DoD awards $32.4M for E-2D wing panels, with Northrop Grumman as sole source

Contract Overview

Contract Amount: $32,458,804 ($32.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-01

End Date: 2027-07-31

Contract Duration: 1,703 days

Daily Burn Rate: $19.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JAPAN E-2D SPARE WET OUTER WING PANELS

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $32.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JAPAN E-2D SPARE WET OUTER WING PANELS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long-term contract duration (over 5 years) suggests a sustained need for these components. 3. The award is a delivery order under a larger contract, indicating potential for future orders. 4. Focus on spare parts highlights the importance of maintaining operational readiness for the E-2D fleet. 5. The specific nature of the component (outer wing panels) suggests specialized manufacturing requirements. 6. No small business set-aside indicates the primary contractor is likely a large business.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable sole-source awards for E-2D wing panels. The firm-fixed-price structure provides some cost certainty for the government. However, the lack of competition inherently limits the government's ability to secure the lowest possible price. Further analysis would require access to historical pricing data for similar components or internal cost estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Northrop Grumman Systems Corporation. This indicates that the Department of the Navy determined that only Northrop Grumman could provide the required spare wing panels for the E-2D aircraft. The lack of competition means that the government did not solicit bids from multiple suppliers, which can impact price discovery and potentially lead to higher costs.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive bidding, potentially resulting in a higher overall cost for these essential aircraft components.

Public Impact

The primary beneficiaries are the U.S. Navy's E-2D Advanced Hawkeye fleet, ensuring operational readiness. Services delivered include the provision of critical spare parts (wet outer wing panels) for aircraft maintenance. The geographic impact is primarily within Florida, where the contract is being performed. Workforce implications include the potential for continued employment at Northrop Grumman facilities involved in manufacturing or logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in pricing due to no competitive bidding.
Dependence on a single supplier for critical aircraft components poses a supply chain risk.

Positive Signals

Ensures availability of critical spare parts for E-2D fleet, maintaining operational readiness.
Firm-fixed-price contract provides cost predictability.
Long-term contract duration suggests a stable relationship and potential for streamlined future procurement.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components like E-2D wing panels is often dominated by a few key manufacturers due to proprietary technology and stringent quality requirements. Spending in this sub-sector is driven by military aircraft procurement, sustainment, and modernization programs. Comparable spending benchmarks would involve analyzing other sole-source or limited-competition awards for similar high-value, specialized aircraft components.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, Northrop Grumman Systems Corporation, is likely a large business capable of fulfilling the entire requirement. The absence of small business involvement in this specific award means no direct benefit to the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified goods at the agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

E-2D Advanced Hawkeye Aircraft Program
Naval Aviation Sustainment
Aerospace Component Manufacturing
Defense Logistics Agency (DLA) Spare Parts Procurement

Risk Flags

Sole-source award
Potential for higher costs due to lack of competition
Supply chain risk associated with single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JAPAN E-2D SPARE WET OUTER WING PANELS

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 $32.5 million.

What is the period of performance?

Start: 2022-12-01. End: 2027-07-31.

What is the historical spending trend for E-2D spare wing panels with Northrop Grumman?

Analyzing historical spending trends for E-2D spare wing panels with Northrop Grumman requires access to detailed contract databases beyond the provided summary. Typically, such analysis would involve examining all previous delivery orders and contract modifications related to these specific components. Key metrics to track would include the total amount obligated over time, the number of units procured, and any year-over-year changes in unit cost. A significant increase in spending or unit price without a corresponding increase in quantity or technological advancement could indicate potential value concerns or inflationary pressures. Conversely, stable or decreasing unit costs over time, especially for a sole-source item, might suggest efficient production or favorable negotiation terms in earlier awards.

How does the unit cost of these wing panels compare to similar components on other naval aircraft?

Directly comparing the unit cost of these E-2D wet outer wing panels to similar components on other naval aircraft is difficult without specific cost data and detailed specifications for those other components. However, a general assessment can be made based on the complexity and technological sophistication of the E-2D platform. The E-2D is a highly advanced airborne early warning and control aircraft, implying that its components, including structural elements like wing panels, are likely to be complex, require specialized materials, and undergo rigorous testing. Therefore, their unit cost might be expected to be higher than simpler components on less advanced aircraft. A comprehensive comparison would necessitate identifying comparable structural components (e.g., wing sections, fuselage panels) on other naval platforms and obtaining their unit costs, adjusted for factors like material, manufacturing complexity, and age of the platform.

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

The primary risks associated with a sole-source award for critical aircraft components like E-2D wing panels are multifaceted. Firstly, the lack of competition significantly reduces the government's leverage in price negotiations, potentially leading to inflated costs for taxpayers. Secondly, it creates a dependency on a single supplier, which can introduce supply chain vulnerabilities. If the sole-source provider experiences production issues, financial instability, or decides to discontinue the product line, the government may face significant delays or be forced into costly alternative solutions. Thirdly, without competitive pressure, there may be less incentive for the sole-source provider to innovate or improve efficiency. Finally, the absence of competitive benchmarking makes it harder to assess whether the awarded price represents fair market value.

What is the expected performance impact of these spare wing panels on the E-2D fleet's operational readiness?

The provision of spare wet outer wing panels is crucial for maintaining the operational readiness and safety of the E-2D Advanced Hawkeye fleet. These panels are essential structural components, and their availability ensures that damaged or worn-out parts can be replaced promptly. This capability directly supports the E-2D's mission readiness by minimizing aircraft downtime for maintenance and repairs. Having a sufficient stock of these spare parts, procured through contracts like this one, allows the Navy to respond effectively to unexpected damage, perform scheduled maintenance efficiently, and sustain the operational tempo of the E-2D aircraft. Ultimately, this contributes to the overall effectiveness of the E-2D's role in airborne early warning and control.

How does this contract align with the Department of Defense's overall strategy for aircraft sustainment?

This contract aligns with the Department of Defense's (DoD) overall strategy for aircraft sustainment by ensuring the continued availability of critical spare parts for a key operational platform, the E-2D Advanced Hawkeye. DoD strategies emphasize maintaining fleet readiness, extending the service life of aging aircraft, and ensuring the supply chain for essential components remains robust. By awarding this contract for spare wing panels, the Navy is directly addressing the sustainment needs of the E-2D, a vital asset for intelligence, surveillance, and reconnaissance missions. The long-term nature of the contract also suggests a strategic approach to managing the lifecycle support of the aircraft, aiming to prevent readiness gaps caused by parts obsolescence or unavailability.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 00000000BA101

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: $32,458,804

Exercised Options: $32,458,804

Current Obligation: $32,458,804

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $3,921,088

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