DoD Awards Northrop Grumman $41.5M for B-2 Stealth Systems Engineering Services

Contract Overview

Contract Amount: $41,533,356 ($41.5M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2002-12-20

End Date: 2009-12-31

Contract Duration: 2,568 days

Daily Burn Rate: $16.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200306!000144!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD29 !20021220!20031231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000002250000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S!A! ! !99990909!B! ! !N!Z!C!U!R!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 $41.5 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200306!000144!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD29 !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 to Northrop Grumman for critical B-2 bomber systems engineering. 2. Sole-source award raises concerns about competition and potential overpricing. 3. Long contract duration (2002-2009) with significant taxpayer investment. 4. Services fall under Aircraft Manufacturing sector, with potential for cost overruns.

Value Assessment

Rating: questionable

The contract type is Cost Plus Award Fee, which can incentivize contractors to exceed costs for higher fees. Without competitive bidding, it's difficult to benchmark pricing against similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning no other companies were considered. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition for a contract of this magnitude represents a significant risk to taxpayer funds, as the government may not be receiving the best possible value.

Public Impact

Taxpayers may be overpaying for essential defense systems engineering due to lack of competition. The long-term nature of the contract raises questions about sustained value and potential for cost creep. Dependence on a single contractor for critical B-2 bomber support could pose a national security risk if issues arise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Award Fee contract type
Long contract duration
Lack of transparency in pricing

Positive Signals

Essential support for critical defense asset (B-2)
Experienced contractor with established relationship

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for systems engineering services related to the B-2 stealth bomber. Spending benchmarks in this specialized area are difficult to ascertain without competitive data, but significant investments are typical for advanced defense platforms.

Small Business Impact

The contract was awarded to a large corporation, Northrop Grumman Systems Corporation. There is no indication that small businesses were involved in this sole-source award, limiting opportunities for SMB participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that costs are managed effectively throughout the contract's duration.

Related Government Programs

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

Risk Flags

Potential for inflated costs due to sole-source award.
Lack of competitive pressure may reduce incentive for cost efficiency.
Long contract duration increases risk of cost creep and scope creep.
Limited transparency into specific cost breakdowns and profit margins.
Dependence on a single contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.5 million to NORTHROP GRUMMAN SYSTEMS CORP. 200306!000144!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD29 !20021220!20031231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000002250000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S!A! ! !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 $41.5 million.

What is the period of performance?

Start: 2002-12-20. End: 2009-12-31.

What specific systems engineering tasks are included in this contract, and how do they directly contribute to the B-2's operational readiness?

This contract covers a broad range of systems engineering services essential for maintaining and upgrading the B-2 bomber's complex avionics, software, and structural integrity. These tasks are crucial for ensuring the aircraft's stealth capabilities, mission effectiveness, and overall operational readiness in a constantly evolving threat environment.

Given the sole-source nature, what mechanisms are in place to prevent cost overruns and ensure fair pricing for these ongoing services?

The Cost Plus Award Fee structure allows for performance-based incentives, but the lack of competition is a primary concern. Robust government oversight, detailed cost tracking, and regular performance reviews are critical to mitigate potential cost overruns and ensure the contractor is delivering value within the negotiated fee structure.

How does the government assess the long-term value and effectiveness of these systems engineering services, especially considering the contract spans nearly a decade?

Assessing long-term value involves tracking key performance indicators related to system reliability, upgrade implementation success, and cost efficiency over time. Regular program reviews and independent technical assessments are necessary to ensure the services remain effective and aligned with evolving defense needs and technological advancements for the B-2 platform.

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

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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: NO

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline