DoD Awards Northrop Grumman $1.77B for Aircraft Parts, Raising Competition Concerns
Contract Overview
Contract Amount: $17,690,085 ($17.7M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2023-06-27
End Date: 2026-11-25
Contract Duration: 1,247 days
Daily Burn Rate: $14.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
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 $17.7 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PAM,AIRCRAFT,MATERI Key points: 1. Significant contract value of $1.77 billion awarded to a single large business. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract is for aircraft parts, a critical but potentially high-cost sector. 4. Focus on Florida suggests potential regional economic impact, but also concentration risk.
Value Assessment
Rating: questionable
The contract value of $1.77 billion for aircraft parts is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar components. Benchmarking against other DoD contracts for comparable parts is crucial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to higher costs for taxpayers as the vendor faces less pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition for a contract of this magnitude means taxpayers may be paying a premium for these aircraft parts, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying for essential aircraft components due to the absence of competitive bidding. The large sum awarded to a single contractor could impact the market for smaller, specialized suppliers. Dependence on one supplier for critical parts could pose a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Sole-source award
- Potential for cost overruns
Positive Signals
- Award to established large business
- Contract duration supports long-term needs
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for aircraft parts. Spending in this area is consistently high, driven by military readiness and technological advancements. Benchmarks for similar parts contracts are often in the hundreds of millions to billions.
Small Business Impact
The contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication of small business participation in this specific award, which is common for large, sole-source defense contracts.
Oversight & Accountability
The Department of the Navy awarded this contract. Oversight is critical to ensure the necessity of the parts, the quality of the components, and the reasonableness of the costs, especially given the non-competitive nature of the award.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Sole-source award mechanism
- High contract value without clear justification for non-competition
- Potential for inflated pricing
- Supply chain dependency risk
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 $17.7 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 $17.7 million.
What is the period of performance?
Start: 2023-06-27. End: 2026-11-25.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. The Department of Defense should have conducted a price analysis, potentially using historical data or independent cost estimates, to validate the pricing. However, without competition, the rigor of this analysis is paramount to protect taxpayer interests.
What are the potential risks associated with relying on a single supplier for such a significant volume of critical aircraft parts?
The primary risks include supply chain disruptions due to unforeseen events affecting the sole supplier (e.g., natural disasters, labor issues, geopolitical instability), potential price increases over the contract's life, and a lack of incentive for the supplier to innovate or improve efficiency. This dependence could also impact the readiness of aircraft if parts become unavailable.
How does this contract's value and structure compare to similar aircraft parts procurements within the DoD or other federal agencies?
Without specific details on the exact parts and their specifications, a direct comparison is challenging. However, $1.77 billion is a substantial sum, suggesting either a very large quantity of parts, highly complex or specialized components, or a prolonged period of need. A competitive procurement would typically yield a lower price point for comparable goods.
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: $17,690,085
Exercised Options: $17,690,085
Current Obligation: $17,690,085
Subaward Activity
Number of Subawards: 15
Total Subaward Amount: $88,164,616
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: N0038322GS501
IDV Type: BOA
Timeline
Start Date: 2023-06-27
Current End Date: 2026-11-25
Potential End Date: 2026-11-25 00:00:00
Last Modified: 2025-11-28
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