Northrop Grumman awarded $362.7M for aircraft structural component repair, with a significant portion for depot maintenance

Contract Overview

Contract Amount: $75,640,196 ($75.6M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2005-12-20

End Date: 2009-01-22

Contract Duration: 1,129 days

Daily Burn Rate: $67.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200604!000050!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD54 ! !20051220!20071217!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000009090964!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!Y!J!1!001!N!1G!A!Y!F! ! !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 $75.6 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200604!000050!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD54 ! !20051220!20071217!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!55156!037!06!PALMDALE !LOS … Key points: 1. Contract focuses on sustainment and repair of critical aircraft structural components, ensuring fleet readiness. 2. The majority of the award is for depot-level maintenance, indicating a need for specialized, long-term support. 3. Sole-source award suggests limited market availability or unique contractor capabilities for this specific repair work. 4. Contract duration of over three years highlights the ongoing nature of aircraft maintenance requirements. 5. High dollar value indicates the significant cost associated with maintaining complex aerospace systems. 6. Geographic concentration in California for the contractor's facility.

Value Assessment

Rating: fair

The contract value of $362.7 million over its period of performance appears substantial, reflecting the specialized nature of aircraft structural component repair. Benchmarking this against similar depot-level maintenance contracts for complex aircraft systems is challenging without more specific service details. However, the absence of competition suggests potential for higher pricing than might be achieved in a more open market. Further analysis would require comparing the per-unit costs for specific repair tasks against industry standards or historical data for similar components.

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 justified when a unique capability, proprietary technology, or urgent need exists that only one source can fulfill. The lack of competition means that price discovery through market forces was bypassed, potentially leading to less favorable pricing for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less assurance that the government secured the best possible price for the required services.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the aircraft requiring structural component repair, ensuring their operational readiness. Services delivered include depot-level maintenance and repair of aircraft structural components, crucial for flight safety and longevity. Geographic impact is concentrated around the contractor's facility in Palmdale, California, supporting local jobs and the aerospace ecosystem there. Workforce implications include employment for skilled technicians, engineers, and support staff at Northrop Grumman's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Long-term sustainment contracts can sometimes lead to vendor lock-in if not managed carefully.
Reliance on a single contractor for critical structural repairs could pose a risk if that contractor faces operational or financial difficulties.

Positive Signals

Contract awarded to a major defense contractor with established expertise in aerospace systems.
Focus on repair and maintenance extends the life of existing assets, potentially offering better value than new procurement.
Clear definition of services (maintenance and repair of structural components) suggests a well-understood requirement.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft sustainment and maintenance. The market for depot-level maintenance of complex military aircraft is often characterized by a limited number of highly specialized contractors capable of performing the work. Spending in this area is critical for maintaining the operational readiness of the U.S. military's aging fleet. Comparable spending benchmarks would typically involve analyzing other large sustainment contracts for major weapon systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded sole-source to Northrop Grumman Systems Corporation. There is no explicit mention of subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, though the prime contractor may engage small businesses indirectly through its supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting activity within the Department of the Air Force, likely the Air Force Sustainment Center or a similar depot-level command. Accountability measures would be embedded in the contract's performance work statement, delivery schedules, and quality assurance provisions. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Aircraft Depot Maintenance
Aerospace Component Repair
Air Force Sustainment Programs
Defense Contractor Support Services
F-35 Sustainment (if applicable to component type)
B-2 Bomber Sustainment (if applicable to component type)

Risk Flags

Sole-source award
High contract value
Long contract duration
Critical infrastructure support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.6 million to NORTHROP GRUMMAN SYSTEMS CORP. 200604!000050!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD54 ! !20051220!20071217!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000009090964!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!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 $75.6 million.

What is the period of performance?

Start: 2005-12-20. End: 2009-01-22.

What specific aircraft platforms does this contract support, and what is the historical performance of Northrop Grumman on similar sustainment contracts?

The provided data indicates the contract is for 'MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS' and falls under the 'OTHER AIRCRAFT EQUIPMENT' product service code. While the specific aircraft platform is not explicitly detailed, Northrop Grumman is a major defense contractor with extensive experience supporting various platforms, including the B-2 Spirit, F/A-18, E-2 Hawkeye, and others, often involving structural integrity and component repair. Their track record on similar sustainment contracts is generally robust, characterized by long-term relationships with the DoD. However, performance can vary, and specific contract metrics like on-time delivery and quality adherence would need to be reviewed for this particular award to assess its performance context accurately. Historical data on Northrop Grumman's sustainment contracts often shows a pattern of high value and long duration, reflecting the complexity and criticality of the systems they maintain.

How does the awarded amount of $362.7 million compare to the estimated value or previous spending on similar aircraft structural component repair services?

The awarded amount of $362,686,958 represents the total value obligated under this specific delivery order or contract modification. Without knowing if this is the total contract value or a portion, direct comparison is difficult. However, given the 'sole-source' nature and the focus on 'MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS,' this figure suggests a significant requirement, likely encompassing depot-level maintenance for a substantial number of components or a critical system. To benchmark effectively, one would need to identify comparable contracts for similar aircraft types (e.g., fighters, bombers, transport) and similar services (depot maintenance, structural repair). Historical spending patterns for aircraft sustainment within the Air Force often run into hundreds of millions or even billions of dollars annually across various platforms, indicating that this contract value, while large, is within the expected range for major defense sustainment efforts.

What are the key risk indicators associated with a sole-source award for critical aircraft structural components?

The primary risk indicator for a sole-source award is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or improve efficiency. Taxpayers may not be receiving the best value for their money. Another risk is 'vendor lock-in,' where the government becomes overly dependent on a single supplier, making it difficult and costly to switch providers in the future. Furthermore, if Northrop Grumman faces financial instability, supply chain disruptions, or labor issues, it could significantly impact the availability of critical repair services, potentially grounding aircraft and affecting military readiness. The absence of multiple bidders also limits the government's ability to assess alternative technical solutions or approaches to the repair work.

What is the expected impact of this contract on the operational readiness and longevity of the supported aircraft fleet?

This contract is expected to have a positive impact on the operational readiness and longevity of the supported aircraft fleet by ensuring that critical structural components are maintained and repaired to airworthy standards. Depot-level maintenance, as indicated in the contract description, involves comprehensive inspections, repairs, and overhauls that are essential for extending the service life of aging aircraft and ensuring their structural integrity. By addressing wear and tear, fatigue, and damage, the contract directly contributes to flight safety and mission capability. The timely and effective execution of these repair services will help maintain the availability of aircraft for operational deployments and training, thereby bolstering overall fleet readiness and reducing the need for premature aircraft retirement or replacement.

Can the government effectively track performance and ensure quality assurance under this sole-source contract structure?

Yes, the government can effectively track performance and ensure quality assurance even under a sole-source contract structure, although the mechanisms differ from a competed scenario. The contract itself will contain a detailed Performance Work Statement (PWS) outlining specific requirements, deliverables, standards, and metrics. Government quality assurance representatives (QARs) are assigned to monitor the contractor's adherence to the PWS, conduct inspections, review documentation, and verify that repairs meet technical specifications and safety standards. Acceptance criteria for completed work are defined, and payment is contingent upon meeting these criteria. While the absence of competition removes the incentive of losing future work to rivals, the government retains leverage through contract clauses related to default, termination for convenience, and potential penalties for non-performance. Robust oversight and clear communication channels are crucial for managing sole-source arrangements effectively.

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, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline