Northrop Grumman's $186.6M Global Hawk contract awarded in 2005 for aircraft management support
Contract Overview
Contract Amount: $81,390,647 ($81.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2005-08-31
End Date: 2013-06-30
Contract Duration: 2,860 days
Daily Burn Rate: $28.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: TAS::97 0100::TAS 200511!386943!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0057 !A!N! !N! ! !20050831!20051130!186618869!186618869!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP RD !SAN DIEGO !CA!92150!60650!037!24!PATUXENT RIVER NAS !ST. MARY S !MARYLAND !+000003622729!N!N!000003622729!AC16!RDTE/AIRCRAFT-MANAGEMENT SUPPORT !A1A!AIRFRAMES AND SPARES !252 !GLOBAL HAWK !336411!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!U!1!001!N!1A!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y!1700!N00019!0001! !
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $81.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: TAS::97 0100::TAS 200511!386943!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0057 !A!N! !N! ! !20050831!20051130!186618869!186618869!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP RD !SAN DIEGO !CA!92150!60650!037!24!PATUXEN… Key points: 1. Contract awarded for aircraft management support, indicating a focus on maintaining and enhancing existing aerial platforms. 2. The contract's duration of over 8 years suggests a long-term need for these services. 3. Awarded as a sole-source contract, raising questions about potential cost efficiencies and market competition. 4. The significant value of the contract points to a critical role in defense operations. 5. Northrop Grumman's extensive experience in aerospace likely influenced the sole-source award. 6. The contract falls under the 'Aircraft Manufacturing' industrial sector, highlighting its defense-centric nature.
Value Assessment
Rating: questionable
The contract value of $186.6 million over its lifespan is substantial. Without comparable sole-source contracts for similar services, it is difficult to definitively benchmark value. However, sole-source awards often carry a higher risk of inflated pricing due to the lack of competitive pressure. Further analysis would require access to internal cost data or more specific market intelligence on aircraft management support services.
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 among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when urgent circumstances preclude a full and open competition. The lack of competition means that pricing and terms were negotiated directly with Northrop Grumman, potentially limiting opportunities for cost savings that could arise from a competitive bidding process.
Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from the price reductions and innovation that often result from competitive bidding. This could lead to a higher overall cost for the government and, consequently, for taxpayers.
Public Impact
The primary beneficiary is the U.S. Navy, which receives critical aircraft management support for its operations. Services delivered include management support for the Global Hawk unmanned aerial system, crucial for intelligence, surveillance, and reconnaissance missions. The geographic impact is likely global, given the operational nature of the Global Hawk, though the contractor is based in California. Workforce implications include employment opportunities for skilled personnel at Northrop Grumman, particularly in engineering, program management, and technical support roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
- Long contract duration may reduce flexibility to adapt to changing technological needs or market conditions.
- Lack of transparency inherent in sole-source negotiations makes independent value assessment challenging.
Positive Signals
- Award to an experienced contractor (Northrop Grumman) suggests a high likelihood of successful service delivery.
- Focus on aircraft management support indicates a commitment to maintaining critical defense assets.
- The contract's value and duration suggest a significant and ongoing need for these specialized services.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. The market for unmanned aerial systems (UAS) and their associated management support is a rapidly growing segment of the defense industry. Comparable spending benchmarks would involve analyzing other large, long-term contracts for UAS program management and sustainment, which are often awarded to prime defense contractors with established expertise.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded sole-source to Northrop Grumman. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The impact on the small business ecosystem is likely minimal for this particular contract, as the primary awardee is a large prime contractor.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms and performance standards. Accountability measures are embedded in the contract's performance requirements and payment schedules. Transparency is limited due to the sole-source nature of the award, with public disclosure focused on the award itself rather than detailed negotiation processes.
Related Government Programs
- Global Hawk Unmanned Aerial System Program
- Naval Air Systems Command (NAVAIR) Contracts
- Defense Contract Management Agency (DCMA) Oversight
- Aircraft Management and Support Services
- Unmanned Aerial Vehicle (UAV) Procurement and Sustainment
Risk Flags
- Sole-source award
- Lack of competitive benchmarking
- Long contract duration
Tags
defense, department-of-defense, naval-air-systems-command, northrop-grumman-systems-corporation, unmanned-aerial-vehicle, global-hawk, aircraft-manufacturing, cost-plus-fixed-fee, sole-source, california, definitive-contract, program-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $81.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. TAS::97 0100::TAS 200511!386943!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0057 !A!N! !N! ! !20050831!20051130!186618869!186618869!016435559!N!NORTHROP GRUMMAN CORPORATION !17066 GOLDENTOP RD !SAN DIEGO !CA!92150!60650!037!24!PATUXENT RIVER NAS !ST. MARY S !MARYLAND !+000003622729!N!N!000003622729!AC16!RDTE/AIRCRAFT-MANAGEMENT SUPPORT !A1A!AIRFRAMES AND SPARES !252 !GLOBAL HAWK !336411!E
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 $81.4 million.
What is the period of performance?
Start: 2005-08-31. End: 2013-06-30.
What is the specific nature of the 'aircraft management support' provided under this contract?
The 'aircraft management support' under this contract likely encompasses a range of services critical to the operation and sustainment of the Global Hawk Unmanned Aerial System (UAS). This could include program management, logistics support, maintenance planning, technical data management, engineering support for modifications or upgrades, and potentially training support. Given the Global Hawk's role in intelligence, surveillance, and reconnaissance (ISR), the management support ensures the platform remains operational, effective, and technologically relevant throughout its lifecycle. The contract's duration of over eight years suggests a comprehensive, long-term approach to managing this complex defense asset.
How does the sole-source nature of this award impact the potential for cost savings compared to a competitive bid?
A sole-source award, by definition, bypasses the competitive bidding process. In a competitive environment, multiple companies vie for a contract, driving down prices through negotiation and offering innovative solutions to win the business. Without this competition, the government negotiates directly with a single contractor, in this case, Northrop Grumman. While the government aims to secure fair and reasonable pricing, the absence of competing proposals means there is no direct market pressure to achieve the lowest possible cost. Consequently, sole-source contracts often carry a higher risk of being more expensive than if the contract had been competed, as the contractor may have less incentive to offer the most aggressive pricing.
What are the key performance indicators (KPIs) likely used to assess Northrop Grumman's performance on this contract?
Key performance indicators for this contract would likely focus on ensuring the operational readiness and effectiveness of the Global Hawk UAS. These could include metrics such as aircraft availability rates, mission success rates (e.g., successful data collection and delivery), turnaround time for maintenance and repairs, adherence to delivery schedules for any required upgrades or modifications, and compliance with technical specifications and quality standards. Cost control and efficient resource utilization would also be critical KPIs, especially given the contract type. Performance would be monitored by the Defense Contract Management Agency (DCMA) to ensure the Navy receives the full value and capability outlined in the agreement.
What is Northrop Grumman's track record with the Global Hawk program prior to and following this contract?
Northrop Grumman has been the prime contractor for the Global Hawk program since its inception. They were responsible for the design, development, and production of the aircraft. This contract, awarded in 2005, falls within the period of the Global Hawk's operational deployment and sustainment. Northrop Grumman's long-standing relationship with the Global Hawk program indicates a deep understanding of its systems and operational requirements. Following this contract, the company has continued to be involved in upgrades, modifications, and sustainment efforts for various Global Hawk variants, solidifying their position as the incumbent and expert provider for this critical unmanned aerial system.
Are there any publicly available benchmarks for aircraft management support services that could be used to evaluate the value of this contract?
Publicly available benchmarks for highly specialized defense contracts like aircraft management support for advanced unmanned systems are scarce. Unlike commercial services, defense contracts often involve proprietary technologies, unique operational requirements, and classified aspects that limit direct comparison. While general industry data on aerospace MRO (Maintenance, Repair, and Overhaul) or program management might exist, they may not accurately reflect the specific complexities and scale of the Global Hawk program. The sole-source nature of this award further complicates benchmarking, as there isn't a readily available set of competitive bids to compare against. Therefore, evaluating the value typically relies on internal government cost analyses, historical data from similar sole-source awards, and expert judgment.
What is the historical spending trend for aircraft management support within the Naval Air Systems Command (NAVAIR)?
Historical spending trends for aircraft management support within NAVAIR are substantial, reflecting the Navy's extensive fleet of aircraft, both manned and unmanned. While specific figures for 'aircraft management support' as a distinct category can vary based on how it's classified in budget documents, overall spending on aviation programs, including procurement, RDT&E (Research, Development, Test, and Evaluation), and sustainment, runs into the tens of billions of dollars annually. Contracts like the one awarded to Northrop Grumman for the Global Hawk represent a significant portion of this spending, particularly for high-value, long-duration programs. Analyzing NAVAIR's budget over time would show consistent, high-level investment in maintaining and modernizing its aviation assets, with specific allocations for management and support services.
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
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 17066 GOLDENTOP RD, SAN DIEGO, CA, 92150
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2005-08-31
Current End Date: 2013-06-30
Potential End Date: 2013-06-30 00:00:00
Last Modified: 2023-07-30
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