DoD awards $120M for Global Hawk Enterprise Services to Northrop Grumman, a sole-source contract
Contract Overview
Contract Amount: $119,608,123 ($119.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-03-08
End Date: 2023-04-13
Contract Duration: 1,497 days
Daily Burn Rate: $79.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: GLOBAL HAWK, ENTERPRISE SERVICES
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $119.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GLOBAL HAWK, ENTERPRISE SERVICES Key points: 1. Significant contract value of $119.6M for critical defense enterprise services. 2. Sole-source award to Northrop Grumman raises questions about competition and potential price inflation. 3. Contract duration of nearly 5 years suggests long-term reliance on this provider. 4. Focus on Aircraft Manufacturing sector highlights specialized and potentially high-cost components.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes a direct pricing assessment difficult without comparable data. The lack of competition inherently limits the government's ability to ensure the most cost-effective solution.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher prices and reduced innovation as the government lacks leverage from market forces.
Taxpayer Impact: The absence of competition in this sole-source award may result in taxpayers paying a premium for these enterprise services, as there was no market pressure to drive down costs.
Public Impact
Ensures continued operation and support for the Global Hawk unmanned aerial system. Potential for cost overruns due to the sole-source and CPFF contract type. Impacts the Department of Defense's budget for intelligence, surveillance, and reconnaissance capabilities. Limited visibility into the specific services provided under 'Enterprise Services'.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee pricing can incentivize overspending.
- Lack of transparency in 'Enterprise Services'.
- Long contract duration without re-competition.
Positive Signals
- Ensures continuity of critical Global Hawk operations.
- Established relationship with a known provider.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically supporting the Global Hawk program. Spending in this area is typically high due to the complex technology and specialized nature of unmanned aerial systems and their associated support services.
Small Business Impact
The data does not indicate any subcontracting to small businesses. The prime contractor, Northrop Grumman, is a large aerospace and defense company, suggesting limited direct opportunities for small businesses in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight from the Defense Contract Management Agency to ensure fair pricing and performance. Robust auditing of costs under the CPFF structure is crucial for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of defined scope for 'Enterprise Services'
- No indication of small business participation
- Long contract duration without re-competition
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $119.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GLOBAL HAWK, ENTERPRISE SERVICES
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $119.6 million.
What is the period of performance?
Start: 2019-03-08. End: 2023-04-13.
What specific enterprise services are included under this contract, and how do they directly support the Global Hawk's mission effectiveness?
The contract details 'Enterprise Services' without specific breakdown, making it difficult to assess their direct contribution. These likely encompass IT infrastructure, software maintenance, data management, and potentially logistics support critical for the Global Hawk's operational readiness and data processing capabilities.
Given the sole-source award and CPFF structure, what mechanisms are in place to prevent cost overruns and ensure value for money?
While CPFF contracts can be prone to overruns, oversight mechanisms should include rigorous cost auditing, performance metrics tied to fee, and regular reviews of the contractor's cost accounting practices. The contracting officer must actively manage the contract to ensure the fixed fee remains appropriate and costs are reasonable and allocable.
Could this requirement have been met through a competitive process, and what are the long-term implications of not pursuing competition?
Without further information on market availability and technical requirements, it's hard to definitively say. However, sole-sourcing often implies unique capabilities or urgent needs. The long-term implication of not competing is the potential for sustained higher costs and missed opportunities for innovation from a broader market.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
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: $144,385,873
Exercised Options: $144,385,873
Current Obligation: $119,608,123
Actual Outlays: $14,953,194
Subaward Activity
Number of Subawards: 204
Total Subaward Amount: $180,349,777
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862015D3009
IDV Type: IDC
Timeline
Start Date: 2019-03-08
Current End Date: 2023-04-13
Potential End Date: 2023-04-13 00:00:00
Last Modified: 2024-05-31
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