Air Force Awards $73M Logistics Contract to Northrop Grumman for Navigation Systems
Contract Overview
Contract Amount: $73,118,469 ($73.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2017-08-01
End Date: 2022-04-30
Contract Duration: 1,733 days
Daily Burn Rate: $42.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF AIR FORCE QUICK REACTION CAPABILITY CONTRACTOR LOGISTICS SUPPORT AND ENGINEERING SERVICES
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $73.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF AIR FORCE QUICK REACTION CAPABILITY CONTRACTOR LOGISTICS SUPPORT AND ENGINEERING SERVICES Key points: 1. Significant contract value of $73.1 million awarded to a single large business. 2. Sole-source award raises questions about competition and potential price discovery. 3. Contract duration of 1733 days (approx. 4.7 years) indicates long-term support needs. 4. Focus on navigation and guidance systems highlights critical defense capabilities.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to assess if the $73.1 million price represents fair value compared to market alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially increases costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on this large contract may result in higher costs for taxpayers than if multiple vendors had vied for the work.
Public Impact
Ensures continued operational readiness for critical Air Force navigation and guidance systems. Supports advanced technological capabilities essential for national defense. Potential for increased costs due to sole-source nature impacts taxpayer funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of small business participation
Positive Signals
- Supports critical defense capabilities
- Long-term contract ensures stability
Sector Analysis
This contract falls within the Defense sector, specifically supporting navigation and guidance systems. Spending benchmarks for similar logistics and engineering services in defense can vary widely, but large sole-source contracts often warrant closer scrutiny due to potential cost inefficiencies.
Small Business Impact
The data indicates no small business participation in this contract (sb: false). This is a concern as it misses an opportunity to support small businesses and leverage their innovative capabilities within the defense supply chain.
Oversight & Accountability
The contract was awarded by the Department of Defense through the Defense Contract Management Agency. Oversight is crucial, especially for sole-source, cost-plus contracts, to ensure funds are used efficiently and effectively.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- No small business participation noted.
- Lack of transparency regarding justification for sole-source award.
Tags
search-detection-navigation-guidance-aer, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF AIR FORCE QUICK REACTION CAPABILITY CONTRACTOR LOGISTICS SUPPORT AND ENGINEERING SERVICES
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 $73.1 million.
What is the period of performance?
Start: 2017-08-01. End: 2022-04-30.
What was the justification for the sole-source award, and were alternatives explored?
The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically cite reasons such as unique capabilities, urgent needs, or lack of viable alternatives. Without this justification, it's difficult to assess if the government received the best possible value and if taxpayer funds were used appropriately.
How is the cost-plus-fixed-fee structure being monitored to prevent cost overruns?
Cost-plus-fixed-fee contracts require robust oversight to manage potential cost escalations. The Defense Contract Management Agency must implement stringent monitoring of Northrop Grumman's expenditures, performance metrics, and adherence to the fixed fee. Regular audits and performance reviews are essential to ensure the contractor remains within budget and delivers the required services effectively.
What is the long-term strategy for ensuring competitive sourcing of these critical logistics and engineering services?
Given the sole-source nature of this award, a forward-looking strategy is needed to foster future competition. This could involve market research to identify potential new entrants, breaking down future requirements into smaller, more accessible contracts, or incentivizing innovation among potential bidders. This ensures long-term cost-effectiveness and access to a broader range of capabilities.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA852317R0008
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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: $94,380,536
Exercised Options: $73,160,886
Current Obligation: $73,118,469
Subaward Activity
Number of Subawards: 1873
Total Subaward Amount: $197,639,497
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-08-01
Current End Date: 2022-04-30
Potential End Date: 2022-04-30 00:00:00
Last Modified: 2025-05-14
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