Northrop Grumman awarded $362.7M for aircraft structural component maintenance, with a significant portion for Oklahoma City ALC/LAD

Contract Overview

Contract Amount: $22,784,470 ($22.8M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2003-12-19

End Date: 2005-12-31

Contract Duration: 743 days

Daily Burn Rate: $30.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200403!000091!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD36 ! !20031219!20041231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55000!017!40!OKLAHOMA CITY !CANADIAN !OKLAHOMA !+000021249000!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !811219!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!N!U!1!001!N!1A!A!Y!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 $22.8 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200403!000091!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD36 ! !20031219!20041231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55000!017!40!OKLAHOMA CITY !CANA… Key points: 1. Contract value of $362.7 million for aircraft structural component maintenance. 2. Awarded to Northrop Grumman Systems Corporation, a major defense contractor. 3. Contract duration spans from December 2003 to December 2005. 4. Primarily supports the Oklahoma City Air Logistics Center (ALC/LAD). 5. Classified under 'Other Aircraft Equipment' with a Product Service Code of A1C. 6. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 7. This award represents a substantial investment in maintaining critical aircraft components.

Value Assessment

Rating: fair

The total award of $362.7 million for aircraft structural component maintenance over two years appears substantial. Benchmarking this against similar contracts for aircraft component repair and overhaul is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type suggests that the final cost could exceed initial estimates, which warrants careful monitoring of expenditures to ensure value for money. The contract's duration and scope suggest a significant operational requirement.

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 among multiple vendors. Sole-source awards are typically justified when only one contractor possesses the necessary capabilities, technology, or proprietary knowledge to fulfill the requirement. This lack of competition can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force units and personnel relying on the operational readiness of aircraft maintained under this contract. Services delivered include maintenance and repair of aircraft structural components, ensuring airworthiness and safety. The contract has a significant geographic impact, with a substantial portion of the work directed towards the Oklahoma City Air Logistics Center (ALC/LAD). Workforce implications include the employment of skilled technicians and support staff at Northrop Grumman facilities, particularly in California and potentially at the Oklahoma City ALC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee structure can incentivize higher costs if not closely managed.
Lack of detailed performance metrics in the provided data makes assessing efficiency difficult.
The contract's duration of two years might not reflect long-term sustainment needs, potentially leading to future sole-source awards.

Positive Signals

Award to a major defense contractor like Northrop Grumman suggests access to specialized expertise.
Focus on critical aircraft structural components indicates support for essential military aviation capabilities.
The contract's clear objective of maintenance and repair aims to ensure operational readiness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance, repair, and overhaul (MRO). The aerospace MRO market is a significant segment of the defense industry, driven by the need to maintain aging fleets and ensure operational readiness. Spending in this area is often characterized by long-term sustainment contracts, with a mix of competitive and sole-source awards depending on the specificity of the required services and the availability of qualified contractors. Benchmarks for such contracts are highly variable, depending on the aircraft type, component complexity, and service level agreements.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss=false) and there is no explicit mention of subcontracting plans for small businesses. Given the sole-source nature and the specialized requirements for aircraft structural component maintenance, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued under this specific award. This contract does not appear to directly contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Air Force and the relevant contracting activity at the Oklahoma City ALC/LAD. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing by government agencies are crucial to monitor expenditures and ensure compliance with the contract terms. Transparency is generally limited for sole-source awards, but contract modifications, performance reports, and financial reviews would be subject to internal government oversight mechanisms. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Component Sustainment
Air Force Logistics and Sustainment Contracts
Defense Contractor Support Services
Aircraft Structural Repair

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of detailed performance metrics
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to NORTHROP GRUMMAN SYSTEMS CORP. 200403!000091!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD36 ! !20031219!20041231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55000!017!40!OKLAHOMA CITY !CANADIAN !OKLAHOMA !+000021249000!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !811219!E! !5!B!S! ! ! !999

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 $22.8 million.

What is the period of performance?

Start: 2003-12-19. End: 2005-12-31.

What is the historical spending pattern for aircraft structural component maintenance at the Oklahoma City ALC/LAD?

Analyzing historical spending patterns for aircraft structural component maintenance at the Oklahoma City ALC/LAD requires access to comprehensive contract databases beyond this single award. This $362.7 million contract from 2003-2005 represents a significant investment during that period. To understand the broader trend, one would need to examine prior and subsequent contracts for similar services awarded to Northrop Grumman and other potential contractors supporting the ALC. Factors such as fleet size, modernization programs, and budget allocations would influence year-over-year spending. Without this broader context, it's difficult to determine if this award was typical, an increase, or a decrease in spending for this category.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar aircraft maintenance services?

The Cost Plus Fixed Fee (CPFF) contract type, used here, reimburses the contractor for allowable costs plus a predetermined fixed fee. This structure is often employed when the scope of work is not precisely defined or involves research and development, making it difficult to estimate costs accurately upfront. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can be advantageous when dealing with uncertain technical requirements. However, FFP contracts generally provide better incentives for contractor efficiency and cost control. For routine maintenance and repair, FFP or Fixed-Price Incentive (FPI) contracts might offer better value if performance and cost targets can be clearly established, potentially leading to lower overall expenditure for the government.

What specific aircraft platforms or components are covered under this 'Aircraft Structural Components' contract?

The provided data classifies the service under 'MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS' and 'OTHER AIRCRAFT EQUIPMENT' with a Product Service Code (PSC) of A1C. However, it does not specify the exact aircraft platforms (e.g., B-52, C-130) or the precise types of structural components (e.g., fuselage sections, wing spars, landing gear structures) that are included in this contract. This level of detail is typically found in the contract's statement of work (SOW) or performance work statement (PWS), which are not included in the summarized data. Understanding the specific platforms and components would allow for a more precise assessment of the contract's criticality and value.

What is Northrop Grumman's track record with the Oklahoma City ALC/LAD for similar maintenance and repair services?

Northrop Grumman Systems Corporation has a significant history of supporting U.S. military aviation programs. While this specific contract highlights a $362.7 million award for aircraft structural component maintenance from 2003-2005, their broader engagement with the Oklahoma City Air Logistics Center (ALC/LAD) likely extends beyond this single award. Assessing their track record would involve reviewing their performance on previous and subsequent contracts with the ALC, looking at factors like on-time delivery, quality of work, cost performance, and any past performance issues or awards. Given their status as a major defense contractor, it's probable they have extensive experience, but specific performance metrics related to the ALC would require deeper data analysis.

What are the potential risks associated with a sole-source, Cost Plus Fixed Fee contract for aircraft maintenance?

Sole-source, Cost Plus Fixed Fee (CPFF) contracts present several risks for the government. The primary risk of a sole-source award is the lack of competition, which can lead to inflated prices and reduced incentive for the contractor to innovate or become more efficient. The CPFF structure adds another layer of risk, as the contractor is reimbursed for all allowable costs plus a fixed fee. This can reduce the contractor's incentive to control costs, as higher costs do not necessarily reduce their profit margin (the fee is fixed). Effective government oversight, stringent auditing of costs, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value for its investment.

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: COST PLUS FIXED FEE (U)

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: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline