Navy Awards Northrop Grumman $25M for Aircraft Component Modification
Contract Overview
Contract Amount: $25,015,883 ($25.0M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2025-03-24
End Date: 2025-11-21
Contract Duration: 242 days
Daily Burn Rate: $103.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MODIFICATION OF EQUIPMENT- AIRCRAFT COMPONENTS AND ACCESSORIES
Place of Performance
Location: POINT MUGU NAWC, VENTURA County, CALIFORNIA, 93042
Plain-Language Summary
Department of Defense obligated $25.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: MODIFICATION OF EQUIPMENT- AIRCRAFT COMPONENTS AND ACCESSORIES Key points: 1. Significant contract value for aircraft component modification. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Potential for cost overruns given Cost Plus Fixed Fee structure. 4. Engineering services sector sees substantial defense spending.
Value Assessment
Rating: fair
The contract value of $25M for aircraft component modification appears substantial. Without specific benchmarks for similar modifications, a direct pricing assessment is difficult. The Cost Plus Fixed Fee (CPFF) structure warrants scrutiny for potential cost escalation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of full and open competition. This method may limit price discovery and potentially lead to higher costs for the government compared to a competitive bidding process.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not benefit from the cost savings typically achieved through competitive procurement.
Public Impact
Ensures continued availability and performance of critical aircraft components. Supports national defense readiness through specialized engineering services. Potential impact on the broader aerospace supply chain and related jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
Positive Signals
- Critical component modification
- Supports defense readiness
Sector Analysis
This contract falls within the Engineering Services sector, specifically related to defense procurement. Spending in this area is crucial for maintaining military readiness and technological superiority, with significant government investment annually.
Small Business Impact
The awardee, Northrop Grumman Systems Corporation, is a large prime contractor. There is no indication in the provided data that small businesses were involved in this specific contract action, either as subcontractors or direct awardees.
Oversight & Accountability
The Department of the Navy is responsible for oversight of this contract. The CPFF structure necessitates robust monitoring to ensure costs remain reasonable and within the fixed fee parameters.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type can lead to cost overruns.
- Lack of transparency in pricing due to sole-source nature.
- Potential for contractor to maximize profit through cost accumulation.
Tags
engineering-services, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. MODIFICATION OF EQUIPMENT- AIRCRAFT COMPONENTS AND ACCESSORIES
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 $25.0 million.
What is the period of performance?
Start: 2025-03-24. End: 2025-11-21.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further details, it's unclear if alternative competitive strategies were explored or deemed infeasible. A thorough review of the justification is necessary to ensure fair and efficient use of taxpayer funds.
How will the Cost Plus Fixed Fee structure be managed to mitigate cost overruns?
Managing a CPFF contract requires stringent oversight, detailed cost tracking, and regular audits. The Navy must establish clear performance metrics and milestones, closely monitor all incurred costs against the estimated cost, and ensure the fixed fee remains appropriate for the defined scope of work. Proactive risk management and clear communication with the contractor are essential.
What is the long-term strategy for ensuring competitive sourcing of aircraft component modifications?
The long-term strategy should involve market research to identify potential sources for future modifications, breaking down complex requirements into smaller, more competitive packages, and fostering an environment where new entrants can develop the necessary capabilities. Regularly reviewing sole-source justifications and actively seeking opportunities for competition are key to avoiding long-term reliance on single providers.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6893616R0069
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 925 OYSTER BAY RD, BETHPAGE, NY, 11714
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,675,253
Exercised Options: $31,675,253
Current Obligation: $25,015,883
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6893619D0007
IDV Type: IDC
Timeline
Start Date: 2025-03-24
Current End Date: 2025-11-21
Potential End Date: 2025-11-21 00:00:00
Last Modified: 2025-11-03
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