DoD awards Northrop Grumman $49.1M for Aircraft Kits, raising concerns about competition and taxpayer value
Contract Overview
Contract Amount: $49,103,543 ($49.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2016-12-21
End Date: 2023-05-31
Contract Duration: 2,352 days
Daily Burn Rate: $20.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MR-TCDL A-KITS, SPARES, AND MAST A&B KITS AND INSTALL
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92123
Plain-Language Summary
Department of Defense obligated $49.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MR-TCDL A-KITS, SPARES, AND MAST A&B KITS AND INSTALL Key points: 1. Significant contract value of $49.1M awarded to a single large business. 2. Lack of competition raises questions about price discovery and potential overpayment. 3. Contract duration of 2352 days suggests long-term reliance and potential for cost escalation. 4. The 'Other Aircraft Parts' sector is broad, making direct benchmarking difficult without more detail.
Value Assessment
Rating: questionable
The contract's value of $49.1M over 2352 days, awarded without competition, makes a direct pricing assessment difficult. Without comparable contracts or a competitive bidding process, it's hard to determine if the price is fair or inflated.
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 potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition on this $49.1M contract means taxpayers may be paying a premium, as the government did not leverage market forces to secure the best possible price.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Limited transparency into the pricing structure of aircraft parts and installation. Potential for cost overruns over the long contract duration. Reliance on a single contractor for critical aircraft components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
- No small business participation
Positive Signals
- Firm Fixed Price contract type
- Definitive contract award
Sector Analysis
This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area can vary widely based on specific aircraft types and technological complexity. Benchmarking is challenging without more granular data on the specific kits and services provided.
Small Business Impact
The contract data indicates no small business participation (ss: false, sb: false). This suggests that opportunities for small businesses were either not sought or not feasible for this specific procurement, potentially limiting broader economic impact.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is delivering value and that costs are reasonable. Future procurements should explore competitive strategies to enhance accountability and taxpayer savings.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition
- Potential for inflated pricing
- Long contract duration increases risk
- No small business participation
- Lack of transparency on specific aircraft systems
- Limited oversight indicated
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $49.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MR-TCDL A-KITS, SPARES, AND MAST A&B KITS AND INSTALL
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 $49.1 million.
What is the period of performance?
Start: 2016-12-21. End: 2023-05-31.
What specific aircraft systems do these MR-TCDL A-KITS, SPARES, AND MAST A&B KITS support, and what is the justification for a sole-source award?
The specific aircraft systems supported by the MR-TCDL A-KITS, SPARES, AND MAST A&B KITS are not detailed in the provided data. A sole-source award typically requires a justification based on factors like unique capabilities, urgent need, or lack of viable alternatives. Without this justification, it's difficult to assess the necessity of bypassing competition.
Given the $49.1M value and 2352-day duration, what are the primary risks associated with this sole-source contract for the Department of the Navy?
The primary risks include potential cost overruns due to the lack of competitive pressure, reduced innovation from the sole-source provider, and a lack of flexibility if requirements change. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future. The absence of small business involvement also represents a missed opportunity for economic development.
How effectively does this contract ensure the Department of the Navy receives the best value for its investment in aircraft kits and spares?
The effectiveness in ensuring best value is questionable due to the sole-source nature. While a Firm Fixed Price contract provides some cost certainty, the absence of competition means the Navy may not be benefiting from the lowest possible price or the most innovative solutions available in the market. Oversight is crucial to mitigate these risks.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
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
Address: 15120 INNOVATION DR, SAN DIEGO, CA, 92128
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $53,703,675
Exercised Options: $49,350,017
Current Obligation: $49,103,543
Actual Outlays: $5,995,267
Subaward Activity
Number of Subawards: 415
Total Subaward Amount: $243,190,207
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-12-21
Current End Date: 2023-05-31
Potential End Date: 2024-05-26 00:00:00
Last Modified: 2024-08-27
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