Navy awards $18M+ for aircraft maintenance and analysis, with limited competition

Contract Overview

Contract Amount: $18,035,019 ($18.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-05-27

End Date: 2026-06-30

Contract Duration: 1,495 days

Daily Burn Rate: $12.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS MODIFICATION IS TO PROCURE USN MAINTENANCE & RAAF TASK ANALYSES. NAVAIR PID# N00019-20-RFPREQ-PMA-262-0284 PR# 1301005156 PR# 1301005338

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: THE PURPOSE OF THIS MODIFICATION IS TO PROCURE USN MAINTENANCE & RAAF TASK ANALYSES. NAVAIR PID# N00019-20-RFPREQ-PMA-262-0284 PR# 1301005156 PR# 1301005338 Key points: 1. Contract focuses on specialized maintenance and task analyses for U.S. Navy and Royal Australian Air Force aircraft. 2. The award was not competed, raising questions about potential price discovery and value for money. 3. Northrop Grumman Systems Corporation is the sole awardee, suggesting a potential reliance on incumbent capabilities. 4. The contract duration of nearly 5 years indicates a long-term need for these services. 5. The contract type is Cost Plus Fixed Fee, which can shift some risk to the government. 6. The absence of small business set-aside suggests larger prime contractors are expected to perform the work.

Value Assessment

Rating: questionable

Benchmarking the value for this specific contract is challenging due to the limited competition and the specialized nature of the services (USN maintenance & RAAF task analyses). The Cost Plus Fixed Fee (CPFF) contract type, while common for complex services, can lead to higher costs if not managed carefully, as the contractor is reimbursed for all allowable costs plus a fixed fee. Without competitive bids, it's difficult to assess if the fixed fee and overall price represent a fair market value compared to what other providers might offer for similar specialized aircraft maintenance and analysis tasks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when only one source is capable of meeting the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements. The lack of competition means the government did not benefit from a bidding process that could have driven down prices through market forces. This raises concerns about whether the government secured the best possible pricing and terms.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for goods or services. Without competitive pressure, the awarded price may not reflect the most cost-effective option available in the market.

Public Impact

The U.S. Navy benefits from continued maintenance and analytical support for its aircraft fleet, ensuring operational readiness. The Royal Australian Air Force also receives crucial task analyses, supporting its own aviation capabilities. The contract supports specialized technical expertise in aircraft maintenance and analysis. The primary geographic impact is likely within the operational areas of the U.S. Navy and potentially Australia, with work performed by Northrop Grumman's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher costs if not rigorously managed.
Lack of small business participation may limit opportunities for smaller, specialized firms in this niche.

Positive Signals

Awardee (Northrop Grumman) is a major defense contractor with established expertise in aerospace.
Contract addresses critical operational needs for U.S. Navy aviation readiness.
Long-term contract (nearly 5 years) provides stability for essential services.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing (NAICS 336413). This sector is characterized by high technological barriers to entry, significant R&D investment, and a strong reliance on government contracts. Spending in this area is critical for national security and maintaining advanced military capabilities. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of maintenance and task analysis, but overall defense spending on aircraft sustainment runs into billions annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). This suggests that the prime contractor, Northrop Grumman Systems Corporation, is expected to perform the majority of the work. While large prime contractors often utilize small business subcontractors, the absence of a specific set-aside means there's no direct mandate for small business participation at the prime contract level. This could limit direct opportunities for small businesses to secure prime positions on this specific contract, though they may still be involved further down the subcontracting chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and potentially the Defense Contract Management Agency (DCMA). As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to ensure that costs are allowable, allocable, and reasonable, and that the fixed fee is earned appropriately. Transparency is generally maintained through contract reporting mechanisms, but the sole-source nature limits public visibility into the negotiation process. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance Services
Defense Logistics Support
Aerospace Engineering Services
Naval Aviation Programs
Foreign Military Sales Support

Risk Flags

Sole Source Award
Cost Plus Fixed Fee Contract Type
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. THE PURPOSE OF THIS MODIFICATION IS TO PROCURE USN MAINTENANCE & RAAF TASK ANALYSES. NAVAIR PID# N00019-20-RFPREQ-PMA-262-0284 PR# 1301005156 PR# 1301005338

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 $18.0 million.

What is the period of performance?

Start: 2022-05-27. End: 2026-06-30.

What is Northrop Grumman Systems Corporation's track record with the Department of the Navy for similar aircraft maintenance and analysis contracts?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience supporting naval aviation. They have a long history of providing aircraft maintenance, sustainment, and systems integration for various Navy platforms. While specific details on past contracts for 'USN maintenance & RAAF task analyses' are not provided in this data snippet, the company's broad capabilities in aerospace manufacturing and support suggest a strong existing relationship and technical proficiency with the Department of the Navy. Reviewing historical contract awards and performance evaluations for Northrop Grumman related to naval aviation sustainment would provide a more detailed picture of their past performance and reliability in fulfilling such requirements.

How does the $18 million value compare to similar sole-source contracts for aircraft maintenance and analysis?

Direct comparison of this $18 million sole-source contract to similar awards is challenging without more specific data on the scope of services and the platforms involved. Sole-source awards inherently lack a competitive benchmark, making value assessment difficult. However, the duration of nearly five years suggests a substantial, ongoing requirement. For context, major aircraft sustainment contracts, even when competed, can range from tens of millions to billions of dollars depending on the complexity, number of aircraft, and duration. The $18 million figure for specialized maintenance and analysis over this period might be reasonable if the scope is highly specific and limited to particular aircraft systems or analytical tasks, but the lack of competition prevents a definitive value-for-money assessment against market alternatives.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee contract for aircraft maintenance?

The primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for aircraft maintenance are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved through a competitive bidding process. The government may not be getting the best possible value. Secondly, the CPFF structure reimburses the contractor for allowable costs plus a fixed fee. While this structure is often used for complex or uncertain work where cost estimation is difficult, it can incentivize the contractor to incur higher costs to increase the absolute dollar amount of the fixed fee (if the fee is a percentage of costs) or simply to ensure all costs are covered. Rigorous government oversight is essential to manage these risks, ensuring costs are necessary and reasonable.

What is the expected program effectiveness given the contract's focus on maintenance and task analysis?

The program's effectiveness hinges on the quality and thoroughness of the maintenance and task analyses provided by Northrop Grumman. For the U.S. Navy and the Royal Australian Air Force, effective maintenance ensures aircraft readiness, safety, and longevity, directly impacting operational capabilities. Thorough task analyses can lead to optimized procedures, improved training, and identification of efficiencies in maintenance processes. Given that Northrop Grumman is a major defense contractor with established expertise, the expectation is that the services delivered will meet the required technical standards. However, the sole-source nature and CPFF contract type mean that continuous government monitoring and performance evaluation are critical to ensure the program achieves its intended effectiveness and delivers optimal value.

How does this contract fit into the broader historical spending patterns for naval aviation sustainment?

This $18 million contract represents a specific component within the much larger ecosystem of naval aviation sustainment spending. Historically, the Department of the Navy allocates substantial budgets towards maintaining its vast fleet of aircraft, encompassing everything from depot-level overhauls to component repairs and specialized technical support. Contracts for maintenance, repair, and overhaul (MRO) services, along with associated engineering and analytical tasks, are a consistent part of this spending. While this particular award is for specialized analyses and maintenance, it aligns with the ongoing need to ensure the readiness and operational effectiveness of naval aircraft. Its value is modest compared to large-scale platform sustainment programs but critical for specific operational or analytical requirements.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $18,035,019

Exercised Options: $18,035,019

Current Obligation: $18,035,019

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001920G0005

IDV Type: BOA

Timeline