DoD awards $25.5M contract for WCS Kit Installation to Northrop Grumman, citing sole-source justification

Contract Overview

Contract Amount: $25,476,681 ($25.5M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-10-31

End Date: 2028-01-31

Contract Duration: 1,553 days

Daily Burn Rate: $16.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: WCS KIT INSTALLATION

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: WCS KIT INSTALLATION Key points: 1. Contract awarded on a sole-source basis, limiting potential for competitive pricing. 2. Significant contract value for aircraft parts manufacturing, indicating a critical need. 3. Long performance period of over 4 years suggests a sustained requirement. 4. Fixed-price contract type aims to control costs, but sole-source nature raises concerns. 5. Geographic focus on Florida for installation services. 6. No small business set-aside, potentially impacting smaller firms' participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $25.5 million contract is challenging due to its sole-source nature and specific application to WCS Kit Installation. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. Comparisons to similar, competitively awarded contracts for specialized aircraft component installation would be necessary for a more robust assessment. The fixed-price structure provides some cost certainty, but the lack of competition prevents a definitive value-for-money judgment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. The specific reasons for this sole-source award are not detailed in the provided data but typically involve unique capabilities, proprietary technology, or urgent requirements where only one source can meet the need. The absence of competition means there was no price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the lack of competitive pressure. Without multiple bids, the government cannot be assured it received the best possible price for the WCS Kit Installation services.

Public Impact

The Department of the Navy benefits from the installation of WCS Kits, likely enhancing aircraft capabilities or maintenance. Services are delivered to support military aviation operations, contributing to national defense readiness. The primary geographic impact is in Florida, where the installation services will be performed. The contract supports specialized manufacturing and installation workforces within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency regarding the justification for sole-source procurement.
Long contract duration could lead to cost overruns if not managed effectively.
No small business participation noted, potentially excluding smaller, innovative firms.

Positive Signals

Fixed-price contract type helps to cap potential cost increases.
Award to an established contractor like Northrop Grumman suggests a focus on reliability and expertise.
Contract supports critical defense needs for the Navy.

Sector Analysis

This contract falls within the Other Aircraft Parts and Auxiliary Equipment Manufacturing sector (NAICS 336413). This industry is a critical component of the broader aerospace and defense ecosystem, supplying essential parts and services for military and commercial aircraft. The market size for aircraft parts manufacturing is substantial, driven by ongoing defense spending and commercial aviation demand. This specific contract for WCS Kit Installation represents a niche but vital segment within this sector, focusing on specialized modifications or equipment integration.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific contract. This could mean that a significant portion of the contract value does not flow down to the small business ecosystem, potentially impacting their growth and ability to compete on future defense contracts.

Oversight & Accountability

Oversight for this contract would primarily 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 or services for an agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract details are typically available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Naval Aviation Support
Specialized Equipment Installation

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. WCS KIT INSTALLATION

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 $25.5 million.

What is the period of performance?

Start: 2023-10-31. End: 2028-01-31.

What is the specific function and benefit of the 'WCS Kit Installation' being procured?

The provided data does not specify the exact nature or function of the 'WCS Kit Installation.' WCS likely refers to a specific system or component within naval aircraft, possibly related to weapons control, warning systems, or a specialized operational suite. The installation of such kits typically aims to upgrade existing aircraft capabilities, integrate new technologies, enhance performance, or meet evolving operational requirements. Without further details on the 'WCS Kit,' a precise understanding of its benefits, such as improved targeting, enhanced survivability, or new mission capabilities, cannot be determined from the contract data alone. Further research into naval aviation systems or specific program documentation would be required.

What is the justification for awarding this contract on a sole-source basis to Northrop Grumman?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. While the specific justification is not detailed, common reasons for sole-source procurements in defense include unique technical capabilities possessed by only one contractor, proprietary technology essential for the requirement, urgent and compelling needs where only one source can respond in time, or situations where a previous contract was awarded competitively, and follow-on work is only feasible with the original awardee due to integration or compatibility issues. For Northrop Grumman to be the sole source for WCS Kit Installation, it likely possesses exclusive rights, specialized expertise, or critical infrastructure necessary for this specific task that other potential contractors do not have.

How does the $25.5 million contract value compare to historical spending on similar WCS Kit Installations or related aircraft modifications?

Comparing the $25.5 million contract value requires historical data on similar WCS Kit Installations or comparable aircraft modification contracts. Without access to historical spending patterns for this specific kit or closely related systems, a direct benchmark is difficult. However, $25.5 million is a substantial sum for a single contract, suggesting either a large quantity of kits to be installed, a complex installation process, or a high per-unit cost. If this is a new type of kit or modification, historical comparisons might be less relevant than benchmarking against the cost of other significant aircraft upgrades. Analysis of past contracts for similar scope and complexity within naval aviation would be needed to assess if this value is reasonable.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

Sole-source contracts of this magnitude ($25.5 million) and duration (over 4 years) carry several risks. The primary risk is the lack of price competition, which can lead to inflated costs for the government as the contractor faces no pressure to offer the lowest possible price. There's also a risk of complacency from the contractor, potentially leading to reduced innovation or less rigorous performance standards compared to a competitive environment. Furthermore, if the sole-source justification is weak or becomes invalid, it could lead to protests and delays. The long duration increases the risk of cost overruns if the initial pricing assumptions are inaccurate or if unforeseen issues arise during performance, especially without the competitive checks and balances.

What is Northrop Grumman's track record with the Department of Defense and specifically the Department of the Navy for similar types of contracts?

Northrop Grumman Systems Corporation is a major defense contractor with a long and extensive history of performing work for the Department of Defense (DoD) and the Department of the Navy (DoN). They are known for their expertise in various areas, including aerospace systems, defense electronics, and information systems. While the specific data here doesn't detail their past performance on WCS Kit Installations, their overall track record with the DoD/DoN is generally robust, involving numerous large-scale contracts for aircraft, ships, and other defense platforms. Performance reviews and contract histories available through federal procurement databases would provide a more granular assessment of their past performance quality, timeliness, and cost control on similar projects.

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

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: $28,355,016

Exercised Options: $25,476,681

Current Obligation: $25,476,681

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $237,363

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