DoD Awards $81.7M Northrop Grumman Contract for Aircraft Manufacturing, No Competition

Contract Overview

Contract Amount: $81,738,613 ($81.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-06-15

End Date: 2026-06-14

Contract Duration: 1,095 days

Daily Burn Rate: $74.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENTERPRISE SERVICES III

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $81.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ENTERPRISE SERVICES III Key points: 1. Significant contract value of $81.7 million awarded. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Potential for higher costs due to lack of competitive bidding. 4. Aircraft manufacturing sector sees substantial government investment.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive benchmarks, assessing the pricing's fairness is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to less favorable pricing for the government.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these aircraft manufacturing services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on a single contractor for critical aircraft manufacturing. Limited transparency into the justification for a sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of transparency in justification

Positive Signals

Contract awarded to established defense contractor
Clear delivery and performance periods

Sector Analysis

This award falls within the aircraft manufacturing sector, a critical area for defense spending. Benchmarks for similar sole-source contracts are difficult to ascertain without more data.

Small Business Impact

This contract does not appear to include provisions for small business participation, as indicated by the 'sb' field being false.

Oversight & Accountability

The justification for this sole-source award requires thorough oversight to ensure it was indeed necessary and that fair pricing was pursued.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ENTERPRISE SERVICES III

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 $81.7 million.

What is the period of performance?

Start: 2023-06-15. End: 2026-06-14.

What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without further documentation, it's impossible to confirm the specific reason. Steps to ensure fair pricing in sole-source contracts often include detailed cost analysis, historical pricing reviews, and negotiation with the contractor, but the effectiveness of these measures is unknown here.

What are the potential risks associated with a sole-source, cost-plus fixed fee contract in aircraft manufacturing?

The primary risks include inflated costs due to the absence of competition, potential for contractor inefficiencies being passed on to the government, and reduced incentive for innovation. The cost-plus nature means the government bears more cost risk, and without competitive pressure, the contractor may have less motivation to control expenses or seek cost-saving measures.

How does this contract contribute to the overall effectiveness of the Air Force's aircraft manufacturing capabilities?

This contract likely supports specific aircraft programs or sustainment efforts, contributing to the Air Force's operational readiness. However, the effectiveness is intertwined with the value and quality of the services provided. The sole-source nature raises questions about whether alternative, potentially more effective or cost-efficient solutions were overlooked.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › EQUIPMENT AND MATERIALS TESTING

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $111,560,179

Exercised Options: $82,352,131

Current Obligation: $81,738,613

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $10,575,818

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA869021D1009

IDV Type: IDC

Timeline