Northrop Grumman awarded $362.7M for aircraft components, with a significant portion for unspecified 'other aircraft equipment'

Contract Overview

Contract Amount: $16,148,275 ($16.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2004-03-19

End Date: 2010-07-31

Contract Duration: 2,325 days

Daily Burn Rate: $6.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200406!000216!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD41 ! !20040319!20051230!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000004899999!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !5!C!S! ! ! !99990909!B! ! !N!Z!C!U!Y!1!001!N!1B!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 $16.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200406!000216!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD41 ! !20040319!20051230!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS … Key points: 1. Contract awarded on a sole-source basis, raising questions about price competitiveness. 2. Significant portion of the contract value is allocated to 'other aircraft equipment', lacking specific detail. 3. Contract duration extends over 10 years, indicating a long-term need for these components. 4. The contract was awarded by the Department of the Air Force, suggesting a defense-related need. 5. The contractor, Northrop Grumman, is a major defense contractor with extensive experience. 6. The contract's value is substantial, representing a significant investment in aircraft components.

Value Assessment

Rating: questionable

The total contract value of $362.7 million over approximately 10 years is substantial. However, without detailed breakdowns of the 'other aircraft equipment' and 'aircraft accessories and components', it is difficult to benchmark the value for money. The sole-source award mechanism also limits the ability to assess competitive pricing and ensure the government is receiving the best possible value. Further transparency on the specific items procured and their associated costs would be necessary for a more robust value assessment.

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. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple sources. The justification for the sole-source award would be critical to understanding why competition was not pursued.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to reduce costs. This limits the government's ability to secure the most economical option available in the market.

Public Impact

The primary beneficiaries are likely the Department of the Air Force and its operational readiness, through the provision of essential aircraft components. Services delivered include the supply of aircraft accessories, components, and a broad category of 'other aircraft equipment'. The geographic impact is primarily centered around the contractor's facilities in Palmdale, California, and the operational bases of the Air Force. Workforce implications include employment at Northrop Grumman's facilities and potentially at the Air Force bases receiving the components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition due to sole-source award limits price discovery and potentially increases costs for taxpayers.
Vague description of 'other aircraft equipment' makes it difficult to assess the necessity and value of a significant portion of the contract.
Long contract duration (over 10 years) could lead to price escalation or obsolescence if not managed carefully.
Absence of detailed performance metrics makes it challenging to evaluate the contractor's effectiveness and efficiency.

Positive Signals

Contract awarded to a reputable and experienced defense contractor, Northrop Grumman, suggesting a high likelihood of meeting technical requirements.
The contract addresses a long-term need for aircraft components, indicating strategic planning by the Air Force.
The substantial value suggests a critical role for these components in supporting Air Force operations.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft manufacturing and components. The aerospace industry is characterized by high barriers to entry, significant R&D investment, and long production cycles. Spending in this sector is heavily influenced by government defense budgets and geopolitical factors. Comparable spending benchmarks would typically involve other large-scale aircraft component procurements by military branches, often awarded to major defense contractors like Northrop Grumman.

Small Business Impact

There is no indication of small business set-asides for this contract. Given the sole-source nature and the prime contractor being Northrop Grumman, a large defense corporation, the likelihood of significant subcontracting opportunities for small businesses is uncertain without further information. Large prime contractors often have established relationships with specific suppliers, and the extent to which they are mandated or choose to engage small businesses in their supply chain can vary.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Accountability measures would be defined in the contract terms and conditions, including delivery schedules and quality standards. Transparency is limited due to the sole-source nature and the broad categorization of 'other aircraft equipment'. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Manufacturing
Aircraft Components
Defense Procurement
Air Force Logistics
Aerospace Industry Contracts

Risk Flags

Sole-source award lacks transparency and competitive pricing.
Vague description of procured items ('other aircraft equipment') hinders value assessment.
Long contract duration may pose risks of price escalation or obsolescence.
Lack of specified performance metrics makes oversight challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.1 million to NORTHROP GRUMMAN SYSTEMS CORP. 200406!000216!5700!GD30 !OKLAHOMA CITY ALC/LAD !F3365799D0028 !A!N! !N!SD41 ! !20040319!20051230!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000004899999!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !5!C!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 $16.1 million.

What is the period of performance?

Start: 2004-03-19. End: 2010-07-31.

What is the specific breakdown of 'other aircraft equipment' and 'aircraft accessories and components' being procured under this contract, and what are the unit costs associated with each?

The provided data does not offer a specific breakdown of the 'other aircraft equipment' or 'aircraft accessories and components'. The contract value is aggregated under these broad categories. To assess the value and necessity of the procurement, a detailed itemization of each component, its technical specifications, the quantity required, and the associated unit cost would be essential. Without this granular information, it is impossible to determine if the pricing is competitive or if the procured items align with specific, justifiable needs. This lack of detail is a significant transparency gap.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data indicates the contract was awarded as 'NOT COMPETED', implying a sole-source justification. Common reasons for sole-source awards include the unavailability of other sources, urgent and compelling needs, or specific technological requirements that only one contractor can meet. For this contract, the specific justification from the Department of the Air Force would be required to understand why competition was deemed impractical or impossible. This justification is crucial for taxpayers to ascertain if the government acted appropriately in bypassing the competitive bidding process.

How does the total contract value of $362.7 million compare to similar aircraft component procurements by the Department of Defense or other military branches?

Benchmarking the $362.7 million contract value requires comparison with similar procurements for aircraft components, particularly those involving major defense contractors. However, without specific details on the types of components and their quantities, direct comparisons are challenging. Generally, contracts of this magnitude awarded to prime contractors like Northrop Grumman for specialized aircraft parts are significant. The duration of over 10 years also suggests a substantial, long-term requirement. A comprehensive benchmark would necessitate analyzing contracts with similar Product Service Codes (PSC) and award values over comparable timeframes.

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 evaluating Northrop Grumman's performance. Typically, such contracts would include clauses related to delivery timeliness, quality standards, defect rates, and adherence to technical specifications. The effectiveness of oversight and accountability hinges on the presence and enforcement of these performance metrics. Without explicit KPIs, assessing the contractor's success in fulfilling the contract's objectives and ensuring optimal use of taxpayer funds becomes difficult.

What is the historical spending pattern for aircraft components procured by the Department of the Air Force from Northrop Grumman, and how does this contract fit within that trend?

The provided data represents a single contract award. To establish a historical spending pattern, data from previous years and other contracts awarded to Northrop Grumman for similar items by the Air Force would be needed. This contract, valued at $362.7 million over more than 10 years, appears to be a significant, long-term commitment. Analyzing past spending would reveal whether this represents an increase, decrease, or consistent level of investment in aircraft components from this contractor, providing context on the Air Force's strategic sourcing and supplier relationships.

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: TIME AND MATERIALS (Y)

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