Northrop Grumman awarded $32.3M for aircraft structural component repair, a sole-source contract

Contract Overview

Contract Amount: $32,332,612 ($32.3M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2000-02-08

End Date: 2005-12-31

Contract Duration: 2,153 days

Daily Burn Rate: $15.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200005!5700!000117!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!*!SD04 !20000208!20001231!065390122!008255408!008255408!N!76823!NORTHROP GRUMMAN CORPORATION !8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!56924!037!06!PICO RIVERA !LOS ANGELES !CALIFORNIA!0001!+000027934532!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !3728!5!B!S!A!B!N!Z!D !U!V!1!001!N!1G!Z!Y!Z!* !* !N!C!*!Z!Z!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200005!5700!000117!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!*!SD04 !20000208!20001231!065390122!008255408!008255408!N!76823!NORTHROP GRUMMAN CORPORATION !8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!56924!037!06!PICO RIVERA !LOS… Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant duration of over 2100 days suggests a long-term need for these services. 3. Focus on repair and maintenance indicates a reliance on existing platforms rather than new acquisitions. 4. The contract is for a critical component of the B-2 Stealth bomber program. 5. Geographic concentration in California for the contractor's facility.

Value Assessment

Rating: questionable

The contract's value of $32.3 million for aircraft structural component repair is difficult to benchmark without more detailed cost breakdowns. As a sole-source award, there's limited public data to compare pricing against competitive bids. The cost-plus incentive fee structure suggests an attempt to control costs, but the overall value proposition is obscured by the lack of competition. Further analysis of the specific repair tasks and their associated costs would be needed to fully assess value for money.

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, was solicited. This approach bypasses the typical competitive bidding process. While sole-source awards can be justified for specialized capabilities or urgent needs, they limit price discovery and may result in higher costs for the government compared to a fully competed contract. The absence of multiple bidders means taxpayers do not benefit from the cost savings that competition often drives.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these aircraft repair services. Without competitive pressure, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the B-2 Stealth bomber, ensuring aircraft readiness. Services delivered include the maintenance and repair of structural components for aircraft. The geographic impact is primarily centered around the contractor's facility in Pico Rivera, California, and the operational bases of the B-2 fleet. Workforce implications include skilled labor in aerospace manufacturing and repair within the Los Angeles area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in cost breakdown for a sole-source contract makes value assessment difficult.
Long contract duration (over 5 years) could indicate a lack of market alternatives or a sustained, high-cost requirement.
Contract is tied to a specific, high-value platform (B-2 Stealth), potentially creating vendor lock-in.

Positive Signals

Contract addresses critical maintenance for a strategic asset (B-2 Stealth bomber), ensuring operational capability.
Cost-plus incentive fee structure aims to align contractor performance with government cost objectives.
Contractor is a known entity with experience in complex aerospace systems.
The contract supports specialized technical skills and jobs in the aerospace sector.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance and repair. The market for such specialized services is often dominated by original equipment manufacturers or highly specialized MRO (Maintenance, Repair, and Overhaul) providers due to the complexity and proprietary nature of advanced aircraft systems like the B-2 bomber. Comparable spending benchmarks are difficult to establish due to the unique nature of the B-2 platform and the sole-source award.

Small Business Impact

This contract does not appear to involve small business set-asides. As a sole-source award to a large corporation, there are no direct subcontracting opportunities for small businesses mandated by this specific contract vehicle. The impact on the small business ecosystem is likely minimal, as the work is performed by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature, oversight would focus on ensuring the contractor meets the terms of the Cost Plus Incentive Fee contract, manages costs effectively, and delivers the required repair services to specification. Transparency is limited due to the lack of competitive bidding, but contract performance reviews and audits would be standard oversight mechanisms.

Related Government Programs

B-2 Bomber Sustainment Programs
Aerospace Component Repair Contracts
Defense Contractor Maintenance Services
Air Force Aircraft Structural Repair

Risk Flags

Sole-source award
Lack of competitive bidding
Limited cost transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to NORTHROP GRUMMAN SYSTEMS CORP. 200005!5700!000117!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!*!SD04 !20000208!20001231!065390122!008255408!008255408!N!76823!NORTHROP GRUMMAN CORPORATION !8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!56924!037!06!PICO RIVERA !LOS ANGELES !CALIFORNIA!0001!+000027934532!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !3728!5!B!S!A!B!N!Z!D !U!V!

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $32.3 million.

What is the period of performance?

Start: 2000-02-08. End: 2005-12-31.

What is the specific nature of the 'structural components' being repaired for the B-2 Stealth?

The data provided indicates the contract is for 'MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS' related to the B-2 Stealth program. While the exact components are not detailed in the summary data, 'structural components' generally refer to the airframe, wings, fuselage, and other load-bearing elements of the aircraft. For a sophisticated platform like the B-2, this could involve complex composite materials, specialized alloys, and integrated systems requiring highly technical repair processes to maintain the aircraft's stealth capabilities and structural integrity. The repair likely addresses wear and tear, damage from operations, or aging of these critical parts.

How does the Cost Plus Incentive Fee (CPIF) structure work in this contract?

A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and receives a fee that is adjusted based on the achievement of predetermined performance objectives. In this case, the government and Northrop Grumman would have agreed on a target cost and a target fee. If the contractor completes the work for less than the target cost, both the government and the contractor share in the savings (incentive). Conversely, if the costs exceed the target, the fee is reduced. The 'incentive' aspect is designed to motivate the contractor to control costs while meeting performance standards, such as delivery schedules or quality requirements, which are crucial for maintaining the B-2's operational readiness.

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

Sole-source awards for critical aircraft maintenance, like this one for the B-2 Stealth, carry several risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, meaning taxpayers may overpay. It also reduces the incentive for the sole provider to innovate or improve efficiency, as they face no direct market pressure. Furthermore, it creates a dependency on a single contractor, potentially leading to 'vendor lock-in' where switching providers becomes prohibitively expensive or technically infeasible. This dependency can also give the contractor significant leverage in future negotiations.

What is the historical spending trend for this type of service with Northrop Grumman or for the B-2 program?

The provided data snippet represents a single contract award from 1999/2000 with an end date in 2005. It does not provide historical spending trends. To assess historical spending, one would need to analyze contract data over a longer period, looking at all contracts awarded to Northrop Grumman (or its predecessors) for B-2 sustainment, maintenance, and repair, as well as compare this spending to other similar aircraft programs. Without access to a broader dataset, it's impossible to determine if this $32.3 million award represents an increase, decrease, or stable level of spending for these services.

Are there any alternative contractors capable of performing this specialized repair work?

Given that the B-2 Stealth bomber is a highly specialized and technologically advanced aircraft, the pool of contractors capable of performing depot-level maintenance and repair of its structural components is likely very limited. Northrop Grumman, as the original manufacturer or a key integrator of the B-2 system, possesses unique knowledge, proprietary data, and specialized tooling required for such work. While other aerospace companies might have general repair capabilities, they may lack the specific certifications, security clearances, or technical expertise necessary for the B-2. This limited capability landscape often necessitates sole-source or limited-competition awards for such critical sustainment activities.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 3520 E AVE M, PALMDALE, CA, 93550

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline