DoD awards $49.3M to Northrop Grumman for Global Hawk interim repair, raising concerns about competition

Contract Overview

Contract Amount: $49,329,916 ($49.3M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2010-03-26

End Date: 2013-12-31

Contract Duration: 1,376 days

Daily Burn Rate: $35.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GLOBAL HAWK INTERIM REPAIR CAPABILITY

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $49.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: GLOBAL HAWK INTERIM REPAIR CAPABILITY Key points: 1. Significant contract value for specialized aircraft repair. 2. Sole-source award limits competitive pricing. 3. Potential for cost overruns due to lack of competition. 4. Aircraft manufacturing sector with high technical barriers.

Value Assessment

Rating: questionable

The contract value of $49.3M for interim repair services is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar specialized aircraft maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach bypasses the competitive process, potentially leading to higher prices and reduced innovation as the contractor faces no market pressure.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government did not explore alternative, potentially lower-cost solutions.

Public Impact

Ensures continued operational readiness for critical Global Hawk surveillance aircraft. Supports specialized jobs within the aerospace and defense industry. Highlights reliance on a single contractor for essential maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost creep
Limited vendor options

Positive Signals

Maintains critical asset readiness
Supports specialized workforce

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, characterized by high R&D costs and specialized technical expertise. Spending benchmarks in this area are often high due to the complexity of military aircraft maintenance.

Small Business Impact

The contract was awarded to Northrop Grumman Systems Corporation, a large prime contractor. There is no indication of small business participation in this specific award, suggesting limited opportunities for smaller firms in this specialized repair work.

Oversight & Accountability

The award was managed by the Defense Contract Management Agency. Oversight would focus on ensuring the contractor meets performance requirements and manages costs effectively, though the lack of competition limits price oversight.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Potential for inflated pricing
Lack of competitive pressure
Limited transparency on cost justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. GLOBAL HAWK INTERIM REPAIR CAPABILITY

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 $49.3 million.

What is the period of performance?

Start: 2010-03-26. End: 2013-12-31.

What is the justification for the sole-source award, and were alternative solutions considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without further documentation, it's unclear if other qualified contractors were assessed or if specific circumstances necessitated awarding to Northrop Grumman without competition.

How will the government ensure cost-effectiveness and prevent overruns in the absence of competition?

In sole-source situations, cost-effectiveness is often managed through detailed cost analysis, negotiation, and robust contract surveillance. The government would likely scrutinize the contractor's cost proposals, labor rates, and material costs to identify potential areas for savings and prevent unwarranted price increases.

What is the long-term strategy for Global Hawk repair capabilities to ensure future competition and value?

The long-term strategy should involve market research to identify potential competitors, fostering competition through phased contract awards, or developing organic government capabilities. This ensures that future repair needs are met with competitive pricing and diverse vendor options, maximizing value for taxpayers.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 17066 GOLDENTOP RD., SAN DIEGO, CA, 92127

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $49,994,289

Exercised Options: $49,994,289

Current Obligation: $49,329,916

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862008G3005

IDV Type: IDC

Timeline