DoD awards Northrop Grumman $189M for Post IOC Added Capabilities, raising cost concerns
Contract Overview
Contract Amount: $188,906,766 ($188.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2015-04-06
End Date: 2023-03-31
Contract Duration: 2,916 days
Daily Burn Rate: $64.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IGF::OT::IGF POST IOC ADDED CAPABILITIES
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $188.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF POST IOC ADDED CAPABILITIES Key points: 1. High contract value ($189M) for aircraft manufacturing. 2. Sole-source award to Northrop Grumman limits competition. 3. Cost-plus incentive fee structure may incentivize higher spending. 4. Long contract duration (2015-2023) suggests significant program evolution.
Value Assessment
Rating: questionable
The contract's total value is substantial. Without competitive bidding, it's difficult to assess if the pricing is fair or reflects market rates for similar aircraft manufacturing capabilities. The cost-plus incentive fee structure also introduces potential for cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best value.
Taxpayer Impact: The absence of competition for a nearly $189M contract means taxpayers may be paying a premium without assurance of the most cost-effective solution.
Public Impact
Taxpayers may be overpaying due to lack of competition. Potential for cost overruns given the contract type. Long-term commitment to a single contractor for critical capabilities. Limited transparency into the justification for sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus incentive fee
- High contract value
- Long duration
Positive Signals
- Critical defense capability development
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this sector is often characterized by high R&D costs, long development cycles, and significant government oversight due to national security implications.
Small Business Impact
The data indicates this is a large sole-source contract awarded to a major defense contractor, Northrop Grumman. There is no indication of small business participation in this specific award, which is common for large, specialized defense contracts.
Oversight & Accountability
The contract's sole-source nature and cost-plus incentive fee structure warrant close oversight to ensure costs are controlled and the contractor is meeting performance objectives efficiently. Regular audits and performance reviews are crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- High contract value
- Long contract duration
- Limited transparency on justification
Tags
aircraft-manufacturing, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $188.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF POST IOC ADDED CAPABILITIES
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 $188.9 million.
What is the period of performance?
Start: 2015-04-06. End: 2023-03-31.
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, proprietary technology, or urgent national security needs where only one contractor can fulfill the requirement. Without specific documentation, it's difficult to ascertain the precise rationale, but it likely relates to specialized aircraft manufacturing expertise or existing platform integration.
How are cost overruns managed and mitigated under this Cost Plus Incentive Fee (CPIF) contract structure?
CPIF contracts establish target costs and target profits, with adjustments made based on performance against these targets. Mechanisms to mitigate overruns include sharing of savings or overruns between the government and contractor, performance incentives tied to cost control, and stringent oversight to monitor spending and progress.
What is the long-term strategic value of these 'added capabilities' to the Department of Defense?
The long-term strategic value likely lies in enhancing the operational effectiveness, survivability, or mission capabilities of existing or future aircraft platforms. These 'added capabilities' could range from advanced avionics and weapons integration to structural upgrades or electronic warfare systems, directly impacting readiness and combat effectiveness.
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
Solicitation ID: N0001914R0010
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $190,058,923
Exercised Options: $190,058,923
Current Obligation: $188,906,766
Actual Outlays: $1,484,550
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $446,566
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-04-06
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 00:00:00
Last Modified: 2024-09-19
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