DoD awards Northrop Grumman $45.9M for ASE B-KITS, raising concerns over limited competition
Contract Overview
Contract Amount: $45,923,873 ($45.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2019-12-20
End Date: 2024-07-31
Contract Duration: 1,685 days
Daily Burn Rate: $27.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ASE B-KITS
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $45.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: ASE B-KITS Key points: 1. Significant contract value of $45.9M awarded to a single large business. 2. Lack of competition raises questions about price reasonableness and potential overspending. 3. Contract duration of over 4 years suggests long-term reliance on this supplier. 4. Sector context is aircraft parts manufacturing, a critical defense component.
Value Assessment
Rating: questionable
The contract value of $45.9M for ASE B-KITS appears high given the lack of competitive bidding. Without a benchmark from competing offers, it's difficult to assess if the pricing is fair and reasonable compared to similar procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a limited source procurement. This approach may limit price discovery and potentially lead to higher costs for taxpayers compared to a fully open competition.
Taxpayer Impact: The lack of competition could result in taxpayers paying more than necessary for these aircraft parts.
Public Impact
Taxpayers may be overpaying for essential aircraft components due to a non-competitive award. The Department of Defense's reliance on a single supplier for critical parts could pose supply chain risks. Limited transparency in the procurement process hinders public understanding of defense spending efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Long contract duration
- No small business participation
Positive Signals
- Definitive contract awarded
- Firm fixed price contract type
Sector Analysis
The Department of the Navy's procurement falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining military aviation readiness, but competitive practices are vital to ensure cost-effectiveness.
Small Business Impact
This contract was awarded to a large business and did not involve small business participation. Opportunities for small businesses in the defense supply chain are missed with this type of sole-source or limited-competition award.
Oversight & Accountability
The non-competitive nature of this award warrants closer oversight to ensure the price paid is justified and that future procurements explore competitive options to maximize value for the government.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for overpricing
- No small business participation
- Long contract duration without clear justification for non-competition
- Limited transparency in procurement decision
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. ASE B-KITS
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 $45.9 million.
What is the period of performance?
Start: 2019-12-20. End: 2024-07-31.
What is the justification for not competing this contract, and what steps are being taken to ensure fair pricing?
The justification for not competing this contract is not provided in the data. However, the lack of competition raises significant concerns about price reasonableness. The Department of Defense should conduct a thorough price analysis and explore competitive strategies for future procurements to ensure taxpayer funds are used efficiently and effectively.
What are the potential risks associated with awarding a long-term contract for aircraft parts without competition?
Awarding a long-term contract without competition poses several risks. It can lead to inflated prices due to the absence of market pressure, stifle innovation from potential new suppliers, and create a dependency on a single vendor, which could be problematic if that vendor faces production issues or goes out of business. This also limits the government's ability to benefit from technological advancements or cost reductions offered by competitors.
How does this non-competitive award impact the overall effectiveness of defense spending in this sector?
This non-competitive award potentially reduces the overall effectiveness of defense spending. By not leveraging competition, the Department of Defense may be paying a premium for these parts, diverting funds that could be used for other critical needs or investments. It also misses opportunities to foster a more robust and innovative industrial base through broader supplier engagement.
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: N0001920N2250
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $45,923,873
Exercised Options: $45,923,873
Current Obligation: $45,923,873
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $2,608,363
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-12-20
Current End Date: 2024-07-31
Potential End Date: 2024-07-31 00:00:00
Last Modified: 2024-11-22
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