Northrop Grumman Systems Corp awarded $55.2M for Aircraft Manufacturing support to the Air Force

Contract Overview

Contract Amount: $55,208,397 ($55.2M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2014-01-01

End Date: 2017-12-31

Contract Duration: 1,460 days

Daily Burn Rate: $37.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF B-2 CONTRACTOR INVENTORY CONTROL POINT (CICP)

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $55.2 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF B-2 CONTRACTOR INVENTORY CONTROL POINT (CICP) Key points: 1. Contract awarded as a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 2. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 3. The contract duration is 4 years, indicating a medium-term commitment. 4. The contractor, Northrop Grumman Systems Corp, is a major defense contractor. 5. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing. 6. The contract was not competed, raising questions about potential value for money. 7. The contract was awarded in California, a state with a significant defense industrial base.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is challenging without access to the parent IDIQ contract details and other comparable delivery orders. However, the total award amount of $55.2 million over four years suggests a significant investment. The firm fixed-price contract type is generally favorable for the government in managing cost overruns, but the lack of competition means there's no direct price comparison to assess if the pricing is optimal. Further analysis would require understanding the scope of work and comparing it to industry standards for similar aircraft manufacturing support services.

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. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition limits the government's ability to leverage market forces to drive down prices and potentially identify more cost-effective solutions. It also raises concerns about whether the government received the best possible value.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for goods or services, as there was no competitive pressure to ensure the lowest possible price. This can lead to less efficient use of public funds.

Public Impact

The primary beneficiary of this contract is the Department of the Air Force, receiving support for aircraft manufacturing. The services delivered likely involve the manufacturing, assembly, or modification of aircraft components or systems. The geographic impact is concentrated in California, where the contractor is located and likely where the work is performed. This contract supports jobs within the aerospace and defense manufacturing sector, specifically at Northrop Grumman Systems Corp.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency and accountability.
Reliance on a single contractor could create future dependencies.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Northrop Grumman is an established defense contractor with relevant experience.
The contract supports critical Air Force aircraft manufacturing needs.

Sector Analysis

The aircraft manufacturing sector is a critical component of the defense industrial base, characterized by high barriers to entry, complex supply chains, and significant government investment. This contract falls within the broader aerospace and defense industry, which is heavily influenced by government procurement. Spending in this sector is often driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve analyzing other large-scale aircraft manufacturing contracts awarded by the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor is Northrop Grumman Systems Corp, a large defense corporation. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a direct small business set-aside means that opportunities for small businesses to compete directly for this prime contract were limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Inspector General of the Department of Defense may also conduct audits or investigations into contract performance and spending. Transparency is limited due to the sole-source nature of the award. Accountability measures would be embedded in the contract terms and performance metrics, with potential for corrective actions if performance deviates from expectations.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Air Force Contracts
Northrop Grumman Contracts
Indefinite-Delivery/Indefinite-Quantity (IDIQ) Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (inherent in FFP if not managed well)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.2 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF B-2 CONTRACTOR INVENTORY CONTROL POINT (CICP)

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 $55.2 million.

What is the period of performance?

Start: 2014-01-01. End: 2017-12-31.

What is the specific scope of work covered by this delivery order, and how does it relate to the parent IDIQ contract?

The provided data indicates this is a Delivery Order (DO) under an Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract, specifically for 'B-2 CONTRACTOR INVENTORY CONTROL POINT (CICP)'. The NAICS code 336411 suggests it pertains to Aircraft Manufacturing. Without access to the parent IDIQ contract and the specific DO details, the precise scope of work remains unclear. However, it likely involves the provision of parts, components, maintenance, or manufacturing services related to the B-2 bomber program, managed through an inventory control point. The 'CICP' designation implies a focus on managing and supplying necessary inventory for the B-2 aircraft's sustainment or production.

How does the $55.2 million award compare to historical spending on similar aircraft manufacturing support for the B-2 program?

Direct comparison of this $55.2 million delivery order to historical spending on the B-2 program is difficult without more granular data on past contracts for similar support. The B-2 program is a long-standing, complex, and high-cost initiative. This award represents a portion of the overall sustainment or production costs. To provide a meaningful comparison, one would need to aggregate spending on B-2 inventory control, parts manufacturing, and related support services over previous fiscal years and identify trends. Factors such as program phase (e.g., initial production vs. sustainment), technological upgrades, and inflation would significantly influence historical spending patterns.

What are the key performance indicators (KPIs) or metrics used to evaluate Northrop Grumman's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics for this contract. However, for aircraft manufacturing support contracts, typical KPIs often include on-time delivery of parts or services, quality of manufactured components (defect rates), adherence to specifications, cost control within the firm fixed-price structure, and responsiveness to Air Force requirements. Performance would likely be monitored through regular progress reports, technical reviews, and potentially user feedback from the inventory control point and B-2 program office. Failure to meet these KPIs could result in contractual remedies or penalties.

Given the sole-source nature, what steps were taken to ensure fair and reasonable pricing for this contract?

When a contract is awarded sole-source, the government is responsible for ensuring that the price is fair and reasonable through various methods, even without competition. This typically involves conducting a price analysis. For a contract of this magnitude, the government would likely have required Northrop Grumman to submit detailed cost proposals, including direct costs, indirect costs, and profit. The contracting officer would then analyze these costs, potentially using historical pricing data from previous contracts, commercial price lists (if applicable), or by comparing the proposed costs to independent government cost estimates. Technical and audit agencies may also be involved in reviewing the contractor's cost submissions to verify their accuracy and allowability.

What is Northrop Grumman's track record with the Department of Defense, particularly on large aircraft manufacturing or sustainment contracts?

Northrop Grumman Systems Corporation has a long and extensive track record as a major defense contractor for the Department of Defense (DoD). They are a prime contractor on numerous high-value programs, including the B-2 Spirit stealth bomber itself, the F-35 fighter jet (as a key supplier), and various other aerospace and defense systems. Their experience encompasses complex manufacturing, systems integration, sustainment, and research and development. Given their significant role in developing and producing advanced military aircraft, their track record on large contracts is generally characterized by deep technical expertise and the capacity to handle large-scale, complex projects, though like any major contractor, they are subject to performance reviews and oversight.

Are there any known risks or concerns associated with Northrop Grumman as a contractor for this type of service?

While Northrop Grumman is a reputable and experienced defense contractor, potential risks associated with any large sole-source contract include the possibility of cost overruns if the firm fixed-price structure is not adequately managed by the contractor, or if unforeseen technical challenges arise. There's also the inherent risk of over-reliance on a single supplier for critical components or services, which could impact program continuity if issues arise with the contractor. Specific to this contract, without detailed performance data, it's difficult to identify unique risks beyond those generally associated with large, sole-source defense procurements. However, the DoD's contracting oversight mechanisms are designed to mitigate such risks.

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: $55,405,085

Exercised Options: $55,405,085

Current Obligation: $55,208,397

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $10,486,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline