DoD's $18.3M contract for aircraft parts awarded to Litton Systems, Inc. with no competition

Contract Overview

Contract Amount: $18,347,787 ($18.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2005-06-13

End Date: 2009-12-15

Contract Duration: 1,646 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200509!000442!5700!FA8620!ASC/RAK !FA862005C3023 !A!N! !N! ! !20050613!20090228!039134218!001922749!016435559!N!LITTON SYSTEMS, INC !21240 BURBANK BLVD !WOODLAND HILLS !CA!91367!86356!037!06!WOODLAND HILLS !LOS ANGELES !CALIFORNIA!+000014485095!N!N!000014485095!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !3! ! ! ! ! !20200930!B! ! !N!Z!D!U!J!1!001!N!6A!Z!Y!F! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200509!000442!5700!FA8620!ASC/RAK !FA862005C3023 !A!N! !N! ! !20050613!20090228!039134218!001922749!016435559!N!LITTON SYSTEMS, INC !21240 BURBANK BLVD !WOODLAND HILLS !CA!91367!86356!037!06!WOODLAND HILLS !LOS … Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of competitive pricing. 2. The contract's duration of over 4 years suggests a significant need for these aircraft components. 3. Awarded by the Department of the Air Force, indicating a focus on aviation-related procurement. 4. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category suggests specialized components rather than general supplies. 5. The firm fixed-price contract type aims to control costs, but the lack of competition limits price discovery. 6. The contractor, Litton Systems, Inc., is located in California, a hub for aerospace and defense industries.

Value Assessment

Rating: questionable

The total award amount of $18.3 million for aircraft parts over approximately 4.5 years warrants scrutiny due to the sole-source nature of the award. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition suggests that the government may not have secured the best possible price for these components. Further analysis would be needed to compare the unit costs or overall value against industry standards for similar specialized aircraft parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one bidder, Litton Systems, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive environment. It is unclear why this contract was not competed, which could be due to factors like specialized capabilities or a lack of available sources.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft parts due to the absence of competition. Without competing offers, there is less pressure on the contractor to offer the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the Department of the Air Force and potentially other military branches requiring specialized aircraft components. The services delivered involve the provision of 'Other Aircraft Parts and Auxiliary Equipment,' crucial for maintaining and operating aircraft. The geographic impact is primarily within the United States, with the contractor based in California. Workforce implications include employment at Litton Systems, Inc. and its supply chain, supporting the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to higher costs for taxpayers.
Lack of transparency in the procurement process due to the absence of multiple bids.
Potential for contractor lock-in if alternative sources are not readily available or qualified.
Limited visibility into the contractor's cost structure without competitive proposals.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government once awarded.
The contract addresses a specific need for aircraft parts, indicating essential operational support.
The contractor is a known entity in the aerospace sector, suggesting some level of established capability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for such components is often specialized, with a limited number of manufacturers possessing the necessary certifications and capabilities. The total award of $18.3 million over its period of performance is a moderate-sized contract within this niche. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar specialized aircraft components within the Department of Defense.

Small Business Impact

There is no indication that this contract involved a small business set-aside. The prime contractor, Litton Systems, Inc., is a significant entity. The contract does not explicitly mention subcontracting plans for small businesses, and without further details on the procurement, it's difficult to assess the impact on the small business ecosystem. Typically, sole-source awards offer fewer opportunities for small business subcontracting compared to competitively bid contracts that may include small business participation goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the delivery of specified aircraft parts according to the firm fixed-price agreement. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Aircraft Component Procurement
Aerospace Manufacturing Contracts
Department of Defense Supply Chain
Sole-Source Defense Contracts
Air Force Logistics and Maintenance

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200509!000442!5700!FA8620!ASC/RAK !FA862005C3023 !A!N! !N! ! !20050613!20090228!039134218!001922749!016435559!N!LITTON SYSTEMS, INC !21240 BURBANK BLVD !WOODLAND HILLS !CA!91367!86356!037!06!WOODLAND HILLS !LOS ANGELES !CALIFORNIA!+000014485095!N!N!000014485095!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !3! ! ! ! ! !202

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 $18.3 million.

What is the period of performance?

Start: 2005-06-13. End: 2009-12-15.

What is the track record of Litton Systems, Inc. in fulfilling government contracts, particularly for aircraft parts?

Litton Systems, Inc., as a contractor, has a history of involvement in defense and aerospace. While specific details of their past performance on similar contracts require deeper database analysis, their presence in this sector suggests experience. However, the sole-source nature of this particular award means that its successful fulfillment doesn't necessarily indicate superior performance compared to potential competitors. A review of past performance evaluations, if available in federal databases, would provide a more comprehensive understanding of their reliability and quality of work on previous government engagements. Without such data, assessing their track record relies on general industry knowledge and the specifics of this contract's execution.

How does the $18.3 million award compare to similar aircraft parts contracts awarded by the DoD?

Comparing the $18.3 million award for 'Other Aircraft Parts and Auxiliary Equipment' requires careful consideration of the specific components, quantities, and contract duration. As a sole-source award, direct price comparisons are challenging. However, general benchmarks for aircraft parts can range significantly based on complexity and specialization. For specialized, high-value components, $18.3 million over approximately 4.5 years might be within a reasonable range if the items are unique or require extensive manufacturing processes. Conversely, if the parts are more standardized, this amount could indicate a higher-than-average cost due to the lack of competition. A detailed analysis would involve identifying comparable parts and their market prices, which is difficult without more granular data on this contract's deliverables.

What are the primary risks associated with a sole-source award of this magnitude for aircraft parts?

The primary risks associated with a sole-source award of $18.3 million for aircraft parts include potential cost overruns and reduced value for taxpayer money. Without competition, there is less incentive for the contractor to offer the lowest possible price, potentially leading to inflated costs. Another risk is the lack of innovation; competitive environments often drive contractors to find more efficient or advanced solutions. Furthermore, reliance on a single source can create supply chain vulnerabilities if the contractor faces production issues or goes out of business. Finally, the absence of a competitive process can raise concerns about fairness and transparency in government procurement.

How effective is the firm fixed-price contract type in managing costs for specialized aircraft components?

The firm fixed-price (FFP) contract type is generally effective in managing costs for specialized aircraft components by shifting the risk of cost overruns to the contractor. This means the government agrees to pay a set price, regardless of the contractor's actual costs. For the government, this provides budget certainty. However, the effectiveness of FFP is significantly diminished in a sole-source scenario. While the price is fixed, the initial negotiation of that price lacks the downward pressure that competition provides. Therefore, while the government knows its total liability, the fixed price itself might be higher than it would have been under a competitive award, potentially reducing the overall value for money.

What is the historical spending pattern for 'Other Aircraft Parts and Auxiliary Equipment' by the Department of the Air Force?

Historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment' by the Department of the Air Force are substantial, reflecting the continuous need to maintain and upgrade its vast aircraft fleet. This category encompasses a wide array of components, from engine parts to avionics and structural elements. Annual spending can fluctuate based on modernization programs, operational tempo, and specific fleet requirements. While this $18.3 million contract represents a single award, the Air Force's overall expenditure in this area is in the billions of dollars annually across numerous contracts, both competitive and sole-source. Analyzing trends requires looking at aggregated data over several fiscal years to identify patterns in demand, pricing, and sourcing strategies.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 32

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline