DoD Awards $123M for Airframe Components to Northrop Grumman, Raising Oversight Concerns

Contract Overview

Contract Amount: $12,310,883 ($12.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2004-10-25

End Date: 2011-09-30

Contract Duration: 2,531 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200502!028443!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0001 !A!N! !N! ! !20041025!20060630!077652761!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 GRUMMAN RD WEST !BETHPAGE !NY!11714!62500!109!12!SAINT AUGUSTINE !ST. JOHNS !FLORIDA !+000011864737!N!N!000011864737!1560!AIRFRAME STRUCTURAL COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336411!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!J!1!001!N!1A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!A!N! ! ! !Y!1700!N00019!0001! !

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200502!028443!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0001 !A!N! !N! ! !20041025!20060630!077652761!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 GRUMMAN RD WEST !BETHPAGE !NY!11714!62500!109!12!SAINT AUGUSTINE !ST. … Key points: 1. Significant contract value of $123 million awarded for critical airframe structural components. 2. Sole-source award to Northrop Grumman Systems Corporation limits competition and potentially impacts price discovery. 3. Long contract duration of over 8 years (2004-2011) warrants scrutiny for potential cost overruns. 4. The 'DCA' award type suggests a specific, potentially non-competitive, procurement method.

Value Assessment

Rating: questionable

The contract value of $123,108,830 is substantial for airframe structural components. Benchmarking against similar sole-source or limited-competition contracts for specialized components is difficult without more data, but the lack of competition raises concerns about whether this price represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis ('NOT COMPETED'), indicating a lack of competitive bidding. This method limits price discovery and may lead to higher costs for taxpayers compared to a full and open competition.

Taxpayer Impact: The sole-source nature of this large contract raises concerns about potential overpayment and inefficient use of taxpayer funds due to the absence of competitive pressure.

Public Impact

Taxpayers may be paying a premium due to the lack of competition for these critical aircraft components. The extended contract period could lead to sustained higher costs if not properly managed and overseen. Dependence on a single supplier for essential components can create supply chain risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in price justification

Positive Signals

Award to established defense contractor
Potential for specialized expertise

Sector Analysis

This contract falls within the Defense sector, specifically for aircraft components. Spending in this area is critical for national security, but often involves complex, specialized manufacturing where competition can be limited. Benchmarks for such components are highly variable based on specificity and technology.

Small Business Impact

The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no indication in the provided data that small businesses were involved as subcontractors or partners in this specific award, suggesting limited direct benefit to the small business sector from this particular contract.

Oversight & Accountability

The 'DCA' award type and sole-source nature warrant close oversight to ensure fair pricing and prevent potential waste. The long duration also necessitates robust monitoring to track performance and manage costs effectively throughout the contract lifecycle.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition may lead to inflated prices.
Long contract duration increases risk of cost overruns and performance issues.
Sole-source award limits transparency and accountability in pricing.
Potential for vendor lock-in and reduced future negotiating power.
Insufficient data to independently verify price reasonableness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200502!028443!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0001 !A!N! !N! ! !20041025!20060630!077652761!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!600 GRUMMAN RD WEST !BETHPAGE !NY!11714!62500!109!12!SAINT AUGUSTINE !ST. JOHNS !FLORIDA !+000011864737!N!N!000011864737!1560!AIRFRAME STRUCTURAL COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336411!E! !3! ! ! ! ! !202

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 Navy).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2004-10-25. End: 2011-09-30.

What specific justification was provided for the sole-source award, and how was the price determined to be fair and reasonable without competition?

The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source justification was applied. However, the specific details of this justification and the methodology used to determine price reasonableness are not present. Typically, sole-source awards require extensive documentation, including cost/price analyses, to ensure the government is not overpaying. Without this documentation, it's difficult to assess the fairness of the $123 million price.

Given the long contract duration (2004-2011), what mechanisms were in place to manage potential cost increases and ensure continued value for money?

The contract spanned nearly eight years, from October 2004 to September 2011. Long-duration contracts require proactive management, including regular performance reviews, potential price adjustments based on economic factors (if stipulated), and oversight to prevent scope creep or inefficiencies. The data does not detail these specific management mechanisms, making it hard to evaluate their effectiveness in ensuring value over time.

How does the unit cost or total value of these airframe structural components compare to similar components procured competitively by the DoD or other agencies?

Direct comparison is challenging without specific component identification and competitive benchmark data. The $123 million total award value for 'AIRFRAME STRUCTURAL COMPONENTS' is significant. However, the lack of competition for this specific award prevents a direct 'apples-to-apples' cost comparison. Assessing value would require analyzing the specific technical requirements and comparing them to competitively procured, similarly complex components, which is not possible with the current data.

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 (UEI: 967356127)

Address: 600 GRUMMAN RD WEST, BETHPAGE, NY, 03

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline