DoD's $74.7M Aerial Refueling Retrofit Contract Awarded to Northrop Grumman Without Competition
Contract Overview
Contract Amount: $74,688,510 ($74.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2018-05-02
End Date: 2022-09-30
Contract Duration: 1,612 days
Daily Burn Rate: $46.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AERIAL REFUELING (AR) RETROFIT KITS AND RELATED SUPPORT EQUIPMENT
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $74.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AERIAL REFUELING (AR) RETROFIT KITS AND RELATED SUPPORT EQUIPMENT Key points: 1. Significant contract value awarded to a single large business. 2. Lack of competition raises concerns about price discovery and potential overspending. 3. Sole-source award for specialized aircraft parts manufacturing. 4. Contract duration spans over four years, indicating a long-term need.
Value Assessment
Rating: questionable
The contract's value of $74.7 million is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar retrofit kits and support equipment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman Systems Corporation. This limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition for a $74.7 million contract means taxpayers may not be receiving the best possible value, potentially leading to increased costs.
Public Impact
Military readiness and operational efficiency could be impacted by the availability and cost of these retrofit kits. Taxpayer funds are being allocated to a significant defense contract without competitive pressure. The long-term implications for the aerial refueling fleet's modernization and sustainment are tied to this sole-source provider.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- No small business participation
Positive Signals
- Supports critical military aviation capability
- Long-term contract provides stability
Sector Analysis
The Department of Defense frequently procures specialized aircraft parts and manufacturing services. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, with a significant value that is not unusual for defense-related aviation components.
Small Business Impact
This contract was awarded to a large business and did not involve any small business participation. This represents a missed opportunity to support small businesses within the defense supply chain.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and effective use of funds. Further oversight may be needed to understand the justification for not competing the requirement.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competition
- No small business participation
- High contract value
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $74.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AERIAL REFUELING (AR) RETROFIT KITS AND RELATED SUPPORT EQUIPMENT
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 $74.7 million.
What is the period of performance?
Start: 2018-05-02. End: 2022-09-30.
What is the justification for awarding this significant contract solely to Northrop Grumman without competition?
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 detailed documentation, it's difficult to ascertain the specific reasons. However, the absence of competition raises concerns about whether alternative solutions or providers were adequately explored, potentially impacting the government's ability to secure the best value.
How does the lack of competition impact the risk of cost overruns or inefficient spending on these retrofit kits?
A lack of competition significantly increases the risk of cost overruns and inefficient spending. Without competing bids, the contractor faces less pressure to offer competitive pricing or optimize costs. The government relies heavily on the contractor's proposed pricing, making it harder to identify and challenge inflated costs. This can lead to taxpayers bearing a higher burden for the same goods or services compared to a competitive procurement.
What is the potential impact on the effectiveness of the aerial refueling fleet if these retrofit kits are not procured at the best possible value?
If the retrofit kits are not procured at the best possible value due to a sole-source award, it could indirectly impact the effectiveness of the aerial refueling fleet. While the kits themselves may be technically sound, the financial resources allocated could be suboptimal. This might mean fewer kits are purchased than needed, or that funds diverted to potentially higher-than-necessary costs could have been used for other critical upgrades or operational needs, ultimately affecting fleet modernization and readiness.
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
Solicitation ID: N0001914R0023
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
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: $74,688,510
Exercised Options: $74,688,510
Current Obligation: $74,688,510
Actual Outlays: $11,584,956
Subaward Activity
Number of Subawards: 697
Total Subaward Amount: $158,742,578
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001915G0026
IDV Type: BOA
Timeline
Start Date: 2018-05-02
Current End Date: 2022-09-30
Potential End Date: 2022-09-30 00:00:00
Last Modified: 2022-09-07
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