Northrop Grumman awarded $20.78M for B-2 Stealth aircraft components, highlighting sole-source procurement for specialized defense needs

Contract Overview

Contract Amount: $20,779,164 ($20.8M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2001-01-10

End Date: 2009-11-23

Contract Duration: 3,239 days

Daily Burn Rate: $6.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200104!000044!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N!*!N!SD10 !20010110!20011231!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!56924!037!06!PICO RIVERA !LOS ANGELES !CALIFORNIA!+000005389200!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!*!*!5!B!S!C!*!*!*!B!*!*!N!Z!C !U!R!1!001!N!1G!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.8 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200104!000044!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N!*!N!SD10 !20010110!20011231!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!56924!037!06!PICO RIVERA !LOS A… Key points: 1. Contract awarded for critical aircraft components, suggesting a focus on specialized, high-value defense systems. 2. Sole-source procurement indicates a lack of readily available alternatives or a need for specific contractor expertise. 3. The contract duration of over 8 years suggests a long-term requirement for sustainment or upgrade of existing assets. 4. Awarded to Northrop Grumman, a major defense contractor with established capabilities in advanced aircraft programs. 5. The contract type (Cost Plus Award Fee) incentivizes performance while allowing for cost flexibility. 6. Geographic location of the contractor in California may have implications for regional economic impact and supply chain.

Value Assessment

Rating: fair

The contract value of $20.78 million for aircraft components over an 8-year period appears moderate for a sole-source defense contract of this nature. Benchmarking is difficult without specific details on the components and services provided. However, the Cost Plus Award Fee (CPAF) structure allows for performance incentives, which can be a value driver if managed effectively. The lack of competition inherently limits price discovery, making it harder to definitively assess value for money compared to a competitive bid.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of essential parts or services. The lack of competition means that taxpayers do not benefit from the price reductions that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the lowest possible price, potentially leading to higher costs for taxpayers. It also reduces opportunities for other businesses to compete for this work.

Public Impact

The primary beneficiaries are the U.S. Air Force and the B-2 Stealth bomber program, ensuring the continued operational readiness of a critical strategic asset. Services delivered likely include the manufacturing, assembly, or sustainment of specialized aircraft components for the B-2 bomber. The geographic impact is concentrated around the contractor's facility in Pico Rivera, California, supporting local employment and the regional aerospace supply chain. Workforce implications include the employment of skilled engineers, technicians, and manufacturing personnel at Northrop Grumman.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits price competition, potentially increasing costs for taxpayers.
Cost Plus Award Fee contracts can sometimes lead to cost overruns if not closely monitored.
Reliance on a single contractor for critical components can create supply chain vulnerabilities.
Lack of transparency inherent in sole-source awards makes independent value assessment challenging.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests access to specialized expertise and proven capabilities.
The long contract duration indicates a stable, long-term need for these components, contributing to program stability.
Performance incentives within the CPAF structure can drive contractor efficiency and quality.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components. The market for specialized defense components is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers, frequently leading to sole-source or limited competition awards. Spending in this area is critical for maintaining national security assets like the B-2 bomber. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the components, but large defense platforms often involve multi-million dollar sustainment and upgrade contracts.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, it is unlikely to have direct subcontracting opportunities specifically designated for small businesses unless Northrop Grumman voluntarily includes them in its subcontracting plan. The focus is on specialized capabilities typically held by larger, established firms in the defense industrial base.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. As a Cost Plus Award Fee contract, performance metrics and cost controls would be key areas of oversight. Transparency may be limited due to the sole-source nature, but contract modifications, performance reports, and financial audits would be subject to government review. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

B-2 Spirit Program
Aircraft Component Manufacturing
Defense Logistics Agency (DLA) Support
Air Force Sustainment Contracts
Aerospace Parts Procurement

Risk Flags

Sole-source award
Potential for higher costs due to lack of competition
Supply chain dependency on a single contractor
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to NORTHROP GRUMMAN SYSTEMS CORP. 200104!000044!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N!*!N!SD10 !20010110!20011231!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!56924!037!06!PICO RIVERA !LOS ANGELES !CALIFORNIA!+000005389200!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!*!*!5!B!S!C!*!*!*!B!*!*!N!

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 $20.8 million.

What is the period of performance?

Start: 2001-01-10. End: 2009-11-23.

What is the specific nature of the aircraft components being procured under this contract?

The provided data indicates the contract is for 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS' under the PSC code '1680' and specifically mentions 'B-2 STEALTH' in the Product Service Code description. This suggests the components are specialized parts, accessories, or sub-assemblies critical for the operation and maintenance of the B-2 Spirit stealth bomber. Without more granular data, the exact components (e.g., avionics, structural parts, engine accessories) remain unspecified, but their designation for the B-2 platform implies high-technology, high-reliability requirements.

How does the $20.78 million contract value compare to historical spending on B-2 components?

The provided data shows a single award of $20.78 million with a start date of January 10, 2001, and an end date of November 23, 2009 (duration of 3239 days, approximately 8.8 years). To compare this to historical spending, one would need access to a broader dataset of all contracts related to B-2 components over its lifecycle. This single award represents a portion of the overall sustainment and upgrade costs for the B-2 fleet. Without a comprehensive view of all related contracts, it's difficult to determine if this specific award is high or low relative to the program's historical expenditure patterns. However, given the B-2's advanced nature and limited fleet size, component costs can be substantial.

What are the key performance metrics and award fee criteria for this Cost Plus Award Fee (CPAF) contract?

The specific performance metrics and award fee criteria for this contract are not detailed in the provided data. However, for a CPAF contract, these typically revolve around factors such as meeting delivery schedules, achieving specified quality standards, cost control performance, technical execution, and overall program management effectiveness. The 'Award Fee' component means that Northrop Grumman could earn additional profit (beyond the cost reimbursement) based on the government's subjective evaluation of their performance against these pre-defined criteria. The government would periodically assess performance and determine the amount of award fee earned.

What is Northrop Grumman's track record with the B-2 program and similar sole-source defense contracts?

Northrop Grumman is the prime contractor for the B-2 Spirit program, responsible for its development, production, and sustainment. This deep involvement implies a long-standing and extensive track record with the platform and its complex systems. As a major defense contractor, Northrop Grumman routinely handles sole-source and limited-competition contracts for specialized defense systems and components where unique capabilities or established expertise are required. Their history with the B-2 suggests they possess the necessary technical knowledge, manufacturing capabilities, and security clearances to fulfill such requirements, making them a logical, albeit sole, source for critical B-2 components.

Are there any identified risks associated with this sole-source contract for critical aircraft components?

Yes, several risks are associated with this sole-source contract. Firstly, the lack of competition inherently limits price negotiation leverage for the government, potentially leading to higher costs than if the contract were competed. Secondly, reliance on a single supplier for critical components can create supply chain vulnerabilities; any disruption at Northrop Grumman (e.g., production issues, financial instability, geopolitical events) could directly impact the B-2's operational readiness. Thirdly, without competitive pressure, there might be less incentive for the contractor to innovate or aggressively pursue cost efficiencies, although the award fee structure aims to mitigate this. Finally, ensuring adequate government oversight is crucial to validate costs and performance in a sole-source environment.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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