Northrop Grumman awarded $30.7M for B-2 Stealth aircraft structural component maintenance and repair

Contract Overview

Contract Amount: $30,784,146 ($30.8M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2001-01-10

End Date: 2020-12-31

Contract Duration: 7,295 days

Daily Burn Rate: $4.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200104!000046!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N!*!N!SD11 !20010110!20011231!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!22412!037!06!EL SEGUNDO !LOS ANGELES !CALIFORNIA!+000014288000!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !811219!*!*!5!B!M!A!*!*!*!B!*!*!A! !D !N!R!1!001!N!1A!C!Y!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 $30.8 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200104!000046!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N!*!N!SD11 !20010110!20011231!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!22412!037!06!EL SEGUNDO !LOS A… Key points: 1. Contract awarded for sustainment of critical B-2 bomber components, indicating a focus on maintaining aging fleet readiness. 2. Sole-source award suggests limited market availability for specialized B-2 component repair services. 3. Long contract duration (7295 days) points to long-term sustainment needs for the B-2 program. 4. Contract type (Cost Plus Award Fee) allows for flexibility but requires robust oversight to manage costs. 5. Geographic concentration of contractor in California may indicate regional expertise or existing infrastructure for this specific aircraft. 6. High dollar value for maintenance suggests significant operational costs associated with the B-2 platform.

Value Assessment

Rating: fair

The contract value of $30.7 million over approximately 20 years represents a significant investment in maintaining the B-2 bomber fleet. Benchmarking this specific type of specialized aircraft structural component repair is challenging due to the unique nature of the B-2 platform and its limited operational lifespan. However, the cost-plus award fee structure implies that while the government aims to incentivize performance, there is inherent risk in cost overruns if not managed tightly. Without more granular data on the specific services rendered and comparable sustainment costs for other high-value, low-production aircraft, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one responsible source, Northrop Grumman Systems Corporation, was determined to be capable of fulfilling the requirement. This is common for highly specialized systems like the B-2 bomber, where the original equipment manufacturer often possesses unique technical knowledge, proprietary data, and specialized facilities required for maintenance and repair. The lack of competition means that price discovery through market forces was not utilized, placing a greater emphasis on the government's negotiation and oversight capabilities.

Taxpayer Impact: A sole-source award limits the government's ability to leverage competitive bidding to secure the best possible pricing for taxpayers. This necessitates a strong focus on fair and reasonable pricing negotiations and vigilant contract administration to prevent potential cost inefficiencies.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the B-2 Spirit stealth bomber, ensuring the continued operational readiness of this strategic asset. Services delivered include maintenance and repair of structural components for the B-2 aircraft, crucial for flight safety and mission capability. The geographic impact is primarily centered around the operational bases of the B-2 fleet, though the contractor's facility is in California. Workforce implications include the employment of highly skilled technicians and engineers specializing in advanced aerospace structures and stealth technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pricing, potentially leading to higher costs for taxpayers.
Cost-plus award fee structure requires diligent oversight to prevent cost overruns.
Long contract duration increases the risk of scope creep or evolving requirements not being adequately addressed.
Dependence on a single contractor for critical B-2 components creates a single point of failure risk.

Positive Signals

Award to Northrop Grumman, the original manufacturer, ensures access to specialized knowledge and proprietary data for B-2 maintenance.
Focus on maintenance and repair indicates a commitment to sustaining the operational readiness of a key strategic asset.
The contract duration suggests a long-term strategic partnership for B-2 sustainment.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance, repair, and overhaul (MRO) for a highly specialized platform. The B-2 bomber is a unique strategic asset, and its sustainment requires specialized capabilities. The market for such services is inherently limited, often dominated by the original equipment manufacturers due to proprietary knowledge and unique tooling. Comparable spending benchmarks are difficult to establish given the B-2's unique status, but overall defense spending on aircraft sustainment represents a significant portion of the military's budget.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the specialized nature of B-2 component maintenance and repair, it is likely that the prime contractor, Northrop Grumman, performs the majority of the work. There may be opportunities for small businesses to participate as subcontractors, particularly for specific components or services, but the primary award is to a large aerospace corporation. The impact on the small business ecosystem would depend on the extent to which Northrop Grumman utilizes subcontracting, which is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, likely managed by specific program offices responsible for the B-2 bomber fleet. As a Cost Plus Award Fee (CPAF) contract, performance metrics and cost controls are critical areas of oversight. Accountability measures would be tied to achieving defined performance objectives and managing costs within negotiated parameters. Transparency may be limited due to the sole-source nature and the classified aspects associated with strategic aircraft programs. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

B-2 Bomber Sustainment Program
Air Force Aircraft Maintenance and Repair Contracts
Aerospace Component Manufacturing and Repair
Defense Contractor Support Services

Risk Flags

Sole Source Award
Cost Plus Award Fee Contract Type
Long Contract Duration
Specialized Aircraft Component Maintenance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.8 million to NORTHROP GRUMMAN SYSTEMS CORP. 200104!000046!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N!*!N!SD11 !20010110!20011231!065390122!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!8900 WASHINGTON BLVD !PICO RIVERA !CA!90660!22412!037!06!EL SEGUNDO !LOS ANGELES !CALIFORNIA!+000014288000!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !811219!*!*!5!B!M!A!*!*!*!B!*!*!A!

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 $30.8 million.

What is the period of performance?

Start: 2001-01-10. End: 2020-12-31.

What is Northrop Grumman's track record with B-2 bomber sustainment contracts?

Northrop Grumman Systems Corporation, as the original manufacturer of the B-2 Spirit stealth bomber, has a long-standing and integral role in its sustainment. The company has historically been responsible for the design, production, and ongoing support of the B-2 fleet. This includes a range of services from depot-level maintenance and component repair to upgrades and modifications. Their extensive experience with the platform, including proprietary knowledge of its complex systems and stealth technologies, positions them as the primary, and often sole, provider for critical sustainment activities. Past performance data, while not detailed here, would likely show a consistent involvement in ensuring the operational readiness of the B-2, though specific contract values and performance outcomes would vary over time.

How does the $30.7 million value compare to other B-2 sustainment efforts?

The $30.7 million awarded for this specific contract, covering maintenance and repair of structural components, represents a portion of the overall sustainment costs for the B-2 bomber fleet. The B-2 is an extremely complex and aging aircraft, and its total lifecycle sustainment costs are substantial, often running into billions of dollars over its operational life. This particular award, spanning nearly 20 years, suggests a long-term, ongoing need for specialized structural maintenance. Without access to a comprehensive database of all B-2 sustainment contracts and their specific scopes of work, a direct comparison of this $30.7 million figure to other individual sustainment efforts is difficult. However, it is indicative of the significant and continuous investment required to maintain such a unique and advanced strategic asset.

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

The primary risks associated with this sole-source contract stem from the lack of competition and the specialized nature of the work. Firstly, the absence of competitive bidding means there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher costs for the government and taxpayers. Secondly, reliance on a single provider, Northrop Grumman, creates a dependency that could be exploited if the contractor faces financial difficulties, operational disruptions, or decides to increase prices significantly in future negotiations. Thirdly, the Cost Plus Award Fee (CPAF) structure, while offering flexibility, carries inherent risks of cost overruns if not meticulously managed and overseen by the contracting agency. Finally, the long duration of the contract increases the potential for scope creep or unforeseen technical challenges that could escalate costs.

How effective is the Cost Plus Award Fee (CPAF) structure for this type of specialized maintenance?

The Cost Plus Award Fee (CPAF) structure is often employed for complex, high-risk, or developmental contracts where the scope of work may not be precisely defined at the outset, or where performance incentives are crucial. For specialized aircraft maintenance like that required for the B-2's structural components, CPAF can be effective if well-structured. It allows the contractor to be reimbursed for allowable costs while providing an incentive fee based on achieving specific performance objectives (e.g., quality, timeliness, technical performance). This structure aims to balance the need for flexibility in addressing unforeseen issues with the government's desire for cost control and high-quality outcomes. However, its effectiveness is heavily dependent on the clarity of the performance criteria, the rigor of the government's oversight, and the fairness of the award fee determination process.

What are the historical spending patterns for B-2 bomber sustainment?

Historical spending patterns for B-2 bomber sustainment reflect the aircraft's advanced technology, unique capabilities, and aging platform status. As a strategic asset, the B-2 program has consistently required significant investment for its upkeep. Spending typically encompasses a wide range of activities, including depot maintenance, component repair and replacement, software updates, system modifications, and logistics support. Given the B-2's low production numbers and high operational tempo, sustainment costs per aircraft are exceptionally high compared to more common platforms. Annual spending can fluctuate based on major maintenance cycles, upgrade programs, and readiness requirements. Over the decades, the total investment in B-2 sustainment has amounted to billions of dollars, underscoring the long-term financial commitment associated with operating such a specialized and critical defense asset.

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 AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline