Northrop Grumman awarded $14M for B-2 Stealth aircraft components, highlighting a sole-source contract for specialized parts

Contract Overview

Contract Amount: $14,071,426 ($14.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2000-09-30

End Date: 2005-02-25

Contract Duration: 1,609 days

Daily Burn Rate: $8.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200012!5700!000438!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!*!SD05 !20000930!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!+000000100000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !3728!5!B!S!C!B!N!Z!C !U!R!1!001!N!1G!A!N!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200012!5700!000438!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!*!SD05 !20000930!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 for critical B-2 Stealth aircraft components, indicating specialized needs. 2. Sole-source award suggests limited market availability or unique contractor capabilities. 3. Long contract duration (over 4 years) implies ongoing support requirements. 4. Delivery order under a larger contract structure points to a phased acquisition approach. 5. Contract value of $14M falls within a moderate spending range for defense components. 6. Geographic concentration in California for the contractor's facility.

Value Assessment

Rating: fair

The contract value of $14,071,426.48 for aircraft accessories and components appears reasonable given the specialized nature of B-2 Stealth parts. However, without a competitive bidding process, it is difficult to definitively benchmark the value against market rates. The contract type, Time and Materials, can sometimes lead to cost overruns if not closely managed. Comparing this to similar sole-source awards for highly specialized aerospace components would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Corporation, was solicited. This approach is typically used when a product or service is unique and cannot be obtained from multiple sources, or when there's a compelling justification for a single provider. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government relies on the contractor's proposed pricing and negotiation to ensure fair value.

Public Impact

The primary beneficiary is the U.S. Air Force, ensuring the continued operational readiness of the B-2 Stealth bomber fleet. Services delivered include the provision of critical aircraft accessories and components essential for aircraft maintenance and repair. Geographic impact is national, supporting a key strategic defense asset, with contractor operations based in California. Workforce implications include supporting specialized manufacturing and technical roles within Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs.
Time and Materials contract type carries inherent risk of cost escalation if not managed stringently.
Lack of transparency in the sole-source justification process.
Long-term reliance on a single supplier for critical components.

Positive Signals

Ensures availability of specialized components for a critical national defense asset (B-2 Stealth).
Leverages the unique expertise of Northrop Grumman, the original manufacturer or a highly specialized supplier.
Contract provides sustained support, contributing to the longevity and operational capability of the B-2 fleet.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components. The market for B-2 Stealth components is highly specialized and likely dominated by a few key players, if not solely the original equipment manufacturer or its authorized suppliers. Spending in this niche is driven by the sustainment and modernization needs of advanced military aircraft, where unique technological requirements justify higher costs and limited competition.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large defense contractor, there are no direct subcontracting opportunities for small businesses explicitly mandated within this specific award. The overall impact on the small business ecosystem is minimal for this particular contract, though Northrop Grumman may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures would include performance monitoring, delivery schedules, and quality control. Transparency is limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B-2 Spirit Sustainment Program
Air Force Aircraft Component Procurement
Defense Logistics Agency (DLA) Aviation Support Contracts
Northrop Grumman Defense Contracts

Risk Flags

Sole Source Justification
Time and Materials Contract Type
Lack of Competitive Bidding
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to NORTHROP GRUMMAN SYSTEMS CORP. 200012!5700!000438!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!*!SD05 !20000930!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!+000000100000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !3728!5!B!S!C!B!N!Z!C !U!R!

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 $14.1 million.

What is the period of performance?

Start: 2000-09-30. End: 2005-02-25.

What is Northrop Grumman's track record with sole-source contracts for B-2 components?

Northrop Grumman, as the prime contractor for the B-2 Spirit program, has a long history of sole-source engagements for specialized components and sustainment services. These awards are often justified by proprietary knowledge, unique manufacturing capabilities, or the need to maintain the integrity of highly complex systems. While specific data on all sole-source awards is not always public, it is understood that for critical, low-volume, or technologically advanced parts for platforms like the B-2, sole-source procurement is a common, albeit scrutinized, practice. The government relies on negotiation and cost analysis to ensure fair pricing in such instances, but the inherent lack of competition remains a point of concern for value optimization.

How does the $14M value compare to other B-2 component contracts?

The $14,071,426.48 value for this specific delivery order is a moderate sum within the broader context of B-2 sustainment. Larger contracts for the B-2 program can run into hundreds of millions or even billions of dollars, covering major overhauls, upgrades, and long-term support. Smaller contracts, often for individual parts or specific services, can be in the tens or hundreds of thousands. This $14M award likely represents a significant batch of components or a specific set of critical parts needed for a period of maintenance or repair. Without access to a comprehensive database of all B-2 component contracts, a precise benchmark is difficult, but it appears to be a substantial, yet not program-defining, expenditure.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract are centered around cost and potential lack of innovation. Without competition, there is less pressure on Northrop Grumman to offer the lowest possible price, potentially leading to overpayment. The Time and Materials (T&M) contract type adds another layer of risk, as costs can escalate if labor hours or material costs are higher than anticipated and not rigorously managed. Furthermore, a sole-source arrangement can stifle innovation, as there is no external market pressure to develop more efficient or cost-effective solutions. Dependence on a single supplier also creates a risk of supply chain disruption if the contractor faces production issues.

How effective is the Air Force in managing Time and Materials contracts for specialized parts?

The effectiveness of the Air Force in managing Time and Materials (T&M) contracts for specialized parts like those for the B-2 program can vary. T&M contracts are inherently riskier for the government because the final cost is not fixed upfront. Effective management requires robust oversight, including detailed tracking of labor hours, material costs, and justification for each expenditure. The Air Force employs contracting officers and technical representatives to monitor these aspects. However, for highly specialized components where technical expertise resides primarily with the contractor, oversight can be challenging. Success often depends on the contractor's integrity and the government's ability to perform thorough audits and negotiations.

What are historical spending patterns for B-2 aircraft components?

Historical spending patterns for B-2 aircraft components reflect the lifecycle of a highly advanced, strategic asset. Initial procurement costs were immense. As the aircraft aged, spending shifted towards sustainment, maintenance, repair, and upgrades. This includes significant investments in spare parts, specialized tooling, technical data, and contractor logistics support. Spending often involves a mix of competitive bids for standardized parts or services and sole-source awards for unique, proprietary components, as seen in this case. The total cost of ownership for the B-2 program over its lifespan is substantial, with component sustainment representing a significant and ongoing portion of the defense budget allocated to this platform.

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: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc.

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