DoD's $42.6M Northrop Grumman Contract for Sustainment Support Services Lacks Competition

Contract Overview

Contract Amount: $42,624,673 ($42.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2008-09-30

Contract Duration: 365 days

Daily Burn Rate: $116.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE

Sector: Other

Official Description: SUSTAINMENT SUPPORT SERVICES, SPARES AND SUPPLY

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $42.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: SUSTAINMENT SUPPORT SERVICES, SPARES AND SUPPLY Key points: 1. Significant contract value of $42.6 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced value. 3. The contract is for engineering services, a sector often subject to competitive bidding. 4. Sole-source award limits taxpayer benefit and innovation opportunities.

Value Assessment

Rating: questionable

The contract type is Cost Plus Incentive, which can lead to cost overruns if not managed tightly. Without competitive benchmarks, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method bypasses competitive price discovery, potentially leading to higher costs for the government.

Taxpayer Impact: The absence of competition means taxpayers may be paying more than necessary for these sustainment support services.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. Limited opportunities for small businesses to participate in this significant contract. Potential for reduced innovation and efficiency without market-driven incentives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Sole-Source Award
Cost-Plus Contract Type

Positive Signals

Specific sustainment support services provided.

Sector Analysis

This contract falls under Engineering Services (NAICS 541330). Spending in this sector can vary widely, but competitive procurement is standard practice to ensure value.

Small Business Impact

The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation in this sole-source award.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is delivering services efficiently and at a fair price, despite the lack of competition.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Cost-plus contract type carries inherent cost risk.
Lack of transparency in price justification.
Potential for reduced value for taxpayer dollars.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. SUSTAINMENT SUPPORT SERVICES, SPARES AND SUPPLY

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 $42.6 million.

What is the period of performance?

Start: 2007-10-01. End: 2008-09-30.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available sources. Without this information, it's difficult to assess if competitive procurement was truly infeasible or if the government missed an opportunity to leverage market forces for better pricing and innovation.

How does the cost-plus incentive fee structure impact the government's financial risk in this contract?

Cost-plus incentive fee contracts share cost risks and rewards between the government and the contractor. While intended to incentivize efficiency, it can still expose the government to higher-than-expected costs if the contractor's performance targets are not met or if cost overruns occur. Robust oversight is crucial.

What specific sustainment support services are being provided, and how critical are they to the Air Force's operations?

Understanding the specific services and their criticality is essential for evaluating the necessity of the contract and the potential impact of its cost and performance. If these are mission-critical, the lack of competition might be more justifiable, but it still necessitates stringent cost controls and performance monitoring.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 17066 GOLDENTOP RD., SAN DIEGO, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $45,902,486

Exercised Options: $42,624,673

Current Obligation: $42,624,673

Contract Characteristics

Cost or Pricing Data: YES

Timeline