DoD's $47.7M Northrop Grumman Contract for Aircraft Component Support Faces Scrutiny

Contract Overview

Contract Amount: $47,776,816 ($47.8M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2015-03-01

End Date: 2016-04-29

Contract Duration: 425 days

Daily Burn Rate: $112.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF PERFORMANCE BASED LOGISTICS (PBL) B-2 CONTRACTOR LOGISTICS SUPPORT (CLS) FOR CONTRACTOR INVENTORY CONTROL POINT (C-ICP), CLASSIFIED AIRCRAFT COMPONENT SUPPORT (CACS), AND ADAPTABLE COMMUNICATION SUITE (ACS) SUSTAINMENT.

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $47.8 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF PERFORMANCE BASED LOGISTICS (PBL) B-2 CONTRACTOR LOGISTICS SUPPORT (CLS) FOR CONTRACTOR INVENTORY CONTROL POINT (C-ICP), CLASSIFIED AIRCRAFT COMPONENT SUPPORT (CACS), AND ADAPTABLE COMMUNICATION SUITE (ACS) SUSTAINMENT. Key points: 1. The contract awarded to Northrop Grumman Systems Corp for logistics support of aircraft components is a significant expenditure. 2. Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars. 3. The sector, Aircraft Manufacturing, often involves complex and specialized components, making oversight crucial. 4. The firm fixed-price contract type aims to control costs, but the absence of competition limits price discovery.

Value Assessment

Rating: questionable

The contract's value of $47.7 million is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to similar logistics support contracts for aircraft components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may be paying more than necessary for these critical aircraft component support services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Department of the Air Force relies on this contractor for essential aircraft component support. The long-term sustainment of classified aircraft components is critical for national security. The firm fixed-price nature of the contract is intended to cap costs, but the sole-source award undermines this benefit.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Firm fixed-price contract
Essential logistics support for aircraft

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically focusing on logistics and sustainment for critical aircraft components. Benchmarks for similar sole-source logistics contracts are difficult to establish without competitive data.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and adequate performance. Accountability mechanisms should be robust given the lack of competitive pressure.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited price transparency
Dependency on a single supplier
National security implications of component support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.8 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF PERFORMANCE BASED LOGISTICS (PBL) B-2 CONTRACTOR LOGISTICS SUPPORT (CLS) FOR CONTRACTOR INVENTORY CONTROL POINT (C-ICP), CLASSIFIED AIRCRAFT COMPONENT SUPPORT (CACS), AND ADAPTABLE COMMUNICATION SUITE (ACS) SUSTAINMENT.

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 $47.8 million.

What is the period of performance?

Start: 2015-03-01. End: 2016-04-29.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. Without further details on the specific components and services, it's challenging to ascertain the validity of this justification. A thorough review would be needed to confirm if alternatives were explored or if the sole-source designation is truly warranted.

How is the government ensuring fair pricing without competition?

Ensuring fair pricing without competition is challenging. The government likely relies on historical pricing data, should-cost analyses, and negotiation strategies. However, the absence of market-driven price discovery inherently limits the government's leverage. Robust auditing and cost-reimbursement controls, if applicable, would be crucial to mitigate risks of inflated costs.

What is the long-term strategy for acquiring these services to ensure better value?

The long-term strategy should focus on fostering competition for future requirements. This could involve breaking down the contract into smaller, more competitive lots, encouraging new entrants into the market, or developing government in-house capabilities. A review of the existing contract's performance and cost trends should inform decisions about future acquisition strategies to maximize value and reduce reliance on sole-source awards.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $77,045,238

Exercised Options: $77,045,238

Current Obligation: $47,776,816

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $829,131

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA861614D6060

IDV Type: IDC

Timeline