Northrop Grumman awarded $362.7M for B-2 Stealth aircraft components, with a significant portion for specialized parts

Contract Overview

Contract Amount: $64,553,336 ($64.6M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2001-11-13

End Date: 2009-10-08

Contract Duration: 2,886 days

Daily Burn Rate: $22.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200204!000056!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD21 !20011113!20030922!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000023887143!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S!C! !D!20030923!B! ! !N!Z!D!U!J!1!001!N!1G!A!Y!F! ! !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 $64.6 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200204!000056!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD21 !20011113!20030922!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS A… Key points: 1. Contract awarded for critical aircraft components, indicating ongoing support for advanced defense platforms. 2. Sole-source award suggests unique capabilities or limited supplier base for specialized aircraft parts. 3. Long contract duration points to sustained operational needs and potential for follow-on work. 4. High contract value underscores the complexity and importance of the B-2 program. 5. Geographic concentration in California for contractor operations may have regional economic implications.

Value Assessment

Rating: good

The contract value of $362.7 million for aircraft accessories and components appears reasonable given the specialized nature of B-2 Stealth aircraft. While direct comparisons are difficult due to the unique platform, the price per unit for specific components would be the key metric for a detailed value assessment. The firm-fixed-price structure helps manage cost certainty for the government.

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 was determined to be capable of meeting the government's needs. This often occurs with highly specialized or proprietary systems where competition is not feasible or cost-effective. The lack of competition means price discovery is driven by negotiation rather than market forces.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. However, for highly specialized defense assets like the B-2, ensuring access to necessary components from the original manufacturer may be prioritized over achieving the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force and the B-2 bomber program, ensuring operational readiness. Services delivered include the manufacturing and supply of critical aircraft accessories and components. Geographic impact is concentrated in Palmdale, California, where Northrop Grumman's facilities are located. Workforce implications include skilled labor in aerospace manufacturing and engineering within California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to sole-source nature if not rigorously managed.
Dependence on a single contractor for critical B-2 components poses a supply chain risk.
Limited transparency in pricing due to lack of competition.

Positive Signals

Ensures continued availability of essential parts for a strategic defense asset.
Leverages specialized expertise of Northrop Grumman in B-2 systems.
Firm-fixed-price contract provides cost predictability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components. The B-2 Stealth bomber is a highly advanced and unique platform, meaning the market for its specific parts is limited and dominated by the original equipment manufacturer or authorized suppliers. Comparable spending benchmarks would likely be within other highly specialized military aircraft sustainment programs.

Small Business Impact

There is no indication of small business set-asides for this specific contract. Given the sole-source nature and the specialized requirements for B-2 components, it is unlikely that small businesses would be primary awardees. However, Northrop Grumman may engage small businesses as subcontractors for lower-tier components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight would typically be provided by the Department of the Air Force contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract structure, requiring delivery of specified components. Transparency is limited due to the sole-source award, but contract performance would be monitored through regular reporting and inspections.

Related Government Programs

B-2 Spirit Program
Air Force Materiel Command
Aerospace Component Manufacturing
Defense Industrial Base

Risk Flags

Sole-source award limits competitive pricing.
Long contract duration may indicate potential for scope creep or evolving requirements.
Dependence on a single contractor for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.6 million to NORTHROP GRUMMAN SYSTEMS CORP. 200204!000056!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD21 !20011113!20030922!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000023887143!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S!C! !D!20030923!B

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 $64.6 million.

What is the period of performance?

Start: 2001-11-13. End: 2009-10-08.

What is the historical spending trend for B-2 aircraft components with Northrop Grumman?

Historical spending data for B-2 aircraft components with Northrop Grumman would require a comprehensive review of past contracts. This specific contract, valued at $362.7 million, represents a significant investment. Analyzing prior awards for similar components or sustainment activities would reveal trends in annual spending, contract types (e.g., fixed-price vs. cost-plus), and the overall lifecycle cost of supporting the B-2 fleet. Without access to a broader contract history database, it's challenging to establish a definitive trend, but the substantial value of this award suggests consistent and significant investment in maintaining the B-2's operational capability.

How does the per-unit cost of these components compare to similar aircraft parts?

Direct per-unit cost comparisons for B-2 components are exceptionally difficult due to the unique and highly specialized nature of the aircraft. The B-2 is a low-observable strategic bomber, and its components are designed with advanced materials and technologies not found in conventional aircraft. Therefore, 'similar' aircraft parts are scarce. Benchmarking would need to focus on other advanced military platforms or specialized aerospace components, and even then, significant variations would be expected. A true value assessment would require detailed cost breakdowns from Northrop Grumman, comparing the cost of specific parts against internal benchmarks or negotiated rates for similar complexity within their own product lines.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators (KPIs) for this contract would likely focus on delivery timeliness, quality of components, and adherence to specifications. For a firm-fixed-price contract, meeting delivery schedules (contracted end date of 2009-10-08, with an initial award in 2001) and ensuring components meet stringent technical requirements are paramount. Quality assurance metrics, such as defect rates and compliance with aerospace standards, would also be critical. Performance might also be assessed based on Northrop Grumman's responsiveness to any technical issues or modifications required during the contract period. The Air Force would monitor these KPIs to ensure the continued airworthiness and operational readiness of the B-2 fleet.

What is Northrop Grumman's track record with the B-2 program and similar defense contracts?

Northrop Grumman has an extensive and critical track record with the B-2 Spirit program, having served as the prime contractor for its development and production. Their deep institutional knowledge and established infrastructure for supporting this unique platform are significant assets. The company has a long history of managing complex, high-value defense contracts across various platforms. Their performance on the B-2 program, while subject to the inherent complexities and costs of such advanced systems, is generally viewed as essential for maintaining the aircraft's operational status. This specific contract for components builds upon that established relationship and expertise.

Are there any identified risks associated with this contract, and how are they being mitigated?

Key risks associated with this contract include potential supply chain disruptions due to the specialized nature of the components and the sole-source award, which can limit flexibility and potentially lead to higher costs if not managed effectively. Mitigation strategies would involve close collaboration between the Air Force and Northrop Grumman to ensure robust production planning, inventory management, and proactive identification of potential bottlenecks. The firm-fixed-price nature of the contract itself acts as a risk mitigation tool for the government by capping the total cost. Additionally, ongoing quality assurance and performance monitoring by the Air Force help ensure that the components meet required standards, mitigating risks related to system failures.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline