DoD awards Northrop Grumman $113M for Aircraft Manufacturing, a sole-source contract
Contract Overview
Contract Amount: $112,966,503 ($113.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2006-01-17
End Date: 2015-02-27
Contract Duration: 3,328 days
Daily Burn Rate: $33.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367
Plain-Language Summary
Department of Defense obligated $113.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: Key points: 1. Significant contract value of $113M awarded to a single large business. 2. Sole-source award indicates limited competition, potentially impacting price discovery. 3. Long contract duration (2006-2015) suggests a substantial, ongoing requirement. 4. The 'Aircraft Manufacturing' sector is critical for defense capabilities.
Value Assessment
Rating: questionable
The contract value of $113M is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar aircraft manufacturing contracts. The lack of competition raises concerns about potential overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits price discovery and may lead to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition in this large contract likely results in higher costs for taxpayers, as there was no market pressure to drive down prices.
Public Impact
Taxpayers may have paid a premium due to the absence of competitive bidding. The long-term nature of the contract suggests a sustained need for these aircraft. Dependence on a single contractor for critical aircraft manufacturing can pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Award to established large business
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a key component of the defense industrial base. Spending in this area is often characterized by high R&D costs and specialized production, with significant government oversight required.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The 'sole-source' nature of this contract warrants close oversight to ensure fair pricing and adherence to contract terms. The Defense Contract Management Agency's involvement suggests ongoing monitoring.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Long contract duration
- No small business participation indicated
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 $113.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. See the official description on USAspending.
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 $113.0 million.
What is the period of performance?
Start: 2006-01-17. End: 2015-02-27.
What was the justification for the sole-source award, and how was the price determined to be fair and reasonable in the absence of competition?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. Price reasonableness in such cases is often determined through cost analysis, comparison to historical data, or independent government cost estimates. Without specific details on the justification and pricing methodology, it's difficult to fully assess value.
What are the long-term risks associated with relying on a sole-source provider for critical aircraft manufacturing, especially given the contract's duration?
Long-term reliance on a sole-source provider can lead to vendor lock-in, reduced innovation, and potential price escalations over time. It also creates a significant supply chain risk if the contractor faces financial difficulties or production issues. This dependence can limit the government's flexibility in adapting to new technologies or changing strategic needs.
How effective was this contract in meeting the Department of Defense's requirements for aircraft manufacturing over its lifespan?
Assessing effectiveness requires data on delivery schedules, performance metrics, and the operational readiness of the manufactured aircraft. While the contract was awarded and presumably fulfilled, the lack of competition makes it harder to definitively state if it was the *most* effective or cost-efficient method to achieve those requirements compared to a competitive scenario.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
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: 21240 BURBANK BLVD, WOODLAND HILLS, CA, 91367
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $114,843,663
Exercised Options: $114,843,663
Current Obligation: $112,966,503
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-01-17
Current End Date: 2015-02-27
Potential End Date: 2015-02-27 00:00:00
Last Modified: 2018-09-27
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