DoD's $25M Fire Scout Sustainment Contract Awarded to Northrop Grumman Faces Scrutiny
Contract Overview
Contract Amount: $24,967,539 ($25.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2015-12-24
End Date: 2021-03-19
Contract Duration: 1,912 days
Daily Burn Rate: $13.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF FY 16 FIRE SCOUT SUSTAINMENT
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $25.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF FY 16 FIRE SCOUT SUSTAINMENT Key points: 1. Significant contract value of $24.97 million for sustainment services. 2. Sole-source award to Northrop Grumman raises questions about competition. 3. Long contract duration (2015-2021) warrants review of ongoing value. 4. Engineering services sector, with potential for high costs. 5. Lack of small business participation noted.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Benchmarking against similar sustainment contracts for complex defense systems is needed to determine if the $24.97 million represents fair value.
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 limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive bidding process.
Taxpayer Impact: The absence of competition may result in inflated costs, impacting taxpayer funds allocated to defense sustainment.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The sustainment of critical defense assets like the Fire Scout drone is essential for national security. Lack of transparency in the sole-source award process can erode public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- No small business participation
Positive Signals
- Essential defense system sustainment
- Long-term contract provides stability
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending in this area is often high due to the complexity and critical nature of the equipment. Benchmarks for similar sustainment contracts are crucial for evaluating cost-effectiveness.
Small Business Impact
The contract data indicates no small business participation. This is a missed opportunity to foster small business growth within the defense contracting ecosystem and could suggest a lack of outreach or specific requirements that excluded smaller entities.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Accountability for cost management and performance throughout the contract's duration is essential.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for overpricing
- Limited small business involvement
- Long contract duration without clear performance benchmarks
- Cost-plus contract type can incentivize higher spending
Tags
engineering-services, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF FY 16 FIRE SCOUT SUSTAINMENT
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 $25.0 million.
What is the period of performance?
Start: 2015-12-24. End: 2021-03-19.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's difficult to ascertain the exact reasons. However, a thorough review should confirm if alternatives were explored and why they were deemed unsuitable, ensuring the government acted in its best interest.
How does the per-unit cost or overall cost of this sustainment contract compare to industry benchmarks for similar unmanned aerial vehicle (UAV) sustainment programs?
A comprehensive cost-benefit analysis is needed to compare this contract's pricing against industry benchmarks for similar UAV sustainment. Factors like system complexity, age, operational tempo, and required support services influence costs. Without access to detailed cost breakdowns and comparable market data, it's challenging to definitively assess if the $24.97 million expenditure represents good value for taxpayer money.
What performance metrics and oversight mechanisms were in place to ensure the effectiveness and efficiency of Northrop Grumman's sustainment services?
Effective oversight requires clearly defined performance metrics (e.g., aircraft availability, response times, repair turnaround) and robust monitoring mechanisms. The contract's cost-plus-fixed-fee structure necessitates stringent oversight to control costs and ensure deliverables meet expectations. A review of performance reports and audit trails would reveal the extent of accountability and the effectiveness of the services provided.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001915R2008
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, 92127
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,165,270
Exercised Options: $26,048,855
Current Obligation: $24,967,539
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-12-24
Current End Date: 2021-03-19
Potential End Date: 2021-03-19 00:00:00
Last Modified: 2022-08-29
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