Northrop Grumman Systems Corporation awarded $1.00B contract for airframe structural components, with a 2,840-day duration

Contract Overview

Contract Amount: $100,335,970 ($100.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2005-12-21

End Date: 2013-09-30

Contract Duration: 2,840 days

Daily Burn Rate: $35.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200603!156880!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0080 !A!N! !N! ! !20051221!20071130!938535028!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!ONE HORNET WAY !EL SEGUNDO !CA!90245!22412!037!06!EL SEGUNDO !LOS ANGELES !CALIFORNIA!+000005868875!N!N!000066866588!1560!AIRFRAME STRUCTURAL COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!N!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! !Y!1700!N00019!0001! !

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $100.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 200603!156880!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0080 !A!N! !N! ! !20051221!20071130!938535028!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!ONE HORNET WAY !EL SEGUNDO !CA!90245!22412!037!06!EL SEGUNDO !LOS … Key points: 1. Contract awarded for critical airframe structural components, indicating a need for specialized manufacturing capabilities. 2. The extensive contract duration suggests a long-term requirement for these components, potentially for ongoing production or sustainment. 3. The 'NOT COMPETED' status raises questions about the procurement process and potential missed opportunities for cost savings through competition. 4. The contract value of approximately $1.00 billion over nearly 8 years highlights significant investment in aircraft sustainment or production. 5. The specific Product Service Code (PSC) '336413' points to a niche market within aircraft equipment manufacturing. 6. The contractor, Northrop Grumman Systems Corporation, is a major defense contractor, suggesting a strong existing relationship and capability.

Value Assessment

Rating: fair

The contract value of approximately $1.00 billion over 2,840 days averages to roughly $353,300 per day. Without specific per-unit cost data or comparable contract benchmarks for airframe structural components, it is difficult to definitively assess value for money. However, the long duration and sole-source nature may indicate a premium price. Further analysis would require detailed cost breakdowns and comparisons to similar sole-source awards or internally developed costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of competition limits the government's ability to explore alternative solutions or negotiate the best possible price through a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other branches of the Department of Defense requiring advanced airframe structural components. The services delivered include the manufacturing and supply of critical airframe structural components essential for aircraft operation and maintenance. The geographic impact is primarily centered around Northrop Grumman's facilities in California, with potential ripple effects on the local and regional aerospace supply chain. Workforce implications include the employment of skilled engineers, technicians, and manufacturing personnel at Northrop Grumman and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can reduce transparency and accountability in the procurement process.
Long contract duration could mask inefficiencies or price increases over time if not properly managed.
Dependence on a single contractor for critical components poses a supply chain risk.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests a high level of technical capability and reliability.
The long duration indicates a stable, long-term supply of essential components, crucial for fleet readiness.
The contract is for essential airframe structural components, directly supporting national defense objectives.
The firm fixed-price contract type provides cost certainty for the government, assuming the scope remains unchanged.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such specialized components is often dominated by a few large, established defense contractors due to the high barriers to entry, including technological expertise, stringent quality control, and security clearances. Comparable spending benchmarks are difficult to establish without more specific details on the components, but the scale of this award suggests it is a significant contract within this sub-sector.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the sole-source nature and the likely complexity of airframe structural components, it is probable that the prime contractor, Northrop Grumman, will be responsible for fulfilling the contract. Subcontracting opportunities for small businesses may exist within Northrop Grumman's supply chain, but this contract does not appear to directly promote small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the firm fixed-price contract type, which shifts some risk to the contractor. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

F-35 Lightning II Program
F/A-18 Super Hornet Program
Naval Air Systems Command (NAVAIR) Procurement
Defense Production Act Investments
Aerospace Component Manufacturing Contracts

Risk Flags

Sole-source award justification
Potential for cost overruns due to lack of competition
Long contract duration increases risk of price escalation
Supply chain dependency on a single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $100.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 200603!156880!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0080 !A!N! !N! ! !20051221!20071130!938535028!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!ONE HORNET WAY !EL SEGUNDO !CA!90245!22412!037!06!EL SEGUNDO !LOS ANGELES !CALIFORNIA!+000005868875!N!N!000066866588!1560!AIRFRAME STRUCTURAL COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !999

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 $100.3 million.

What is the period of performance?

Start: 2005-12-21. End: 2013-09-30.

What is the specific nature of the 'airframe structural components' being procured under this contract?

The provided data indicates the Product Service Code (PSC) is '336413', which falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. While the exact components are not detailed, this classification suggests parts that are integral to the structural integrity and airworthiness of an aircraft, such as fuselage sections, wing components, tail assemblies, or internal structural supports. These are typically high-specification, precision-engineered parts requiring advanced materials and manufacturing processes. The 'NOT COMPETED' status and the award to Northrop Grumman, a major defense manufacturer, imply these are likely specialized components for specific military aircraft platforms, possibly related to ongoing production or sustainment efforts for existing fleets.

How does the $1.00 billion contract value compare to similar sole-source awards for aircraft components?

Comparing this $1.00 billion sole-source contract to similar awards is challenging without more specific details on the components and the platforms they support. However, large sole-source contracts for critical defense systems are not uncommon, especially when dealing with proprietary technology, unique manufacturing capabilities, or long-term sustainment needs for specific weapon systems. The value suggests these are either high-volume production runs or highly complex, expensive components. To benchmark effectively, one would need to identify contracts for comparable structural components on similar aircraft (e.g., other fighter jets, large transport aircraft) awarded under sole-source or limited competition scenarios, and analyze their total value, duration, and per-unit costs, if available. The absence of competition inherently limits the ability to establish a strong value-for-money comparison.

What are the primary risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of this magnitude and duration include potential cost overruns and reduced innovation. Without competitive pressure, the contractor may have less incentive to control costs rigorously or to seek more efficient manufacturing methods, potentially leading to a higher price for the government than if the contract were competed. The long duration (2,840 days, nearly 8 years) increases the risk of price escalation due to inflation or changes in material costs, unless effectively managed through contract clauses. Furthermore, sole-source awards can create a dependency on a single supplier, posing a supply chain risk if the contractor faces production issues or business disruptions. There's also a risk of 'contractor lock-in,' where the government becomes reliant on the incumbent's specific processes and technology, making future transitions difficult and costly.

What is Northrop Grumman's track record with similar contracts for airframe structural components?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in producing complex aircraft structures and systems for various military platforms. They are a key player in programs like the F-35 and F/A-18, which involve the manufacturing of significant airframe components. Their track record typically includes delivering large, complex systems under demanding specifications. However, specific performance metrics, past issues, or cost performance on prior sole-source contracts for similar components would require a deeper dive into contract performance reports, past performance reviews, and potentially Government Accountability Office (GAO) protest data. Given their established position, it's likely they possess the necessary technical capabilities and infrastructure, but the 'NOT COMPETED' status warrants scrutiny regarding the justification for not seeking alternative sources.

How does this contract's duration and value compare to historical spending patterns for aircraft structural components by the Naval Air Systems Command?

The Naval Air Systems Command (NAVAIR) historically awards numerous contracts for aircraft components, including structural parts. A contract valued at $1.00 billion over nearly 8 years for structural components is substantial, suggesting a significant, long-term requirement. Historical spending patterns would reveal if such large, sole-source awards for components are typical for NAVAIR or if this represents an outlier. Analyzing past NAVAIR procurements for similar PSC codes (like 336413) would show the average contract size, duration, and competition levels. If NAVAIR typically competes such requirements or awards smaller, shorter-term contracts, this specific award might warrant further investigation into the justification for its sole-source, long-duration nature. Without access to NAVAIR's historical contract database, a precise comparison is difficult, but the scale suggests a critical and sustained need.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment 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: ONE HORNET WAY, EL SEGUNDO, CA, 90245

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline