DoD awards $187M contract to Northrop Grumman for long lead aircraft parts, raising competition concerns
Contract Overview
Contract Amount: $186,882,002 ($186.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2009-04-22
End Date: 2014-04-30
Contract Duration: 1,834 days
Daily Burn Rate: $101.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LOT 9 BASIC CONTRACT WITH SELECTED LONG LEAD
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $186.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LOT 9 BASIC CONTRACT WITH SELECTED LONG LEAD Key points: 1. Significant contract value of $186.8M awarded for aircraft manufacturing. 2. Sole-source award to Northrop Grumman limits competitive pricing opportunities. 3. Long lead time nature of the contract suggests potential for future cost escalations. 4. Focus on Aircraft Manufacturing (NAICS 336411) indicates a specialized defense sector.
Value Assessment
Rating: questionable
The contract value of $186.8M is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar aircraft manufacturing contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition in this sole-source award could lead to inflated prices, negatively impacting taxpayer funds allocated for defense procurement.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The long lead nature of the contract could impact program timelines and budgets. Dependence on a single contractor for critical aircraft components poses a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long lead time
Positive Signals
- Definitive contract awarded
- Firm fixed price contract type
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industry. Spending in this sector is often characterized by high R&D costs and specialized production, making competitive benchmarking challenging.
Small Business Impact
The data indicates this contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation in this specific award, suggesting missed opportunities for small business engagement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price is justifiable and that future opportunities are competed where feasible.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing due to no competition.
- Long lead time may indicate complex or specialized components.
- No small business participation noted.
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 $186.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LOT 9 BASIC CONTRACT WITH SELECTED LONG LEAD
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 $186.9 million.
What is the period of performance?
Start: 2009-04-22. End: 2014-04-30.
What specific aircraft components or systems does 'LOT 9 BASIC CONTRACT WITH SELECTED LONG LEAD' refer to, and what is the justification for the sole-source award?
The specific components are not detailed in the provided data. However, 'long lead' typically refers to parts or materials that require significant manufacturing or procurement time, often impacting overall program schedules. The justification for a sole-source award usually stems from unique capabilities, proprietary technology, or critical integration requirements that only one contractor can meet, though this needs thorough validation to prevent anti-competitive outcomes.
How does the firm fixed price (FFP) contract type mitigate risks associated with the long lead time and sole-source nature of this award?
A Firm Fixed Price (FFP) contract aims to shift cost risk to the contractor by establishing a set price regardless of actual costs incurred. For a long lead item awarded sole-source, FFP provides some cost certainty for the government. However, the contractor may have built significant contingency into the price due to the lack of competition and the inherent risks of long production cycles, potentially leading to a higher overall cost than if competition were present.
What is the potential impact on future aircraft program costs and timelines if this sole-source award is not transitioned to a competitive environment?
If this sole-source award continues without competition, future aircraft program costs could remain elevated as the government lacks the leverage of competitive bidding to drive down prices. Program timelines might also be affected if the sole-source contractor faces production challenges or if the government seeks alternative solutions, which would then require a new competitive procurement process, potentially causing delays.
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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92127
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $191,035,541
Exercised Options: $191,035,541
Current Obligation: $186,882,002
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-04-22
Current End Date: 2014-04-30
Potential End Date: 2014-04-30 00:00:00
Last Modified: 2025-04-21
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)