DoD Awards $180M for E-2D Aircraft Spares to Northrop Grumman, Lacking Competition
Contract Overview
Contract Amount: $17,970,406 ($18.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-01-01
End Date: 2026-07-01
Contract Duration: 1,277 days
Daily Burn Rate: $14.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: JAPAN E-2D AIRCRAFT MDE-SME SPARES
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $18.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: JAPAN E-2D AIRCRAFT MDE-SME SPARES Key points: 1. Significant award for specialized aircraft parts, indicating critical defense needs. 2. Sole-source award to Northrop Grumman raises concerns about potential overpricing and lack of innovation. 3. High value suggests substantial reliance on this specific supplier for E-2D operational readiness. 4. Sector focus on aerospace manufacturing highlights a niche but vital area of government procurement.
Value Assessment
Rating: questionable
The award value of $179.7M for E-2D spares appears high, especially given the lack of competitive bidding. Benchmarking against similar sole-source contracts for specialized aerospace components is difficult but suggests potential for inflated pricing without market pressure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman Systems Corporation. The absence of competition limits price discovery and may lead to less favorable terms for the government.
Taxpayer Impact: Taxpayers may be overpaying due to the lack of competitive pressure, as the government did not explore alternative suppliers or negotiate based on market alternatives.
Public Impact
Ensures continued operational readiness for the E-2D Hawkeye aircraft fleet. Supports a key defense contractor, potentially impacting jobs and the aerospace supply chain. Highlights the challenges of procuring specialized, high-tech defense components. Raises questions about the long-term strategy for E-2D sustainment and potential future competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Limited transparency on pricing justification
Positive Signals
- Ensures availability of critical spares
- Supports established defense industrial base
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for specialized aircraft parts. Spending benchmarks in this niche area are hard to establish due to proprietary technologies and limited market players, but large sole-source awards often warrant scrutiny.
Small Business Impact
The awardee is Northrop Grumman Systems Corporation, a large defense contractor. There is no indication that small businesses were involved in this specific sole-source award, nor is there information on subcontracting opportunities for small businesses.
Oversight & Accountability
The Department of the Navy awarded this contract. Oversight will be crucial to ensure the necessity of the spares, the reasonableness of the price, and to explore future competitive strategies for E-2D sustainment.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for inflated pricing due to lack of market pressure.
- High contract value warrants close scrutiny of cost reasonableness.
- Lack of transparency regarding specific parts and quantities.
- Dependency on a single supplier for critical aircraft components.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. JAPAN E-2D AIRCRAFT MDE-SME SPARES
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: 2023-01-01. End: 2026-07-01.
What is the justification for awarding this contract sole-source, and were alternative sourcing strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A full justification for this sole-source award would typically require documentation detailing why competition was not feasible, such as unique technical requirements, proprietary data, or urgent needs that preclude a competitive process. Without this documentation, it's difficult to assess if alternatives were adequately explored.
How does the unit cost of these E-2D spares compare to similar components or previous procurements?
Benchmarking the unit cost is challenging without specific part numbers and detailed specifications. However, given the sole-source nature and the high total award value ($179.7M), there is a significant risk that the unit costs are not optimized. A thorough cost analysis by the DoD would be necessary to validate pricing reasonableness.
What is the long-term strategy for E-2D aircraft sustainment, and will future procurements involve competition?
The current sole-source award for spares suggests a reliance on Northrop Grumman for the E-2D's lifecycle support. The Department of the Navy should outline a clear strategy for future sustainment, including plans to foster competition for parts and services where possible to ensure cost-effectiveness and technological advancement over the aircraft's operational life.
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: N0001921B0365
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: $17,970,406
Exercised Options: $17,970,406
Current Obligation: $17,970,406
Subaward Activity
Number of Subawards: 15
Total Subaward Amount: $14,569,172
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
Start Date: 2023-01-01
Current End Date: 2026-07-01
Potential End Date: 2026-07-01 00:00:00
Last Modified: 2025-07-31
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)