DoD Awards Northrop Grumman $362.6M for Systems Engineering Services, Ending in 2009

Contract Overview

Contract Amount: $60,082,656 ($60.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2004-12-16

End Date: 2009-06-30

Contract Duration: 1,657 days

Daily Burn Rate: $36.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200505!000085!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD49 ! !20041216!20041216!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000006179200!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !5!B!S! ! ! !20200930!B! ! !N!Z!C!U!R!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $60.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200505!000085!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD49 ! !20041216!20041216!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS … Key points: 1. Significant contract value awarded to a major defense contractor. 2. Sole-source award raises questions about competition and price discovery. 3. Long contract duration may indicate complex or ongoing service needs. 4. Services fall under Aircraft Manufacturing sector, suggesting specialized support.

Value Assessment

Rating: questionable

The contract value of $362.6 million over approximately 5.5 years is substantial. Without comparable contracts for similar systems engineering services, it's difficult to definitively assess pricing, but the sole-source nature warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award could result in inflated costs, impacting taxpayer value.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract could lock in services, potentially missing out on more cost-effective solutions. Dependence on a single contractor for critical systems engineering raises potential supply chain risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Award to established contractor
Services for critical defense needs

Sector Analysis

This contract for systems engineering services falls within the broader Aircraft Manufacturing sector. Spending in this sector is often characterized by high R&D costs and long production cycles, with significant government oversight typically required.

Small Business Impact

The awardee is Northrop Grumman Systems Corporation, a large prime contractor. There is no indication in the data that small businesses were involved as subcontractors on this specific contract.

Oversight & Accountability

The sole-source nature of this award suggests that oversight may have focused on justification for the lack of competition rather than on driving competitive pricing. Further review of the justification and approval process is warranted.

Related Government Programs

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

Risk Flags

Sole-source award lacks competition.
Potential for inflated costs due to no price discovery.
Long contract duration may not reflect current market efficiencies.
Limited transparency on justification for sole-sourcing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.1 million to NORTHROP GRUMMAN SYSTEMS CORP. 200505!000085!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD49 ! !20041216!20041216!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!3520 EAST AVENUE M !PALMDALE !CA!93550!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000006179200!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !5!B!S! ! ! !202

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 $60.1 million.

What is the period of performance?

Start: 2004-12-16. End: 2009-06-30.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive approaches considered?

The provided data indicates the contract was 'NOT COMPETED'. A full analysis would require reviewing the official Justification and Approval (J&A) document. Typically, sole-source awards are justified by factors such as unique capabilities, urgent needs, or lack of other responsible sources. Without the J&A, it's impossible to confirm the specific rationale or if alternatives were adequately explored.

How does the cost-plus-award-fee structure impact the overall value and risk for the government in this sole-source scenario?

Cost-plus-award-fee (CPAF) contracts allow the contractor to recover allowable costs plus a fee that includes a base fee and an award amount based on performance. In a sole-source context, CPAF can incentivize performance but also carries inherent risk if performance metrics are not rigorously defined and monitored, potentially leading to higher costs without guaranteed superior outcomes.

What is the long-term strategic implication of awarding such a significant systems engineering contract solely to Northrop Grumman for aircraft manufacturing?

Awarding a long-term, sole-source contract for critical systems engineering to a single large contractor can foster deep expertise and a strong working relationship. However, it also risks creating vendor lock-in, potentially stifling innovation from other companies and reducing the government's flexibility to adapt to new technologies or market changes.

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline