DoD awards Northrop Grumman $186.6M for Aircraft Fixed Wing Manufacturing, raising value concerns
Contract Overview
Contract Amount: $332,674,356 ($332.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2006-05-24
End Date: 2012-07-31
Contract Duration: 2,260 days
Daily Burn Rate: $147.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: TAS::97 0100::TAS 200608!000409!5700!FA8620!ASC/RAK !FA862006C3002 !A!N! !N! ! !20060524!20070531!186618869!186618869!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP RD !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000060621200!N!N!000060621200!1510!AIRCRAFT FIXED WING !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336411!E! !1! ! ! ! ! !99990909!B! ! !A! !D!N!L!1!001!N!1G!A!N!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $332.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TAS::97 0100::TAS 200608!000409!5700!FA8620!ASC/RAK !FA862006C3002 !A!N! !N! ! !20060524!20070531!186618869!186618869!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP RD !SAN DIEGO !CA!92127!66000!073!06!SAN DIE… Key points: 1. The contract's total value is $186.6 million, with $147.2 million obligated. 2. Northrop Grumman Systems Corporation is the sole awardee. 3. The contract is for Aircraft Manufacturing, specifically Fixed Wing. 4. The contract was awarded using a 'Not Competed' method, raising potential value concerns.
Value Assessment
Rating: questionable
The obligated amount of $147.2 million is a significant portion of the total $186.6 million award. Without competitive bidding, it's difficult to assess if this price represents fair market value for aircraft manufacturing services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source 'Not Competed' strategy. This limits price discovery and may result in a higher cost to the government compared to a competitively bid contract.
Taxpayer Impact: The lack of competition could lead to taxpayers paying more than necessary for these aircraft manufacturing services.
Public Impact
Significant taxpayer funds are allocated to a single contractor for aircraft manufacturing. The 'Not Competed' award method warrants scrutiny regarding cost-effectiveness. The contract duration extends over several years, indicating a long-term commitment of resources. The specific nature of 'Aircraft Fixed Wing' suggests a focus on a critical defense capability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
Positive Signals
- Definitive contract awarded
- Clear product service code (336411)
- Specific end dates provided
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing. Defense spending on aircraft is substantial, and competitive bidding is typically sought to ensure value for money.
Small Business Impact
There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors.
Oversight & Accountability
The sole-source nature of this award suggests a need for robust oversight to ensure the government is receiving fair value and that the justification for not competing was sound.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award raises concerns about potential overpricing.
- Lack of competitive bidding limits transparency and price discovery.
- Significant contract value could be subject to inefficiencies without competition.
- Potential for contractor lock-in due to specialized nature of work.
Tags
aircraft-manufacturing, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $332.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TAS::97 0100::TAS 200608!000409!5700!FA8620!ASC/RAK !FA862006C3002 !A!N! !N! ! !20060524!20070531!186618869!186618869!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP RD !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000060621200!N!N!000060621200!1510!AIRCRAFT FIXED WING !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336411!E
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 $332.7 million.
What is the period of performance?
Start: 2006-05-24. End: 2012-07-31.
What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of adequate competition. Without further documentation, it's impossible to determine the specific rationale. However, the absence of competition inherently raises questions about whether alternative solutions or providers were considered and why they were deemed unsuitable.
How does the pricing structure of this Fixed Price Incentive contract compare to industry benchmarks for similar aircraft manufacturing services?
Assessing the pricing requires detailed cost breakdowns and comparison with market data for similar fixed-wing aircraft manufacturing. Fixed Price Incentive contracts aim to share risk and reward between the government and contractor based on performance targets. Without access to the contract's specific incentive clauses and cost data, a direct benchmark comparison is not feasible from this summary alone.
What is the long-term strategic value of this sole-source contract for the Department of Defense's aircraft manufacturing capabilities?
The long-term value depends on the criticality of the specific aircraft, Northrop Grumman's unique role in its production, and the overall defense strategy. If this contract supports a vital, specialized platform where Northrop Grumman is the sole provider, it ensures capability continuity. However, the lack of competition limits opportunities for innovation and cost reduction that could arise from a more open market.
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
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2006-05-24
Current End Date: 2012-07-31
Potential End Date: 2012-07-31 00:00:00
Last Modified: 2023-07-30
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)