DoD Awards Northrop Grumman $60.9M for RAAF B-Kits and LBDRs, Lacking Competition
Contract Overview
Contract Amount: $60,935,871 ($60.9M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-03-29
End Date: 2027-08-31
Contract Duration: 1,250 days
Daily Burn Rate: $48.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: WRA-7/8 B-KITS AND LBDRS FOR RAAF
Place of Performance
Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $60.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: WRA-7/8 B-KITS AND LBDRS FOR RAAF Key points: 1. Significant award to a single large contractor for specialized aircraft components. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Contract duration extends over three years, indicating a long-term need. 4. Focus on aircraft parts suggests a critical role in aviation readiness.
Value Assessment
Rating: questionable
The contract value of $60.9M for 1,250 units (estimated) results in a per-unit cost of approximately $48,750. Without competitive bids, it's difficult to assess if this price is optimal compared to market alternatives or similar government contracts.
Cost Per Unit: $48,750
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price discovery and may prevent the government from securing the best possible price or innovative solutions from a wider range of vendors.
Taxpayer Impact: The lack of competition could lead to higher costs for taxpayers, as there was no market pressure to drive down the price.
Public Impact
Ensures continued operational readiness for the Royal Australian Air Force (RAAF) aircraft. Supports critical components for advanced aircraft systems. Potential for limited visibility into the true cost-effectiveness of the components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High per-unit cost
- Long contract duration
Positive Signals
- Supports allied military readiness
- Specific, critical aircraft components
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining aging fleets and supporting new aviation technologies, with benchmarks often influenced by technological complexity and R&D investment.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large business. There is no indication that small businesses were involved in this specific sole-source procurement, missing an opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is delivering value and that pricing remains reasonable throughout the contract's life. Future procurements should explore competitive options.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited transparency on cost drivers
- No small business participation noted
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $60.9 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. WRA-7/8 B-KITS AND LBDRS FOR RAAF
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 $60.9 million.
What is the period of performance?
Start: 2024-03-29. End: 2027-08-31.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a strong justification, such as unique capabilities, proprietary technology, or urgent need where only one source can fulfill the requirement. Without further documentation, it's unclear if competitive strategies were explored or deemed infeasible.
How does the per-unit cost of $48,750 compare to similar components or previous acquisitions?
Benchmarking this per-unit cost requires access to historical data for the same or similar components, ideally from competitive procurements. Given this is a sole-source award for specialized kits (B-KITS and LBDRs), direct comparison might be challenging. Further analysis would involve examining the specific technical requirements and market prices for comparable advanced aircraft parts.
What is the long-term strategy for ensuring cost-effectiveness and innovation for these critical aircraft components?
The long-term strategy should involve exploring competitive contracting for future needs to drive down costs and encourage innovation. Additionally, regular performance reviews and cost analysis throughout the current contract's duration are essential to ensure value for money and identify potential areas for improvement or future cost savings.
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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 1580A W NURSERY RD, LINTHICUM HEIGHTS, MD, 21090
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: $60,935,871
Exercised Options: $60,935,871
Current Obligation: $60,935,871
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-03-29
Current End Date: 2027-08-31
Potential End Date: 2027-08-31 00:00:00
Last Modified: 2025-12-19
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