Northrop Grumman awarded $15.15M contract for Gust Load Alleviation Lot 2 by the Air Force

Contract Overview

Contract Amount: $15,152,324 ($15.2M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2020-01-17

End Date: 2022-11-30

Contract Duration: 1,048 days

Daily Burn Rate: $14.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UPPER GUST LOAD ALLEVIATION LOT 2

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $15.2 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: UPPER GUST LOAD ALLEVIATION LOT 2 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 1048 days suggests a significant, long-term project. 3. The fixed-price contract type shifts performance risk to the contractor. 4. The absence of small business set-asides may limit opportunities for smaller firms. 5. This contract falls within the Aircraft Manufacturing sector, indicating specialized defense needs.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding. As a sole-source award, there's no direct comparison to market rates or other proposals. The fixed-price nature provides some cost certainty, but the absence of competition raises concerns about whether the government secured the best possible price. Further analysis would require understanding the specific technical requirements and the contractor's cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor possesses the necessary capabilities or technology. The lack of competition means there were no other bidders to drive down prices through a bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to achieve lower prices, potentially resulting in less favorable terms for taxpayers.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving advanced aircraft components. The contract supports the development and production of systems for aircraft load alleviation. The contract is geographically tied to California, where Northrop Grumman Systems Corp is located. This contract likely supports a specialized workforce within the aerospace and defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for cost overruns if not closely managed, despite fixed-price type.

Positive Signals

Award to a known contractor with established capabilities in aerospace manufacturing.
Fixed-price contract type provides cost certainty for the government.
Contract supports critical defense capabilities for the Air Force.

Sector Analysis

This contract operates within the Aircraft Manufacturing sector (NAICS 336411), a highly specialized and technologically advanced industry. The market is characterized by high barriers to entry, significant R&D investment, and a concentration of large, established players like Northrop Grumman. Spending in this sector is driven by defense procurement needs, with contracts often being long-term and high-value due to the complexity of the products. Comparable spending benchmarks would typically involve other large-scale aircraft component or system development contracts within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to a large prime contractor like Northrop Grumman suggests that subcontracting opportunities may exist for small businesses within their supply chain. However, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, which incentivizes the contractor to meet specifications within budget. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Component Manufacturing
Aerospace Systems Development
Defense Procurement Contracts
Air Force Major Weapon Systems

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.2 million to NORTHROP GRUMMAN SYSTEMS CORP. UPPER GUST LOAD ALLEVIATION LOT 2

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

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 $15.2 million.

What is the period of performance?

Start: 2020-01-17. End: 2022-11-30.

What is the specific technical function of 'UPPER GUST LOAD ALLEVIATION LOT 2' and why was it deemed sole-source?

The 'UPPER GUST LOAD ALLEVIATION LOT 2' likely refers to a system designed to reduce the stress on an aircraft's airframe caused by turbulence (gusts). This system aims to improve aircraft longevity and potentially enhance flight stability. The sole-source justification would typically stem from proprietary technology, unique manufacturing capabilities, or a critical need for integration with existing platforms where only one contractor, Northrop Grumman in this case, possesses the required expertise and intellectual property. Without specific documentation, the exact technical details and the precise reasons for sole-sourcing remain speculative but are generally rooted in specialized defense requirements.

How does the $15.15 million contract value compare to similar gust load alleviation systems or aircraft component contracts?

Direct comparison of the $15.15 million value for 'UPPER GUST LOAD ALLEVIATION LOT 2' is difficult without access to a broader database of similar sole-source awards or detailed cost breakdowns. However, for specialized aircraft components and systems, especially those developed by major defense contractors like Northrop Grumman, this value is within a plausible range. Contracts for advanced avionics, structural components, or unique system integrations can easily reach multi-million dollar figures. The lack of competition means this figure isn't benchmarked against market alternatives, making a definitive value assessment challenging. It's essential to consider the scope, complexity, and duration (1048 days) when evaluating this amount.

What are the primary risks associated with this sole-source, fixed-price contract for the Department of Defense?

The primary risk associated with this sole-source, fixed-price contract is the potential for inflated pricing due to the absence of competitive bidding. While fixed-price contracts shift performance risk to the contractor, the government may overpay if the initial price wasn't rigorously negotiated against market alternatives. Another risk is contractor performance; if Northrop Grumman encounters unforeseen technical challenges, the fixed-price nature could lead to disputes or a focus on meeting minimum requirements rather than exceeding them. Furthermore, the lack of competition can reduce the incentive for innovation and efficiency compared to a more open procurement process.

What is Northrop Grumman's track record with the Department of the Air Force, particularly in aircraft manufacturing and systems integration?

Northrop Grumman Systems Corporation has a long and extensive track record as a major defense contractor for the Department of the Air Force and other branches of the U.S. military. They are involved in numerous high-profile programs, including the B-21 Raider stealth bomber, E-2D Advanced Hawkeye airborne early warning aircraft, and various satellite and space systems. Their expertise spans aircraft design, manufacturing, systems integration, and advanced technologies. Given their established presence and capabilities in complex aerospace projects, the Air Force likely views them as a trusted partner for critical systems like gust load alleviation, although this specific contract's sole-source nature warrants scrutiny.

How has federal spending on aircraft manufacturing (NAICS 336411) trended in recent years, and where does this contract fit?

Federal spending on aircraft manufacturing (NAICS 336411) has historically been substantial, driven primarily by Department of Defense procurement. Trends often fluctuate based on major program starts, sustainment needs, and overall defense budgets. In recent years, spending has remained robust, particularly on next-generation fighter jets, bombers, and support aircraft. This $15.15 million contract, while significant for a single delivery order, represents a small fraction of the total federal expenditure within this sector. It fits within the broader category of specialized component or system development and production, supporting the Air Force's ongoing modernization and sustainment efforts for its fleet.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: 3520 E AVE M, PALMDALE, CA, 93550

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

Financial Breakdown

Contract Ceiling: $15,254,350

Exercised Options: $15,254,350

Current Obligation: $15,152,324

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $1,485,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA861614D6060

IDV Type: IDC

Timeline