DoD's $76.4M contract for aircraft parts to Northrop Grumman raises questions about competition and value

Contract Overview

Contract Amount: $76,423,890 ($76.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2010-05-04

End Date: 2014-01-31

Contract Duration: 1,368 days

Daily Burn Rate: $55.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CENTER BARREL, USN (FY10)

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $76.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: CENTER BARREL, USN (FY10) Key points: 1. The contract value of $76.4 million is significant, warranting scrutiny. 2. Lack of competition suggests potential for overpayment and reduced innovation. 3. The firm fixed-price contract type offers some cost control, but the absence of competition is a major risk. 4. Spending in the 'Other Aircraft Parts' manufacturing sector can vary widely; benchmarks are needed.

Value Assessment

Rating: questionable

The $76.4 million contract value is substantial. Without competitive bidding, it's difficult to assess if this price is fair compared to market rates for similar aircraft parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The lack of competition likely results in a higher price than a competed contract, directly impacting taxpayer funds negatively.

Public Impact

Taxpayers may be overpaying for essential aircraft parts due to the absence of competitive bidding. The long contract duration (over 3 years) means sustained potential overpayment. Lack of transparency in the procurement process erodes public trust in defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value
Long contract duration

Positive Signals

Firm fixed-price contract type

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is critical for military readiness but can be prone to inflated costs without competitive pressure.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract, suggesting a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award raises concerns about the effectiveness of oversight in ensuring competitive practices and fair pricing within the Department of Defense.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for overpricing
Limited transparency
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. CENTER BARREL, USN (FY10)

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 $76.4 million.

What is the period of performance?

Start: 2010-05-04. End: 2014-01-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available sources. Without specific documentation, it's impossible to determine the exact reason, but it's crucial for accountability to understand why competition was bypassed for a contract of this magnitude.

How does the $76.4 million price compare to industry benchmarks for similar aircraft parts, considering the lack of competition?

Without competitive bids, a direct comparison to industry benchmarks is challenging. However, sole-source contracts are inherently at higher risk of being overpriced. A thorough market analysis and benchmarking study would be necessary to assess the fairness of the price paid to Northrop Grumman.

What measures are in place to ensure the quality and necessity of the 'Other Aircraft Parts' being procured under this contract?

Quality assurance is typically managed through contract clauses and oversight by agencies like the Defense Contract Management Agency. However, the lack of competition doesn't inherently affect quality assurance, but it does raise questions about the overall value and necessity if the price is inflated.

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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $76,462,399

Exercised Options: $76,462,399

Current Obligation: $76,423,890

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline