DoD awards $91.3M for long lead parts supporting DSSC4 retrofit kits to Northrop Grumman

Contract Overview

Contract Amount: $91,316,678 ($91.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-05-26

End Date: 2027-12-18

Contract Duration: 2,032 days

Daily Burn Rate: $44.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LONG LEAD PARTS SUPPORTING THE DSSC4 RETROFIT KITS

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $91.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LONG LEAD PARTS SUPPORTING THE DSSC4 RETROFIT KITS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of the contract (over 5 years) suggests a long-term need for these specialized parts. 3. The contract is for long lead parts, indicating potential supply chain complexities or specialized manufacturing processes. 4. The award is a delivery order under a larger contract, details of which are not provided. 5. The North American Industry Classification System (NAICS) code 336413 points to a niche manufacturing sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without knowing the specific components and their market prices. The contract's value of $91.3 million over approximately five years suggests a substantial investment. However, the lack of competition raises concerns about whether the government secured the best possible price. Without comparable sole-source awards or detailed cost breakdowns, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when only one source is capable of meeting the government's needs. The lack of competition means that the government did not benefit from a competitive bidding process, which could have led to lower prices or more innovative solutions.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The government's ability to negotiate favorable terms is reduced in a sole-source scenario.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other branches of the Department of Defense utilizing the DSSC4 retrofit kits. The services delivered involve the provision of long lead parts essential for the retrofitting of unspecified military platforms. The geographic impact is primarily linked to Florida, where the contractor is located, and potentially to the operational bases where the retrofits will occur. Workforce implications include employment at Northrop Grumman and its supply chain partners involved in the manufacturing of these specialized parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially value for taxpayer dollars.
Lack of transparency regarding the specific components and their necessity for the retrofit.
Long contract duration could mask inefficiencies if not closely monitored.
Reliance on a single contractor for critical long lead parts may pose supply chain risks.

Positive Signals

Awarding to an established contractor like Northrop Grumman suggests a level of trust in their capability to deliver specialized parts.
The contract addresses a specific need for retrofit kits, indicating efforts to modernize or maintain existing military assets.
The long lead time acknowledgment suggests proactive planning for complex manufacturing processes.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically related to aircraft parts and auxiliary equipment. The market for such specialized components is often characterized by high barriers to entry due to technological expertise, stringent quality requirements, and long development cycles. Northrop Grumman is a major player in this industry. Comparable spending benchmarks are difficult to establish without more specific details on the parts, but defense manufacturing contracts of this magnitude are common within the sector.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor is Northrop Grumman, a large aerospace and defense company. There is no explicit information provided regarding subcontracting plans to small businesses. Without such details, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the delivery of specified parts according to the contract's terms and schedule. Transparency is limited due to the sole-source nature and the delivery order format, which may obscure details of the parent contract. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DSSC4 Retrofit Program
Naval Aviation Sustainment Programs
Aerospace Component Manufacturing
Long Lead Time Material Procurement

Risk Flags

Sole-source award lacks competition
Potential for cost overruns due to lack of competitive pricing
Long lead time parts may indicate supply chain vulnerabilities
Contract duration extends over multiple fiscal years

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LONG LEAD PARTS SUPPORTING THE DSSC4 RETROFIT 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 $91.3 million.

What is the period of performance?

Start: 2022-05-26. End: 2027-12-18.

What is the specific nature of the DSSC4 retrofit kits and why are these long lead parts critical?

The specific nature of the DSSC4 retrofit kits and the exact components designated as 'long lead parts' are not detailed in the provided data. Generally, 'long lead parts' refer to components that require extended manufacturing or procurement lead times, often due to complex production processes, specialized materials, or limited supplier availability. In the context of military retrofit kits, these parts are likely critical for upgrading existing aircraft or systems to meet new operational requirements, enhance capabilities, or extend service life. The criticality stems from the fact that the entire retrofit project's timeline is dependent on the timely availability of these long lead items. Without them, the modernization or sustainment effort could be significantly delayed.

What is Northrop Grumman's track record with similar DoD contracts, particularly sole-source awards?

Northrop Grumman Systems Corporation has an extensive track record of performing complex defense contracts for the Department of Defense across various platforms and systems. They are a major defense contractor with significant experience in aircraft manufacturing, electronics, and integrated systems. While specific data on their sole-source award history for 'long lead parts' is not provided here, it is common for large, specialized defense work to be awarded on a sole-source basis to incumbents or companies with unique capabilities. Their history generally indicates a capacity to deliver on large, technically demanding programs, though like any major contractor, they have faced scrutiny on specific contract performance and pricing in the past. A deeper dive into their contract history database would reveal more granular details on past sole-source awards and performance metrics.

How does the $91.3 million contract value compare to other DoD procurements for aircraft parts or retrofit kits?

The $91.3 million contract value for long lead parts over approximately five years is a substantial sum, reflecting the specialized nature and potential scale of the DSSC4 retrofit kits. To benchmark this effectively, one would need to compare it against similar procurements for aircraft modernization components or specialized parts within the DoD. For instance, major airframe manufacturers or system integrators often receive multi-million dollar contracts for specific upgrade packages. However, without knowing the exact type and quantity of parts, direct comparison is difficult. The value is significant enough to warrant close attention to ensure cost-effectiveness, especially given the sole-source nature of this award. It falls within the typical range for significant sub-system procurements in the defense aerospace sector.

What are the potential risks associated with a sole-source award for critical long lead parts?

The primary risk associated with a sole-source award for critical long lead parts is the potential for inflated pricing due to the lack of competitive bidding. The government loses the leverage that competition provides to drive down costs and ensure the best value. Another risk is vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and negotiation power. There's also a risk that without competitive pressure, the supplier might be less incentivized to innovate or improve efficiency. Furthermore, if the sole-source supplier faces production issues or financial instability, it could significantly disrupt the entire retrofit program due to the critical nature of these long lead parts.

What is the historical spending pattern for similar aircraft parts or retrofit support under the Department of the Navy?

Historical spending patterns for similar aircraft parts or retrofit support under the Department of the Navy are typically substantial, given the size and complexity of naval aviation assets. The Navy consistently invests billions annually in aircraft procurement, sustainment, and modernization. Contracts for specialized components, long lead time materials, and system upgrades are a significant portion of this spending. While the specific 'DSSC4 retrofit kits' may represent a particular program, the overall category of aircraft parts and modification support sees continuous, high-value contract awards. Analyzing past Navy budgets and contract databases would reveal trends in spending on avionics, structural components, engine parts, and integrated systems for various aircraft types, often involving multi-year, high-value awards, including those that are sole-sourced due to unique requirements.

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: $91,553,052

Exercised Options: $91,553,052

Current Obligation: $91,316,678

Subaward Activity

Number of Subawards: 67

Total Subaward Amount: $260,841,394

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