DoD awards Northrop Grumman $2.2M for aircraft parts and engineering services, citing sole-source justification

Contract Overview

Contract Amount: $2,239,789 ($2.2M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-06-17

End Date: 2026-06-03

Contract Duration: 716 days

Daily Burn Rate: $3.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: REPAIRS, SPARES REPAIRS, SPARES-- AND ENGINEERING SERVICES OF VARIOUS PLATFORMS AND ENGINEERING SERVICES OF VARIOUS PLATFORMS AND SYSTEMS.

Place of Performance

Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $2.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: REPAIRS, SPARES REPAIRS, SPARES-- AND ENGINEERING SERVICES OF VARIOUS PLATFORMS AND ENGINEERING SERVICES OF VARIOUS PLATFORMS AND SYSTEMS. Key points: 1. Contract focuses on essential repairs and engineering support for diverse platforms. 2. Sole-source award raises questions about potential cost efficiencies and market alternatives. 3. Limited competition may impact price discovery and taxpayer value. 4. Contract duration of nearly two years suggests ongoing support needs. 5. Northrop Grumman's established role in defense manufacturing positions them for this specialized work. 6. Geographic location in Illinois noted for contract performance.

Value Assessment

Rating: questionable

The contract value of $2.2 million is relatively modest for defense systems engineering. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The sole-source nature necessitates a closer examination of cost reasonableness and whether the awarded price reflects fair value for the specialized engineering services and parts required. The absence of competition limits the ability to assess if alternative, potentially more cost-effective solutions were overlooked.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Northrop Grumman was the only vendor considered. The justification for this approach is not detailed in the provided data, but sole-source awards typically occur when only one vendor possesses the necessary specialized capabilities, proprietary technology, or when urgency precludes a competitive process. The lack of multiple bidders means there was no direct price competition, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding environment. This award highlights the importance of rigorous justification for sole-source procurements to ensure funds are used efficiently.

Public Impact

The Department of Defense benefits from continued engineering support and availability of critical parts for its various platforms. This contract ensures the operational readiness and maintenance of defense systems. The primary beneficiaries are the military branches relying on the platforms supported by these services. Workforce implications are likely within Northrop Grumman's engineering and manufacturing divisions, primarily in Illinois.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award limits transparency in cost determination.
Potential for vendor lock-in due to specialized nature of services.

Positive Signals

Northrop Grumman is a known entity with established capabilities in defense systems.
Contract addresses essential repair and engineering needs, crucial for operational readiness.
Fixed-price contract type can provide cost certainty if scope is well-defined.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing. The market for such specialized engineering services and parts is often dominated by a few large, established defense contractors due to high barriers to entry, including technological expertise, security clearances, and existing relationships with government agencies. Comparable spending benchmarks are difficult to establish without more specific details on the platforms and systems being serviced, but this contract appears to be for sustainment and support rather than new platform development.

Small Business Impact

The data indicates this contract was not competed and there is no indication of small business set-asides or subcontracting plans. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Northrop Grumman voluntarily includes them in their supply chain. There is no explicit mechanism in this award to promote small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contract compliance and performance. The fixed-price nature of the contract provides some level of cost control, assuming the scope of work is clearly defined and managed. Transparency is limited due to the sole-source award, making detailed public scrutiny of cost-effectiveness challenging. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Systems Engineering Support
Aerospace Parts Manufacturing
Military Platform Sustainment

Risk Flags

Sole-source justification requires scrutiny.
Potential for cost overruns due to lack of competition.
Limited transparency in pricing and value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. REPAIRS, SPARES REPAIRS, SPARES-- AND ENGINEERING SERVICES OF VARIOUS PLATFORMS AND ENGINEERING SERVICES OF VARIOUS PLATFORMS AND SYSTEMS.

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 $2.2 million.

What is the period of performance?

Start: 2024-06-17. End: 2026-06-03.

What is Northrop Grumman's track record with similar sole-source contracts for aircraft parts and engineering services?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various platforms and systems. While specific data on their sole-source contract history for similar services is not provided here, they are frequently awarded sole-source or limited-competition contracts due to their specialized capabilities and established role in the defense industrial base. Analysis of past performance would require examining their contract history for adherence to delivery schedules, quality standards, and cost control on previous sole-source awards. Their long-standing relationship with the Department of Defense suggests a generally reliable performance record, but the absence of competition on this specific award warrants scrutiny of pricing and value compared to potential alternatives.

How does the $2.2 million contract value compare to industry benchmarks for similar engineering services and parts for defense platforms?

Benchmarking this $2.2 million contract is challenging without specific details on the platforms and systems involved, the scope of engineering services, and the types of parts required. However, for specialized engineering support and sustainment of complex defense assets, $2.2 million represents a moderate investment. Industry benchmarks often vary widely based on the technological sophistication, criticality, and age of the platforms. Given the sole-source nature, direct comparison to competitively bid contracts is not feasible. A thorough value assessment would necessitate an internal government cost analysis or comparison with historical data for similar, albeit potentially different, sole-source awards to ensure the pricing is reasonable for the services rendered.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with this sole-source award include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or find cost-saving efficiencies, and a lack of transparency in the price negotiation process. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, sole-source awards can limit opportunities for other capable small or large businesses to enter the market or demonstrate their capabilities. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider for critical services, potentially limiting future flexibility and negotiation leverage.

What is the expected effectiveness of this contract in ensuring the operational readiness of the supported platforms?

The effectiveness of this contract in ensuring operational readiness hinges on the quality and timeliness of the repairs, spares, and engineering services provided by Northrop Grumman. As a sole-source award, the government is relying on the contractor's established expertise and commitment to fulfill these critical needs. The fixed-price contract type suggests that the government has a defined budget, but the actual effectiveness will depend on the contractor's performance against the contract requirements. Continuous monitoring by the Defense Contract Management Agency (DCMA) and clear performance metrics within the contract are essential to gauge and ensure its effectiveness in maintaining the readiness of the supported platforms.

What has been the historical spending pattern for similar aircraft parts and engineering services by the Department of Defense?

Historical spending patterns for aircraft parts and engineering services by the Department of Defense are substantial and represent a significant portion of the defense budget. The DoD consistently invests billions annually in sustainment, maintenance, repair, and overhaul (MRO) for its vast fleet of aircraft. This includes spending on spare parts, depot-level maintenance, and specialized engineering support. Spending often involves a mix of competitive contracts for common parts and services, and sole-source or limited-competition contracts for highly specialized, proprietary, or legacy systems where few or no alternatives exist. Analyzing specific historical spending for similar platforms or services would require access to detailed DoD procurement databases.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 600 HICKS RD, ROLLING MEADOWS, IL, 60008

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,239,789

Exercised Options: $2,239,789

Current Obligation: $2,239,789

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852420D0011

IDV Type: IDC

Timeline