Northrop Grumman awarded $56.1M for B-2 Stealth aircraft structural component repair and maintenance

Contract Overview

Contract Amount: $56,136,199 ($56.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2002-12-20

End Date: 2011-04-27

Contract Duration: 3,050 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200303!000056!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD25 !20021220!20031231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000009251864!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!1G!A!N!Z! ! !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 $56.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200303!000056!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD25 !20021220!20031231!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 sustainment of critical B-2 bomber components. 2. Sole-source award raises questions about price competition and value. 3. Long contract duration (2002-2011) suggests ongoing sustainment needs. 4. Focus on structural components indicates a critical maintenance requirement. 5. Geographic location of contractor in Palmdale, CA, aligns with aerospace manufacturing hubs.

Value Assessment

Rating: questionable

The contract value of $56.1 million for aircraft structural component maintenance and repair appears significant. Without specific benchmarks for B-2 component repair, it is difficult to definitively assess value for money. However, the sole-source nature of the award suggests limited opportunity for competitive pricing, potentially leading to higher costs than if the contract had been competed. Further analysis would require detailed cost breakdowns and comparisons to similar sustainment contracts for other high-value military aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Northrop Grumman Systems Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when there is an urgent need that cannot be met through competition. The lack of competition means that taxpayers did not benefit from potential price reductions that could arise from multiple bidders vying for the contract.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially resulting in higher costs for taxpayers. The absence of competition means that the government cannot leverage market forces to drive down costs.

Public Impact

The primary beneficiaries are the U.S. Air Force and the operational readiness of the B-2 Stealth bomber fleet. Services delivered include maintenance and repair of structural components for the B-2 aircraft. Geographic impact is primarily national, ensuring the strategic capabilities of the B-2 are maintained. Workforce implications include employment for skilled technicians and engineers at Northrop Grumman's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long-term sustainment contracts can be susceptible to cost overruns if not closely managed.
Reliance on a single contractor for critical component maintenance could pose supply chain risks.

Positive Signals

Contract awarded to a known aerospace manufacturer with experience in advanced aircraft.
Focus on maintenance and repair ensures continued operational capability of a strategic asset.
Contract duration suggests a long-term commitment to supporting the B-2 program.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment and maintenance. The market for military aircraft MRO (Maintenance, Repair, and Overhaul) is substantial, with significant government spending dedicated to ensuring the readiness of its fleet. Northrop Grumman, as a major defense contractor, is a key player in this market. Benchmarking this contract's value would involve comparing it to similar sustainment contracts for other advanced military aircraft programs, considering factors like aircraft complexity and age.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific award document. However, large defense contractors typically have subcontracting plans that may include small businesses for various components or services, though this is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures. The Air Force is responsible for ensuring contract compliance and performance. Transparency is limited due to the sole-source nature and the proprietary information often associated with advanced defense systems. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B-2 Bomber Program
Air Force Sustainment Contracts
Aerospace Component Maintenance
Defense Contractor Support Services

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.1 million to NORTHROP GRUMMAN SYSTEMS CORP. 200303!000056!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD25 !20021220!20031231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000009251864!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S! ! ! !99990909!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 $56.1 million.

What is the period of performance?

Start: 2002-12-20. End: 2011-04-27.

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

Northrop Grumman has been the prime contractor for the B-2 Spirit stealth bomber since its inception, responsible for its design, development, and ongoing sustainment. Their extensive experience with the B-2 platform positions them uniquely to provide maintenance and repair services for its complex structural components. The company has a long history of managing large, complex defense programs, including sustainment efforts for various advanced aircraft. Their track record generally indicates a capability to handle such specialized requirements, though the scale and specifics of cost management on individual contracts would require deeper investigation into performance reports and audits.

How does the $56.1 million contract value compare to industry benchmarks for aircraft structural component maintenance?

Directly comparing the $56.1 million value to industry benchmarks for aircraft structural component maintenance is challenging without specific details on the scope of work, types of components, and labor hours involved. However, sustainment for advanced military aircraft like the B-2 is inherently expensive due to the complexity, specialized materials, and stringent quality requirements. This figure represents the total value over the contract's period of performance (2002-2011). Benchmarking would ideally involve comparing the cost per flight hour or cost per component repaired against similar platforms, adjusted for technological sophistication and age. Given the B-2's unique capabilities and limited production numbers, direct comparisons might be scarce, making sole-source pricing a point of concern.

What are the primary risks associated with this sole-source contract for the B-2 program?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive bidding. Without competing offers, Northrop Grumman may have less incentive to offer the most cost-effective solutions. Another risk is contractor dependency; the Air Force becomes reliant on a single provider for critical maintenance, which could lead to vulnerabilities if the contractor faces financial difficulties, operational issues, or decides to exit the market. Furthermore, the long duration of the contract (nearly 9 years) increases the risk of cost growth over time if not rigorously managed and overseen.

How effective is the maintenance and repair of structural components in ensuring the overall effectiveness of the B-2 bomber?

The maintenance and repair of structural components are absolutely critical to ensuring the overall effectiveness and longevity of the B-2 bomber. The B-2 is a highly complex and technologically advanced aircraft, and its stealth capabilities, aerodynamic performance, and structural integrity are paramount. Any degradation in structural components could compromise flight safety, reduce operational readiness, and potentially impact the aircraft's stealth characteristics. Therefore, consistent and high-quality sustainment of these components directly translates to the B-2's ability to perform its strategic missions effectively and safely.

What are the historical spending patterns for B-2 sustainment, and how does this contract fit within that trend?

Historical spending on B-2 sustainment has been substantial, reflecting the aircraft's high operational costs and advanced technology. The B-2 program has consistently required significant investment for maintenance, upgrades, and operational support throughout its service life. This $56.1 million contract, awarded early in the B-2's operational deployment (contract period 2002-2011), represents a portion of the overall sustainment costs during that era. It aligns with the trend of significant, ongoing investment required to maintain the readiness of this unique strategic asset. Without access to total program spending data, it's difficult to place this single contract in precise context, but it is indicative of the continuous funding needed for such high-value platforms.

What are the potential implications of this contract on the broader aerospace MRO market?

This contract, being a sole-source award for a highly specialized platform like the B-2, has limited direct implications on the broader aerospace Maintenance, Repair, and Overhaul (MRO) market. The B-2's unique design and stealth technology mean that only a few entities, primarily the original manufacturer, possess the necessary expertise and facilities. While it reinforces Northrop Grumman's position in the high-end military MRO segment, it does not significantly alter competitive dynamics for more common aircraft types. However, it highlights the substantial market for sustainment services for advanced military platforms, a segment dominated by large, established defense contractors.

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline