DoD Awards $22.3M NRE Contract to Northrop Grumman for Aircraft Parts, Facing Limited Competition
Contract Overview
Contract Amount: $22,270,706 ($22.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-09-15
End Date: 2027-08-31
Contract Duration: 715 days
Daily Burn Rate: $31.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NRE FOR PALC
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $22.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: NRE FOR PALC Key points: 1. Significant non-recurring engineering (NRE) investment for aircraft parts. 2. Sole-source award to Northrop Grumman, limiting competitive pricing. 3. Potential for cost overruns due to Cost Plus Fixed Fee contract type. 4. Long contract duration of 715 days suggests complex development or integration.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type can incentivize contractor cost-plus, potentially leading to higher prices than fixed-price contracts. Benchmarking against similar NRE contracts for aircraft components is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and may result in a higher price than if multiple vendors had bid.
Taxpayer Impact: Taxpayer funds are being used for this sole-source award, with potential for inflated costs due to the absence of competitive pressure.
Public Impact
Ensures continued support and development for critical aircraft components. Potential for innovation and technological advancement through NRE. Lack of competition raises concerns about the best use of taxpayer funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Supports critical defense systems
- Potential for technological advancement
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this sector is crucial for maintaining military readiness, but often involves specialized components where competition can be limited.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large defense contractor. There is no indication that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The Department of the Navy awarded this contract. Oversight will be critical to ensure that the NRE costs are reasonable and that the fixed fee aligns with the work performed.
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 competition.
- Cost-plus contract type can lead to higher costs.
- Potential for cost overruns.
- Lack of transparency in NRE cost breakdown.
- Long contract duration may indicate complexity or potential delays.
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 $22.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. NRE FOR PALC
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 $22.3 million.
What is the period of performance?
Start: 2025-09-15. End: 2027-08-31.
What specific technical advancements or capabilities does this NRE aim to achieve, and how do they justify the sole-source award?
The NRE is likely focused on developing or improving specific aircraft components that are either proprietary to Northrop Grumman or require specialized expertise not readily available elsewhere. Justification for a sole-source award typically hinges on factors like unique technical capabilities, existing system integration, or urgent national security needs where competition would cause unacceptable delays or risks.
How will the Department of the Navy ensure cost control and prevent potential overruns with a Cost Plus Fixed Fee contract?
The Navy will likely implement robust oversight mechanisms, including detailed cost tracking, regular audits, and performance reviews. They will monitor expenditures against the fixed fee and the overall contract ceiling, potentially requiring justification for any deviations. Establishing clear milestones and deliverables will also be crucial for managing performance and costs.
What is the long-term strategy for ensuring competitive sourcing for future sustainment or upgrades of these aircraft parts?
The long-term strategy should involve planning for future competition by documenting the NRE work and any resulting intellectual property. The Department of Defense should explore options for breaking down future requirements into smaller, more competitive packages or encouraging technology transfer to enable broader market participation once the initial NRE is complete and the technology is mature.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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: $44,541,411
Exercised Options: $44,541,411
Current Obligation: $22,270,706
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001925G0003
IDV Type: BOA
Timeline
Start Date: 2025-09-15
Current End Date: 2027-08-31
Potential End Date: 2027-08-31 00:00:00
Last Modified: 2025-09-15
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