Northrop Grumman awarded $13.57M for aircraft parts, highlighting sole-source procurement in defense

Contract Overview

Contract Amount: $13,571,048 ($13.6M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2017-06-14

End Date: 2025-12-31

Contract Duration: 3,122 days

Daily Burn Rate: $4.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GROUP 1 DFDDP OTPS

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $13.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GROUP 1 DFDDP OTPS Key points: 1. Contract awarded to a single, established provider suggests potential lack of competitive pricing pressure. 2. Long contract duration (over 8 years) may indicate a need for sustained support or potential for cost escalation. 3. The award is a delivery order under a larger contract, making direct value-for-money assessment challenging without broader context. 4. Sole-source nature raises questions about market research and the availability of alternative suppliers. 5. Focus on aircraft parts manufacturing points to a critical niche within the defense industrial base. 6. Geographic concentration in Florida for this specific order warrants attention for supply chain resilience.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is difficult without knowing the terms of the parent contract and the specific parts procured. However, the 'NOT COMPETED' status for this award suggests that a competitive process was bypassed, which typically leads to less favorable pricing for the government compared to open competition. Without comparable bids or market research data, it's hard to definitively assess if the price reflects fair market value. The fixed-price nature of the contract offers some cost certainty, but the lack of competition is a primary concern for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that Northrop Grumman was the only bidder considered. This approach is typically used when only one source is capable of meeting the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements. The lack of competition means that the government did not benefit from the price discovery mechanisms that occur when multiple companies vie for a contract.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust oversight to ensure the awarded price is fair and reasonable.

Public Impact

The Department of Defense benefits from the continued supply of critical aircraft parts, ensuring operational readiness. Northrop Grumman Systems Corporation, as the contractor, benefits from continued revenue and contract sustainment. The workforce involved in manufacturing these parts, likely skilled technicians and engineers, maintains employment. The geographic impact is concentrated in Florida, supporting the regional economy where the delivery order is managed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce transparency in pricing.
Long contract duration could mask inefficiencies or cost overruns.
Dependence on a single supplier for critical parts poses supply chain risk.

Positive Signals

Award to an established defense contractor suggests reliability and existing capability.
Fixed-price contract type provides cost certainty for this specific order.
Delivery order structure implies it's part of a larger, potentially strategic, program.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. This is a highly specialized and capital-intensive industry dominated by a few large prime contractors and a complex supply chain of smaller manufacturers. Spending in this area is critical for national security, supporting the maintenance and upgrade of military aviation assets. Comparable spending benchmarks would typically be found within broader DoD procurement data for aircraft components and sustainment.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a large prime contractor, it is unlikely to directly benefit small businesses unless Northrop Grumman voluntarily includes them in its supply chain. Further investigation into Northrop Grumman's subcontracting plans would be needed to assess any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA). As a delivery order under a larger contract, oversight would focus on ensuring timely delivery, quality of parts, and adherence to the terms of the parent contract. Transparency regarding the specific pricing justification for this sole-source award would be a key area for scrutiny. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics
Northrop Grumman Contracts
Sole-Source Procurements
DoD Aircraft Sustainment

Risk Flags

Sole-source award lacks competitive pricing.
Potential for supply chain disruption due to single supplier.
Lack of transparency in pricing justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GROUP 1 DFDDP OTPS

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 $13.6 million.

What is the period of performance?

Start: 2017-06-14. End: 2025-12-31.

What specific aircraft parts are being procured under this delivery order, and what is their criticality to DoD operations?

The provided data does not specify the exact aircraft parts covered by this delivery order (DO). The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates a broad category. To assess criticality, one would need to consult the detailed statement of work (SOW) or contract line item numbers (CLINs) associated with this specific DO. These parts could range from essential engine components to specialized avionics or structural elements. Their criticality would be determined by factors such as the number of aircraft requiring them, the availability of alternatives, and the impact on mission capability if supply is interrupted. Without this detailed information, assessing the true impact of this procurement is limited.

What was the justification for awarding this contract on a sole-source basis, and what market research was conducted?

The data indicates the contract type was 'NOT COMPETED,' implying a sole-source justification. Typically, such justifications require demonstrating that only one responsible source can provide the required supplies or services. Common reasons include proprietary data, unique technical capabilities, urgent and compelling needs where competition is not feasible, or if the contract is a follow-on to a previously competed effort where only the original contractor possesses the necessary knowledge or infrastructure. The specific justification and any market research conducted would be documented in a Justification and Approval (J&A) document, which is usually available through contract data repositories like FPDS-NG or agency-specific portals, though not provided in the summary data.

How does the total value of this delivery order compare to historical spending on similar aircraft parts by the Department of Defense?

Comparing the $13.57 million value of this specific delivery order to historical spending requires access to broader DoD procurement databases. The NAICS code 336413 covers a wide array of aircraft parts. To make a meaningful comparison, one would need to identify similar contracts awarded for comparable parts, potentially from the same contractor or competitors, over previous fiscal years. Analyzing trends in pricing, volume, and contract types (e.g., fixed-price vs. cost-plus) for similar items would provide context. Without this comparative data, it's difficult to ascertain if this $13.57 million represents an increase, decrease, or stable level of spending for these types of parts.

What is Northrop Grumman's track record with the Department of Defense, particularly concerning contracts of this nature?

Northrop Grumman Systems Corporation is a major defense contractor with a long history of supplying complex systems and components to the Department of Defense. Their track record typically includes large-scale programs related to aerospace, defense electronics, and information systems. For contracts involving aircraft parts manufacturing (NAICS 336413), their experience likely involves sophisticated production processes and stringent quality control. Performance history, including past performance evaluations, on similar contracts would be a key indicator of reliability. While this specific delivery order is sole-source, Northrop Grumman's overall relationship with the DoD is extensive, suggesting a deep understanding of military requirements and procurement processes.

What are the potential risks associated with a sole-source award for critical aircraft components, and what mitigation strategies are in place?

The primary risks of a sole-source award for critical aircraft components include potential overpricing due to lack of competition, reduced incentive for innovation, and supply chain vulnerability if the sole provider faces production issues or goes out of business. Mitigation strategies employed by the DoD often involve rigorous price analysis, negotiation, and oversight by agencies like DCMA to ensure the price is fair and reasonable. Contract clauses may also require the contractor to identify and qualify alternative sources or maintain sufficient inventory. For long-term sole-source arrangements, agencies may also invest in developing competition by supporting alternative suppliers or investing in government-owned technical data.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001914R0023

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,571,048

Exercised Options: $13,571,048

Current Obligation: $13,571,048

Subaward Activity

Number of Subawards: 44

Total Subaward Amount: $24,810,244

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001915G0026

IDV Type: BOA

Timeline