DoD awards $131M for aircraft parts, with Northrop Grumman as sole provider

Contract Overview

Contract Amount: $13,129,144 ($13.1M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-12-30

End Date: 2026-10-29

Contract Duration: 668 days

Daily Burn Rate: $19.7K/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 $13.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PAM,AIRCRAFT,MATERI Key points: 1. Contract awarded to a single, established prime contractor. 2. Focus on specialized aircraft components suggests high technical requirements. 3. Long-term contract duration indicates a sustained need for these parts. 4. Fixed-price contract type aims to control costs for the government. 5. Geographic concentration in Florida for delivery. 6. No small business set-aside noted, potentially limiting broader participation.

Value Assessment

Rating: fair

The contract value of $131 million for aircraft parts over approximately two years requires careful benchmarking. Without specific details on the parts or quantities, a direct comparison to similar contracts is challenging. However, the sole-source nature of the award raises concerns about potential overpricing compared to a competitive environment. The fixed-price structure provides some cost certainty, but the absence of competition limits the government's ability to secure the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency precludes a competitive process. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards can result in higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's leverage in negotiating favorable terms and pricing.

Public Impact

The Department of the Navy benefits from the acquisition of critical aircraft parts. This contract supports the operational readiness and maintenance of naval aviation assets. The primary impact is on the defense industrial base, specifically within aircraft manufacturing and support. Workforce implications are likely concentrated within Northrop Grumman's facilities in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of small business participation may reduce opportunities for smaller firms in the supply chain.
Long contract duration without clear performance metrics could mask inefficiencies.

Positive Signals

Fixed-price contract type provides cost predictability for the government.
Award to an established contractor like Northrop Grumman suggests a focus on reliability and proven capability.
Contract duration aligns with the expected lifecycle of complex aircraft components.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such specialized components is often characterized by high barriers to entry due to technical expertise, intellectual property, and stringent quality requirements. Spending in this area is critical for maintaining national defense capabilities. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar high-value, specialized defense articles.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means that opportunities for small businesses to participate in this significant defense contract are likely limited to indirect roles or as suppliers to the prime contractor. The absence of a small business focus could mean missed opportunities to foster innovation and economic growth within the small business defense industrial base.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are embedded within the contract terms, particularly the fixed-price structure which shifts some risk to the contractor. Transparency is generally maintained through contract databases, though the specifics of sole-source justifications may have limited public disclosure. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Naval Aviation Support
Sole-Source Contracts
Northrop Grumman Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.1 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 $13.1 million.

What is the period of performance?

Start: 2024-12-30. End: 2026-10-29.

What specific aircraft parts are being procured under this contract, and what is their criticality to naval operations?

The contract specifies 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413). While the exact parts are not detailed in the provided data, the classification suggests components essential for the operation, maintenance, or enhancement of naval aircraft. These could range from engine components, structural elements, avionics, or specialized support equipment. Their criticality is implied by the substantial value and the sole-source award, indicating a unique or indispensable role in maintaining the readiness and capability of the Navy's air fleet. Without further details, it's difficult to pinpoint specific operational impacts, but any disruption in the supply of such parts could affect aircraft availability and mission readiness.

How does the $131 million contract value compare to historical spending on similar aircraft parts by the Department of the Navy?

Benchmarking the $131 million contract value requires access to historical spending data for comparable aircraft parts procured by the Department of the Navy. Given this is a sole-source award to Northrop Grumman, it is likely for specialized or proprietary components. A direct comparison to competitively bid contracts for similar items would be misleading due to differing market dynamics. However, analyzing Northrop Grumman's past contract values for similar product lines, or the Navy's overall spending on aircraft sustainment and parts over the contract's duration (2024-2026), could provide context. Without specific part identification, a precise historical comparison is challenging, but the value suggests a significant procurement for critical systems.

What are the primary risks associated with a sole-source award for critical aircraft parts?

The primary risks associated with a sole-source award for critical aircraft parts include inflated pricing due to the lack of competition, potential for reduced innovation as the contractor faces no market pressure to improve products or processes, and a heightened dependency on a single supplier. This dependency can create vulnerabilities in the supply chain, making the government susceptible to disruptions if the sole provider experiences production issues, financial instability, or changes its business strategy. Furthermore, the absence of competitive bidding limits the government's ability to explore alternative solutions or technologies that might be more cost-effective or advanced.

What performance metrics or oversight mechanisms are likely in place to ensure value and quality for this contract?

While specific performance metrics are not detailed in the provided data, contracts of this magnitude and criticality typically include robust oversight mechanisms. These often involve detailed technical specifications, quality assurance surveillance plans (QASPs), and delivery schedules. The fixed-price contract type itself incentivizes the contractor to manage costs effectively. The Department of the Navy would likely assign contracting officers' representatives (CORs) to monitor contractor performance, ensure compliance with contract terms, and verify the quality of delivered parts. Regular progress reviews and audits may also be part of the oversight framework to ensure accountability and value for taxpayer money.

What is Northrop Grumman's track record with the Department of the Navy for similar aircraft parts procurements?

Northrop Grumman Systems Corporation is a major defense contractor with a long-standing relationship with the Department of the Navy, frequently awarded contracts for aircraft systems, components, and support. Their track record typically involves delivering complex, high-value systems. For aircraft parts, they are known for producing components for various naval platforms. Historical data would likely show numerous awards for similar items, often under competitive or sole-source conditions, reflecting their established position in the defense industrial base. Assessing their specific performance on past contracts for comparable parts would require a deeper dive into contract databases to evaluate on-time delivery, quality compliance, and cost performance.

How does the $131 million contract value align with the overall defense budget for aircraft sustainment and parts?

The $131 million contract value represents a portion of the Department of the Navy's broader budget allocated to aircraft sustainment and parts procurement. Defense budgets are typically in the hundreds of billions of dollars annually, with significant allocations for maintaining and modernizing military fleets. While $131 million is a substantial sum, it needs to be viewed within the context of the overall defense spending. This contract likely supports a specific program or a set of aircraft platforms. Its alignment with the overall budget depends on the priorities set for naval aviation readiness and modernization for the fiscal years covered by the contract duration.

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: $13,129,144

Exercised Options: $13,129,144

Current Obligation: $13,129,144

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $10,068,996

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