Northrop Grumman awarded $34.8M for AN/AAR-47 production, a sole-source contract

Contract Overview

Contract Amount: $34,826,717 ($34.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-04-15

End Date: 2027-11-30

Contract Duration: 2,420 days

Daily Burn Rate: $14.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/AAR-47 PRODUCTION

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $34.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AN/AAR-47 PRODUCTION Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long-term contract duration (2021-2027) suggests ongoing need for the product. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. Delivery order under a larger contract indicates a phased procurement approach. 5. The product is critical for aircraft survivability systems. 6. Contractor has a significant presence in defense manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The total award amount of $34.8 million over approximately six years suggests a significant investment in this specific aircraft part. Without comparable contracts or market data for the AN/AAR-47 system, it's difficult to definitively assess if the pricing is optimal. However, the firm fixed-price nature of the contract provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific product or service is only available from a single source, or when there are compelling reasons to award to a particular contractor. The lack of competition means that the government did not benefit from the price discovery that typically occurs in a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This necessitates strong internal oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other branches of the Department of Defense that utilize the AN/AAR-47 system. The contract ensures the continued production and supply of critical aircraft warning and countermeasure systems, enhancing platform survivability. The geographic impact is primarily centered around Northrop Grumman's facilities in California, where the production is likely to occur. Workforce implications include the maintenance of skilled manufacturing jobs within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing advantages for the government.
Long contract duration without clear performance metrics in the provided data raises questions about ongoing value.
Lack of detailed cost breakdown makes it difficult to assess reasonableness of price.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Award to an established defense contractor like Northrop Grumman suggests a level of reliability and expertise.
The product is a critical component for aircraft survivability, indicating a high-priority need.

Sector Analysis

The AN/AAR-47 system falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. This sector is characterized by high technological sophistication, stringent quality requirements, and significant government procurement. Northrop Grumman is a major player in this industry, with extensive experience in producing advanced defense systems. Comparable spending benchmarks would involve other sole-source or competitively awarded contracts for similar electronic warfare or aircraft survivability equipment, which are often high-value procurements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Northrop Grumman is a large defense contractor, and while they may utilize small businesses in their supply chain, there is no direct indication of subcontracting goals for small businesses tied to this specific award. The lack of a set-aside means that opportunities for small businesses to directly bid on this prime contract were not prioritized.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny on pricing and justification for the non-competitive nature would be heightened. Transparency is limited by the sole-source nature, but contract modifications and performance reports would be subject to internal review. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Survivability Equipment
Electronic Warfare Systems
Defense Production Contracts
Northrop Grumman Defense Contracts
Navy Aircraft Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Long-term contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AN/AAR-47 PRODUCTION

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 $34.8 million.

What is the period of performance?

Start: 2021-04-15. End: 2027-11-30.

What is the historical spending trend for the AN/AAR-47 system with Northrop Grumman?

The provided data indicates a single award of $34,826,717 for AN/AAR-47 production with an end date of November 30, 2027. This suggests a significant, long-term investment in this specific system. To understand historical spending trends, one would need to access historical contract databases to identify any previous awards for the AN/AAR-47 system to Northrop Grumman or other contractors, as well as any modifications or task orders issued under prior contracts. Without this historical context, it's difficult to ascertain if this $34.8 million represents an increase, decrease, or consistent level of spending for this product line over time. Analyzing past spending would also help in identifying potential patterns of cost escalation or efficiency gains.

How does the per-unit cost of the AN/AAR-47 system compare to similar aircraft warning systems?

Determining the per-unit cost for the AN/AAR-47 system is not feasible with the provided data, as it only shows the total contract value and duration, not the number of units to be produced. Furthermore, as this is a sole-source award, direct price comparisons with competing systems are inherently difficult. To benchmark the per-unit cost, one would need access to the specific number of AN/AAR-47 units procured under this contract and compare that to the unit costs of similar systems from other manufacturers, if available through competitive procurements. Such a comparison would require detailed technical specifications and pricing data for alternative systems, which are not present in this dataset. The lack of competitive bidding significantly hinders a robust value-for-money assessment based on unit cost.

What are the specific risks associated with a sole-source award for critical aircraft components?

Sole-source awards for critical aircraft components like the AN/AAR-47 system present several risks. The primary risk is the potential for inflated pricing due to the absence of competitive pressure, which can lead to reduced value for taxpayer money. There's also a risk of complacency from the sole provider, potentially impacting innovation or responsiveness to evolving threats or technological advancements. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the contractor experiences production issues, financial instability, or geopolitical disruptions, the availability of these critical components could be jeopardized, impacting national security. The government also loses the opportunity to foster a broader industrial base and explore alternative, potentially more cost-effective solutions.

What is Northrop Grumman's track record with sole-source defense contracts?

Northrop Grumman, as a major defense contractor, has a history of receiving both competitive and sole-source contracts from the U.S. government. Their track record with sole-source awards is extensive, often stemming from the proprietary nature of advanced technologies, the need for commonality across platforms, or situations where only one capable supplier exists. While sole-source awards can be justified for specific reasons, they are subject to intense scrutiny regarding pricing and necessity. Northrop Grumman's performance on such contracts is generally viewed within the context of their overall large-scale defense production capabilities. Evaluating their specific track record would involve analyzing past sole-source awards for similar systems, looking at contract modifications, performance reviews, and any associated cost overruns or disputes.

How does the $34.8M award for AN/AAR-47 production fit into the broader Department of the Navy's spending on aircraft parts?

The $34.8 million award for AN/AAR-47 production represents a specific investment within the Department of the Navy's vast budget for aircraft parts and systems. The AN/AAR-47 is a crucial component for aircraft survivability, indicating its high priority. To contextualize this amount, it would be necessary to compare it against the Navy's total annual spending on aircraft maintenance, repair, and overhaul (MRO), as well as procurement of new aircraft parts. This figure should also be viewed relative to other major aircraft system procurements. For instance, if the Navy spends billions annually on aircraft parts, $34.8 million for a specific, critical system might be considered a moderate allocation. Conversely, if spending on similar survivability systems is significantly lower, this award could represent a substantial investment.

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: 2000 W NASA BLVD, MELBOURNE, FL, 32904

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: $34,826,717

Exercised Options: $34,826,717

Current Obligation: $34,826,717

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,315,627

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001920G0005

IDV Type: BOA

Timeline