TRW Inc. awarded $12.8M logistics support contract by Naval Air Systems Command in 1996

Contract Overview

Contract Amount: $12,801,122 ($12.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 1996-11-06

End Date: 1998-12-31

Contract Duration: 785 days

Daily Burn Rate: $16.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199712!1700!1226!AT724!NAVAL AIR SYSTEMS COMMAND !N0001996C0056 !A!*!P00022 !19961106!19970330!121713036!121713036!004179453!N!65409!TRW INC !1 RANCHO CARMEL DR !SAN DIEGO !CA!92128!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!0001!+000000198492!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !A2 !MISSILE AND SPACE SYSTEMS !2000!NOT DISCERNABLE OR CLASSIFIED !3761!3!*!*!*!B!A!*!C !U!U!1!001!N!1A!A!N!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: REDONDO BEACH, LOS ANGELES County, CALIFORNIA, 90278

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: 199712!1700!1226!AT724!NAVAL AIR SYSTEMS COMMAND !N0001996C0056 !A!*!P00022 !19961106!19970330!121713036!121713036!004179453!N!65409!TRW INC !1 RANCHO CARMEL DR !SAN DIEGO !CA!92128!66000!073!06!SAN DIEGO !SAN DI… Key points: 1. Contract awarded for logistics support services, indicating a need for maintenance, supply chain, or operational assistance. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. Awarded as a Cost Plus Fixed Fee (CPFF) type, which can incentivize cost overruns if not closely monitored. 4. The duration of the contract was 785 days, suggesting a medium-term need for these services. 5. The contractor, TRW Inc., is a large, established entity, implying a capacity for complex support but potentially higher overhead. 6. The contract falls under the Missile and Space Systems category, suggesting a focus on specialized defense equipment.

Value Assessment

Rating: questionable

The contract value of $12.8 million for logistics support services over approximately two years appears to be within a reasonable range for specialized defense systems. However, without specific benchmarks for similar logistics support contracts for missile and space systems, a definitive value-for-money assessment is challenging. The CPFF pricing structure warrants scrutiny to ensure costs were managed effectively and that the fixed fee remained appropriate for the services rendered. Further analysis would require comparing the scope of work and performance metrics against other contracts of a similar nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This raises concerns about whether the government secured the best possible price and terms.

Taxpayer Impact: For taxpayers, a sole-source award means there's a higher risk of paying a premium compared to a competitively bid contract. Without competitive pressure, the contractor may have less incentive to offer the lowest possible price.

Public Impact

The primary beneficiaries are likely the Naval Air Systems Command and potentially other Department of Defense entities relying on the supported missile and space systems. Services delivered include logistics support, which could encompass maintenance, repair, supply chain management, and technical assistance for critical defense assets. The geographic impact is centered around the Naval Air Systems Command's operational areas, likely within the United States, supporting naval aviation readiness. Workforce implications include the employment of personnel by TRW Inc. to fulfill the contract's logistics and support requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type can incentivize cost increases if not rigorously overseen.
Lack of detailed performance metrics in the provided data makes it difficult to assess service quality and efficiency.
The specific nature of 'logistics support services' for missile and space systems is broad and requires further definition for a complete understanding of the scope.

Positive Signals

Awarded to TRW Inc., a large and established defense contractor with a track record in complex systems.
The contract addresses a critical need for logistics support, essential for maintaining operational readiness of naval assets.
The contract duration suggests a sustained requirement, indicating the importance of the services provided.
The contract is managed by the Defense Contract Management Agency, suggesting a level of oversight.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on logistics support for missile and space systems. The defense logistics market is substantial, driven by the need to maintain complex and high-value military assets. Companies like TRW Inc. (now part of Northrop Grumman) are key players in providing such specialized services. Benchmarking this contract's value would require comparing it to other logistics support contracts for similar defense platforms, considering factors like system complexity, service scope, and contract type.

Small Business Impact

There is no indication in the provided data that this contract involved small business set-asides or subcontracting. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless TRW Inc. engaged small businesses as subcontractors, which is not specified here.

Oversight & Accountability

Oversight for this contract would have been primarily conducted by the Naval Air Systems Command and the Defense Contract Management Agency (DCMA). As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to ensure that costs claimed by the contractor were reasonable and allowable. Transparency regarding the specific performance metrics and cost breakdowns would be crucial for a thorough assessment of accountability, but this level of detail is not available in the provided summary data.

Related Government Programs

Naval Air Systems Command Contracts
Logistics Support Services
Missile and Space Systems Procurement
Department of Defense Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of detailed performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. 199712!1700!1226!AT724!NAVAL AIR SYSTEMS COMMAND !N0001996C0056 !A!*!P00022 !19961106!19970330!121713036!121713036!004179453!N!65409!TRW INC !1 RANCHO CARMEL DR !SAN DIEGO !CA!92128!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!0001!+000000198492!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !A2 !MISSILE AND SPACE SYSTEMS !2000!NOT DISCERNABLE OR CLASSIFIED !3761!3!*!*!*!B!A!*!C !U!U!1!0

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 1996-11-06. End: 1998-12-31.

What was the specific scope of 'logistics support services' provided under this contract?

The provided data categorizes the service as 'LOGISTICS SUPPORT SERVICES' under the PSC code R706, and the Product Service Code description is 'MISSILE AND SPACE SYSTEMS'. This suggests the support likely encompassed a range of activities critical to the operation and maintenance of naval missile and space systems. These could include, but are not limited to, supply chain management, inventory control, maintenance and repair of components, technical documentation, training, and potentially field support. Without access to the full contract statement of work, the precise details of the services rendered remain unspecified, making it difficult to fully assess the contract's objectives and outcomes.

How did the contractor's past performance influence the decision for a sole-source award?

The data indicates this contract was awarded on a sole-source basis ('CT': 'NOT COMPETED'). While the specific justification for this sole-source award is not detailed in the provided summary, it typically stems from reasons such as the contractor possessing unique capabilities, proprietary technology, or being the only responsible source capable of meeting the requirement. For a sole-source award, the government would have likely assessed TRW Inc.'s past performance on similar contracts, their technical qualifications, and their ability to meet the demanding requirements of missile and space systems logistics. A positive track record in these areas would be a prerequisite for such an award, even without a competitive bidding process.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for logistics support?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to TRW Inc., present specific risks. The 'cost plus' element means the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee. This can create an incentive for the contractor to increase costs, as their fee remains constant regardless of the total expenditure. For logistics support, this could manifest as less stringent cost control over parts, labor, or overhead. The 'fixed fee' provides some predictability for the government regarding profit, but the overall cost can escalate. Effective oversight by the contracting agency is crucial to mitigate these risks, ensuring that all costs are reasonable, allocable, and necessary for fulfilling the contract's objectives.

Can the $12.8 million contract value be benchmarked against similar contracts?

Benchmarking the $12.8 million contract value for logistics support services for missile and space systems is challenging with the provided data alone. The value appears substantial, reflecting the complexity and criticality of the systems supported. To perform a meaningful benchmark, one would need to compare this contract against other logistics support agreements for similar defense platforms (e.g., other missile systems, space-based assets) awarded around the same period (mid-to-late 1990s). Key comparison points would include the scope of services, contract duration (785 days), contract type (CPFF), and the specific systems involved. Without access to a database of comparable contracts with detailed scope and pricing, it's difficult to definitively state whether $12.8 million represented excellent, fair, or excessive value.

What was the total federal spending on logistics support services for missile and space systems during the contract period?

The provided data focuses solely on this specific contract awarded to TRW Inc. It does not contain information on the total federal spending for logistics support services for missile and space systems during the contract period (1996-1998). To determine this, one would need to query federal procurement databases (like FPDS or USAspending) for all contracts awarded under relevant Product Service Codes (PSCs) and categories related to missile and space systems logistics during that timeframe. This would involve aggregating data from various agencies, including the Department of Defense, NASA, and potentially others, to provide a comprehensive picture of the overall federal investment in this area.

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

Parent Company: Northrop Grumman Corporation

Address: 1 RANCHO CARMEL DR, SAN DIEGO, CA, 92128

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline