DoD Awards Northrop Grumman $13.6M for Airframe Components, Raising Oversight Concerns
Contract Overview
Contract Amount: $13,613,225 ($13.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2006-04-28
End Date: 2011-09-30
Contract Duration: 1,981 days
Daily Burn Rate: $6.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200607!000347!5700!FA8620!ASC/RAK !FA862006C4017 !A!N! !N! ! !20060428!20080430!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 HICKS RD !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK !ILLINOIS !+000012499000!Y!N!000012499000!1560!AIRFRAME STRUCTURAL COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !334414!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!U!J!1!001!N!6A!A!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: ROLLING MEADOWS, COOK County, ILLINOIS, 60008
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $13.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200607!000347!5700!FA8620!ASC/RAK !FA862006C4017 !A!N! !N! ! !20060428!20080430!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 HICKS RD !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK… Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for airframe structural components. 2. Significant contract value of $13.6 million awarded. 3. The contract was not competed, raising potential concerns about price discovery and value. 4. The sector is Defense, specifically Air Force procurement of aircraft equipment.
Value Assessment
Rating: questionable
The contract value of $13.6 million for airframe structural components needs further benchmarking against similar sole-source or limited-competition awards to assess its reasonableness. Without competitive pricing, it's difficult to definitively determine if this represents excellent value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited-competition award. This limits price discovery and may result in higher costs for taxpayers compared to a full and open competition.
Taxpayer Impact: The lack of competition for a $13.6 million contract could lead to suboptimal pricing, potentially costing taxpayers more than necessary for these airframe components.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The Department of Defense is procuring critical airframe components, essential for aircraft maintenance and readiness. The award to a large corporation like Northrop Grumman highlights the significant role of major defense contractors in the supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Limited transparency in pricing
Positive Signals
- Award to established defense contractor
- Procurement of essential aircraft components
Sector Analysis
This contract falls within the Defense sector, specifically supporting the Department of the Air Force's need for airframe structural components. Spending in this area is critical for maintaining military aviation capabilities, with benchmarks often influenced by specialized manufacturing and limited supplier options.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no indication in the provided data whether small businesses were involved as subcontractors, which warrants further investigation to ensure opportunities for small business participation.
Oversight & Accountability
The non-competitive nature of this award suggests a need for robust oversight to ensure the government received fair pricing and that the justification for sole-source procurement was sound. Accountability for the expenditure of $13.6 million is crucial.
Related Government Programs
- Electronic Capacitor Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition raises concerns about fair pricing.
- Potential for taxpayer overpayment due to non-competitive award.
- Limited transparency in the procurement process.
- Need for detailed justification for sole-source award.
- Uncertainty regarding small business subcontracting opportunities.
Tags
electronic-capacitor-manufacturing, department-of-defense, il, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200607!000347!5700!FA8620!ASC/RAK !FA862006C4017 !A!N! !N! ! !20060428!20080430!005128988!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 HICKS RD !ROLLING MEADOW !IL!60008!65338!031!17!ROLLING MEADOWS !COOK !ILLINOIS !+000012499000!Y!N!000012499000!1560!AIRFRAME STRUCTURAL COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !334414!E! !3! ! ! ! ! !999
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 $13.6 million.
What is the period of performance?
Start: 2006-04-28. End: 2011-09-30.
What is the specific justification for awarding this contract on a sole-source basis, and how does it align with FAR regulations for non-competitive procurements?
The provided data indicates the contract was 'NOT COMPETED'. A detailed review of the contract file would be necessary to ascertain the specific justification, such as a lack of available sources, urgent and compelling needs, or specific technical requirements that only Northrop Grumman could meet. This justification must align with Federal Acquisition Regulation (FAR) Part 6 requirements for competitive procedures.
How does the unit cost of these airframe structural components compare to industry benchmarks for similar parts, especially considering the sole-source nature of the award?
Without specific unit cost data and comparable market research, it is challenging to establish a precise benchmark. However, sole-source contracts inherently carry a higher risk of inflated pricing. A thorough cost analysis, potentially involving independent government cost estimates or comparisons with previously awarded contracts for similar components, would be required to assess value.
What is the long-term strategic value of this sole-source award for the Air Force's inventory and sustainment of its aircraft fleet?
The long-term strategic value depends on the criticality and uniqueness of these airframe structural components. If they are proprietary to Northrop Grumman's designs or essential for specific legacy aircraft systems with limited alternatives, the sole-source award might be strategically justified for sustainment. However, this should be periodically re-evaluated to explore potential competition or alternative solutions.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Electronic Capacitor 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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 HICKS RD, ROLLING MEADOW, IL
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,688,016
Exercised Options: $14,189,016
Current Obligation: $13,613,225
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2006-04-28
Current End Date: 2011-09-30
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2011-08-18
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