DoD's $18.7M aircraft parts contract awarded to Northrop Grumman, highlighting specialized manufacturing needs

Contract Overview

Contract Amount: $18,716,751 ($18.7M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2020-12-16

End Date: 2026-10-28

Contract Duration: 2,142 days

Daily Burn Rate: $8.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PAM,AIRCRAFT,MATERI

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PAM,AIRCRAFT,MATERI Key points: 1. Contract focuses on specialized bare printed circuit board manufacturing for aircraft, indicating a critical niche requirement. 2. Sole-source award suggests limited market availability or unique contractor capabilities for this specific component. 3. Long performance period (2020-2026) indicates sustained demand for these critical aircraft components. 4. Firm Fixed Price contract type aims to provide cost certainty for the Department of Defense. 5. Geographic concentration in Florida for manufacturing may point to specific industrial clusters or logistical considerations.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the specialized nature of bare printed circuit board manufacturing for aircraft and the sole-source award. Without competitive bids, it's difficult to definitively assess if the $18.7 million represents optimal value for money. However, the firm fixed-price structure provides some cost control. The duration of the contract suggests a consistent need, which could imply stable pricing over time, but a lack of comparative data prevents a strong value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corporation, was considered. This typically occurs when a product or service is unique, or when only one responsible source is available. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without alternative quotes, it's harder to ensure the most cost-effective solution was secured.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, ensuring the supply of critical components for aircraft. The services delivered involve the manufacturing of bare printed circuit boards essential for the functionality of various aircraft systems. The geographic impact is concentrated in Florida, where the manufacturing facilities are located, potentially supporting local jobs and the regional aerospace supply chain. Workforce implications include the need for skilled labor in specialized electronics manufacturing within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Dependence on a single supplier for critical aircraft components could pose supply chain risks.
Limited visibility into alternative manufacturing capabilities or technological advancements.

Positive Signals

Firm Fixed Price contract provides cost certainty for the duration of the award.
Long-term contract indicates a stable and predictable demand for the specialized components.
Award to an established contractor like Northrop Grumman suggests a focus on reliability and proven capabilities.

Sector Analysis

The aerospace and defense sector relies heavily on specialized electronic components like bare printed circuit boards. This contract falls within the broader electronics manufacturing industry, specifically serving the defense sub-sector. The market for such specialized components can be niche, with a limited number of manufacturers possessing the required certifications, quality control, and production capabilities for defense applications. Comparable spending benchmarks are difficult to establish without more specific component details, but defense electronics manufacturing is a significant segment of the overall industrial base.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by the sole-source award to a large corporation. There is no explicit information regarding subcontracting plans for small businesses. The focus on a specialized, high-value component manufactured by a prime contractor suggests that opportunities for small businesses may be limited to lower-tier supply chain roles, if any, rather than direct contract participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified components. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Aircraft Component Manufacturing
Defense Electronics Procurement
Naval Aviation Support Systems
Printed Circuit Board Fabrication
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Potential for price escalation
Supply chain dependency
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. PAM,AIRCRAFT,MATERI

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 $18.7 million.

What is the period of performance?

Start: 2020-12-16. End: 2026-10-28.

What is the specific type and complexity of the bare printed circuit boards being manufactured under this contract?

The provided data indicates the contract is for 'Bare Printed Circuit Board Manufacturing' (NAICS 334412) for aircraft applications. While the exact specifications are not detailed, bare printed circuit boards are the foundation upon which electronic components are mounted. For aircraft, these boards often require high reliability, resistance to extreme environmental conditions (temperature, vibration, radiation), and adherence to stringent military specifications (e.g., MIL-PRF-31032). The complexity can range from simple single-layer boards to intricate multi-layer boards with specialized materials and trace densities, crucial for advanced avionics and control systems.

Why was this contract awarded on a sole-source basis, and what alternatives were considered?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supply or service, or when a public exigency requires immediate procurement. For specialized defense components like aircraft circuit boards, the justification might stem from unique manufacturing capabilities, proprietary technology, or the need to maintain compatibility with existing platforms where only one supplier's product fits. Without the specific justification documentation (e.g., Justification and Approval - J&A), it's impossible to know the precise reasons or if limited market research was conducted to identify potential alternative sources.

How does the $18.7 million contract value compare to historical spending on similar components or by similar agencies?

Direct comparison of the $18.7 million contract value is difficult without knowing the precise quantity, specifications, and complexity of the bare printed circuit boards. However, the total contract value over its performance period (approximately 6 years) suggests a significant, ongoing need. The Department of Defense, particularly the Navy, frequently procures specialized electronic components. Historical spending data for similar circuit board manufacturing contracts, especially those meeting military-grade specifications and awarded sole-source, would be necessary for a meaningful benchmark. General industry data suggests that high-reliability, mil-spec compliant PCBs can command substantial prices due to rigorous testing and quality assurance processes.

What are the potential risks associated with relying on a single contractor for these critical aircraft components?

Relying on a single contractor, Northrop Grumman Systems Corporation in this case, for critical aircraft components like bare printed circuit boards presents several risks. Firstly, there's a supply chain risk; any disruption at the contractor's facility (e.g., natural disaster, labor strike, financial instability) could halt production and impact aircraft readiness. Secondly, the lack of competition can lead to price escalation over time, as the contractor faces no market pressure to reduce costs. Thirdly, it may stifle innovation, as there's less incentive for the contractor to invest in new technologies or process improvements if they are guaranteed the business. Finally, it creates a dependency that could be problematic if the contractor decides to exit the market or if strategic needs change.

What is Northrop Grumman's track record in manufacturing specialized electronic components for the defense sector?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience in producing complex systems and components for military applications. They have a well-established track record in aerospace and defense, including the design and manufacturing of sophisticated electronic warfare systems, radar, and avionics. Their involvement in producing specialized bare printed circuit boards for aircraft aligns with their core competencies in high-technology manufacturing for demanding environments. Past performance evaluations and contract histories within the DoD would provide more granular detail on their specific performance in delivering such components on time and to specification.

What oversight mechanisms are in place to ensure the quality and timely delivery of these circuit boards?

Oversight for this contract would involve several layers. The Department of the Navy's contracting officers and program managers are responsible for monitoring performance against the contract terms. Quality assurance representatives (QARs) from the Defense Contract Management Agency (DCMA) likely conduct inspections and audits at the contractor's facility to ensure compliance with specifications and quality standards. The firm fixed-price nature of the contract incentivizes the contractor to meet delivery schedules to avoid penalties or non-conformance issues. Reporting requirements within the contract would also provide ongoing visibility into production status and potential issues.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Bare Printed Circuit Board Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $43,153,457

Exercised Options: $18,716,751

Current Obligation: $18,716,751

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $102,463,237

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038319DUL01

IDV Type: IDC

Timeline