DoD Awards Northrop Grumman $322M for Aircraft Parts, Raising Oversight Concerns
Contract Overview
Contract Amount: $32,202,324 ($32.2M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2024-06-25
End Date: 2026-10-28
Contract Duration: 855 days
Daily Burn Rate: $37.7K/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 $32.2 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PAM,AIRCRAFT,MATERI Key points: 1. Significant contract value of $322 million awarded to a single large corporation. 2. Lack of competition raises questions about price discovery and potential overspending. 3. Contract duration extends over two years, impacting long-term budget predictability. 4. Focus on aircraft parts manufacturing places this within the defense sector's supply chain.
Value Assessment
Rating: questionable
The contract value of $322 million 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. Further analysis of the specific parts and their complexity is needed for a precise benchmark.
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 reduces price discovery mechanisms, potentially leading to higher costs for taxpayers as the government may not be receiving the best possible price.
Taxpayer Impact: The lack of competition for a $322 million contract means taxpayers may be paying a premium, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Reliance on a single contractor for critical aircraft parts could pose supply chain risks. The long contract duration impacts budget allocation and planning for the Department of the Navy.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
- Long contract duration
Positive Signals
- Specific need for aircraft parts
- Established contractor relationship
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. Spending in this sector is critical for national security, but often involves high costs and complex supply chains, making oversight crucial.
Small Business Impact
The awardee is a large corporation, and there is no indication that small businesses were involved as subcontractors or partners in this specific contract. This award does not appear to support small business utilization goals.
Oversight & Accountability
The sole-source nature of this large contract warrants close oversight to ensure fair pricing and prevent potential waste. The Department of Defense should have robust internal controls to validate the necessity and cost-effectiveness of such awards.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for overpricing due to lack of competition.
- Risk of supply chain disruption if Northrop Grumman faces issues.
- Limited transparency on specific parts and their necessity.
- Long-term financial commitment without competitive validation.
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 $32.2 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 $32.2 million.
What is the period of performance?
Start: 2024-06-25. End: 2026-10-28.
What specific aircraft parts are being procured, and what is their criticality to ongoing operations?
The contract specifies 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' Without a detailed breakdown, it's challenging to assess the criticality. However, given the substantial value and duration, these are likely essential components for fleet readiness. Further investigation into the specific part numbers and their role in aircraft maintenance and operation is recommended to understand the true impact.
What justification was provided for not competing this contract, and does it align with federal procurement regulations?
The data indicates the contract was 'NOT COMPETED.' Federal regulations allow for sole-source procurement under specific circumstances, such as when only one responsible source can fulfill the requirement. The justification for this deviation from full and open competition needs to be thoroughly reviewed by the agency to ensure it meets the stringent criteria and was not an administrative convenience.
How does the awarded price compare to historical pricing for similar components or industry benchmarks?
Benchmarking this $322 million contract is difficult without detailed specifications of the parts. However, the absence of competition suggests a potential for inflated pricing. A thorough post-award review comparing the unit costs against available market data or previous contracts for analogous parts is essential to determine if the government received fair value.
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
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: $32,286,996
Exercised Options: $32,286,996
Current Obligation: $32,202,324
Subaward Activity
Number of Subawards: 18
Total Subaward Amount: $113,241,223
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0038324DBH01
IDV Type: IDC
Timeline
Start Date: 2024-06-25
Current End Date: 2026-10-28
Potential End Date: 2027-01-14 00:00:00
Last Modified: 2026-01-14
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)