure the government is still achieving best value.

What is the expected lifespan of the AN/APN 241 system, and how does this contract support its sustainment?

The expected lifespan of the AN/APN 241 system, and by extension the need for its replenishment spares, is tied to the operational life of the C-130J aircraft fleet. The C-130J is a modern variant with an expected service life extending well into the future, likely several decades. This contract, awarded in 2008 and ending in 2011, represents a specific procurement window for essential spares during that period. Sustainment contracts like this are crucial for ensuring that aging components can be replaced, maintaining the system's functionality and reliability throughout the aircraft's extended service life, thereby supporting overall fleet readiness.

Are there any known issues or performance concerns with the AN/APN 241 system on the C-130J?

Information regarding specific known issues or performance concerns with the AN/APN 241 system on the C-130J is not publicly available through this contract data alone. Such details are typically found in operational readiness reports, maintenance logs, or specific program reviews conducted by the Department of the Air Force. The procurement of replenishment spares suggests that the system is operational and requires ongoing support. If significant issues were prevalent, it might manifest as higher-than-expected demand for spares, increased defect rates, or urgent modification requirements, none of which are indicated here.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: Titan II Inc. (UEI: 016435559)

Address: 10 NORDEN PL, NORWALK, CT, 04

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $33,412,727

Exercised Options: $33,412,727

Current Obligation: $33,412,727

Contract Characteristics

Cost or Pricing Data: NO

Timeline