DoD's $123.7M Aircraft Manufacturing Contract Awarded to Northrop Grumman Systems Corp

Contract Overview

Contract Amount: $123,709,279 ($123.7M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2012-12-17

End Date: 2016-11-15

Contract Duration: 1,429 days

Daily Burn Rate: $86.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CY 13 PROGRAMMED DEPOT MAINTENANCE DELIVERY ORDER

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $123.7 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: CY 13 PROGRAMMED DEPOT MAINTENANCE DELIVERY ORDER Key points: 1. Significant contract value of $123.7 million for depot maintenance. 2. Sole-source award to Northrop Grumman Systems Corp. raises competition concerns. 3. Aircraft manufacturing sector is critical for national defense readiness. 4. Potential for cost savings through competitive bidding on future contracts.

Value Assessment

Rating: questionable

The contract value of $123.7 million is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar depot maintenance contracts.

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.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for depot maintenance services.

Public Impact

Ensures continued maintenance of critical Air Force aircraft. Supports jobs within the aerospace and defense industry. Potential for increased costs due to lack of competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for overpricing

Positive Signals

Ensures critical maintenance is performed
Supports established contractor relationship

Sector Analysis

This contract falls within the aircraft manufacturing sector, specifically for programmed depot maintenance. Spending in this area is crucial for maintaining the operational readiness of military aviation assets.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense obtained the best possible value and that the contractor is meeting all performance requirements.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $123.7 million to NORTHROP GRUMMAN SYSTEMS CORP. CY 13 PROGRAMMED DEPOT MAINTENANCE DELIVERY ORDER

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 $123.7 million.

What is the period of performance?

Start: 2012-12-17. End: 2016-11-15.

What is the historical cost performance of Northrop Grumman Systems Corp. on similar depot maintenance contracts?

Analyzing Northrop Grumman's past performance on comparable contracts would provide insight into their pricing strategies and efficiency. This historical data could help determine if the current $123.7 million award is reasonable or if there are indications of inflated costs due to the lack of competition.

What are the risks associated with a sole-source award for critical aircraft maintenance?

Sole-source awards carry risks such as potential overpricing, reduced innovation, and a lack of accountability if the contractor becomes complacent. For critical maintenance, there's also a risk of dependency on a single provider, which could be problematic if performance issues arise or if the contractor faces financial instability.

How effective is this contract in ensuring the long-term readiness of the Air Force's aircraft fleet?

The effectiveness hinges on Northrop Grumman's ability to deliver high-quality maintenance within the agreed timeframe and budget. While the contract ensures a provider, the lack of competition raises questions about whether it represents the most cost-effective approach to achieving optimal fleet readiness and sustainability.

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 (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: $179,342,675

Exercised Options: $179,342,675

Current Obligation: $123,709,279

Subaward Activity

Number of Subawards: 75

Total Subaward Amount: $30,754,318

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline