DoD's B-2 PBL Sustaining Engineering contract awarded to Northrop Grumman for $33.8M
Contract Overview
Contract Amount: $33,852,257 ($33.9M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2016-01-01
End Date: 2018-03-16
Contract Duration: 805 days
Daily Burn Rate: $42.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF CY16 B-2 PERFORMANCE-BASED LOGISTICS (PBL) SUSTAINING ENGINEERING (SE) SUSTAINMENT.
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $33.9 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF CY16 B-2 PERFORMANCE-BASED LOGISTICS (PBL) SUSTAINING ENGINEERING (SE) SUSTAINMENT. Key points: 1. Contract awarded to a single, established prime contractor. 2. Performance-based logistics (PBL) aims for improved sustainment outcomes. 3. Long-term contract duration of 805 days. 4. Focus on sustaining engineering for critical aircraft components.
Value Assessment
Rating: fair
The contract value of $33.8M for sustaining engineering over approximately 2.6 years appears reasonable given the specialized nature of B-2 bomber support. Benchmarking against similar complex aerospace sustainment contracts would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs compared to a competitive environment. The justification for sole-source is critical.
Taxpayer Impact: Without competition, taxpayers may be paying a premium for sustaining engineering services, as there was no market pressure to drive down costs.
Public Impact
Ensures continued operational readiness of the B-2 bomber fleet. Supports high-skilled jobs in aerospace engineering and maintenance. Potential for cost overruns due to lack of competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Long contract duration without clear performance metrics
Positive Signals
- Performance-based logistics approach
- Focus on critical sustainment
- Experienced contractor
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing and sustainment. Spending on sustaining engineering for aging fleets is common but requires careful oversight to ensure value for money, especially when sole-sourced.
Small Business Impact
This contract does not appear to involve small business participation, as it is a sole-source award to a large prime contractor. Opportunities for small businesses are likely limited to subcontracting roles, if any.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and effective performance. The Department of the Air Force must actively monitor Northrop Grumman's delivery and costs to mitigate risks associated with non-competitive awards.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for cost creep over the contract duration.
- Reliance on a single contractor for critical sustainment.
- Lack of transparency in pricing without competition.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.9 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF CY16 B-2 PERFORMANCE-BASED LOGISTICS (PBL) SUSTAINING ENGINEERING (SE) 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 $33.9 million.
What is the period of performance?
Start: 2016-01-01. End: 2018-03-16.
What was the justification for awarding this contract sole-source, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. For this B-2 sustaining engineering contract, the justification likely relates to Northrop Grumman's intimate knowledge of the aircraft's complex systems and existing support infrastructure. However, a thorough review should confirm that no viable competitive alternatives were overlooked and that the pricing reflects a fair and reasonable cost given the circumstances.
How does the performance-based logistics (PBL) structure ensure cost-effectiveness and risk mitigation for sustaining engineering?
A PBL approach aims to incentivize the contractor to achieve specific performance outcomes (e.g., system availability, reliability) rather than simply delivering labor hours. For sustaining engineering, this means Northrop Grumman is rewarded for keeping the B-2 systems operational and efficient. This shifts risk to the contractor and can lead to cost savings through proactive maintenance and innovation, provided the performance metrics are well-defined and measurable.
What is the long-term financial implication of sustaining engineering contracts for aging platforms like the B-2?
Sustaining engineering for aging platforms represents a significant, ongoing financial commitment. As aircraft age, maintenance becomes more complex and costly, requiring specialized expertise and parts. Without effective cost controls and competitive pressure, these contracts can become a substantial drain on defense budgets over decades. Strategic decisions about fleet modernization versus extended sustainment are critical for long-term fiscal health.
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: $33,852,257
Exercised Options: $33,852,257
Current Obligation: $33,852,257
Subaward Activity
Number of Subawards: 59
Total Subaward Amount: $11,545,942
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
Start Date: 2016-01-01
Current End Date: 2018-03-16
Potential End Date: 2018-03-16 00:00:00
Last Modified: 2022-06-06
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