DoD's B-2 Software Sustainment Contract Awarded to Northrop Grumman for $42.2M

Contract Overview

Contract Amount: $42,197,144 ($42.2M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2016-01-01

End Date: 2016-12-31

Contract Duration: 365 days

Daily Burn Rate: $115.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF CY16 PERFORMANCE-BASED LOGISTICS (PBL) B-2 SOFTWARE SUSTAINMENT (SWS).

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $42.2 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF CY16 PERFORMANCE-BASED LOGISTICS (PBL) B-2 SOFTWARE SUSTAINMENT (SWS). Key points: 1. Contract awarded to a single, established vendor, raising questions about competition. 2. Performance-based logistics approach aims for efficiency, but specific metrics are unclear. 3. High value suggests significant reliance on B-2 software sustainment. 4. Sector context: Aircraft manufacturing, a specialized and often concentrated industry.

Value Assessment

Rating: fair

The contract value of $42.2M for one year of sustainment is substantial. Without comparable contract data or detailed performance metrics, assessing its value for money is difficult. The firm fixed-price structure offers some cost certainty.

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 for taxpayers compared to a competitive environment. The rationale for sole-sourcing is not provided.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for B-2 software sustainment services.

Public Impact

Ensures continued operational readiness of the B-2 bomber fleet. Supports critical national defense capabilities. Potential for cost overruns due to lack of competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Unclear performance metrics

Positive Signals

Performance-based logistics approach
Firm fixed-price contract

Sector Analysis

The Department of Defense's spending on aircraft manufacturing, particularly for specialized software sustainment like that for the B-2 bomber, is critical for maintaining aging fleets. Benchmarks are difficult to establish due to the unique nature of such systems.

Small Business Impact

This contract was awarded to Northrop Grumman Systems Corp, a large business. There is no indication of small business participation in this specific contract award.

Oversight & Accountability

Oversight of this sole-source contract is crucial to ensure the government receives fair value. The Department of the Air Force awarded this contract, and its internal processes should monitor performance and costs closely.

Related Government Programs

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

Risk Flags

Sole-source award limits price competition.
Lack of transparency regarding the justification for sole-sourcing.
Potential for cost overruns without competitive pressure.
Performance metrics for PBL are not detailed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.2 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF CY16 PERFORMANCE-BASED LOGISTICS (PBL) B-2 SOFTWARE SUSTAINMENT (SWS).

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 $42.2 million.

What is the period of performance?

Start: 2016-01-01. End: 2016-12-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The provided data does not specify the justification for the sole-source award. Typically, sole-sourcing is employed when only one responsible source can provide the required supplies or services, or in cases of urgent need. Without further documentation, it's impossible to determine the specific rationale, which could impact the perceived value and fairness of the procurement.

How does the performance-based logistics (PBL) structure ensure cost-effectiveness and efficiency for B-2 software sustainment?

A PBL approach aims to incentivize contractor performance by linking payment to achieving specific outcomes or availability metrics, rather than simply reimbursing costs. For B-2 software sustainment, this could mean Northrop Grumman is paid based on software uptime, rapid bug fixes, or successful mission support. However, the effectiveness hinges on clearly defined, measurable, and achievable performance standards.

What is the potential risk to taxpayer funds given the lack of competition for this significant contract?

The primary risk to taxpayer funds stems directly from the absence of competition. Without competing offers, Northrop Grumman may not be incentivized to offer the lowest possible price. This sole-source award could lead to inflated costs, reduced innovation, and a lack of transparency in pricing compared to a fully competed contract.

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: FIRM FIXED PRICE (J)

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

Financial Breakdown

Contract Ceiling: $42,197,144

Exercised Options: $42,197,144

Current Obligation: $42,197,144

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $128,165,740

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA861614D6060

IDV Type: IDC

Timeline