DoD Awards Northrop Grumman $362.7M for Aircraft Engine Spares and Services

Contract Overview

Contract Amount: $28,178,498 ($28.2M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2005-12-20

End Date: 2006-12-31

Contract Duration: 376 days

Daily Burn Rate: $74.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200604!000055!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD55 ! !20051220!20061231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000015649998!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1B!AIRCRAFT ENGINES AND SPARES !000 !NOT DISCERNABLE !336412!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!N!R!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $28.2 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200604!000055!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD55 ! !20051220!20061231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!55156!037!06!PALMDALE !LOS … Key points: 1. Significant contract value for aircraft engine components and related services. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long-term contract duration suggests ongoing need for these specialized services. 4. Focus on aircraft engines places this within the critical Defense sector.

Value Assessment

Rating: questionable

The contract value of $362.7 million is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to assess if this pricing is competitive. The 'Cost Plus Award Fee' structure can lead to higher costs if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This limits price discovery and may result in higher costs for taxpayers compared to a competitive bidding process.

Taxpayer Impact: The lack of competition for a contract of this magnitude could lead to suboptimal pricing, potentially increasing the financial burden on taxpayers.

Public Impact

Ensures continued availability of critical aircraft engine parts for military operations. Supports a major defense contractor, potentially impacting jobs in the aerospace sector. Highlights the government's reliance on specific contractors for specialized defense needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Cost-plus contract type can incentivize higher spending.
Lack of detailed cost justification.

Positive Signals

Addresses critical need for aircraft engine support.
Supports a key defense industrial base supplier.

Sector Analysis

This contract falls within the Defense sector, specifically related to aircraft engines and spares. Spending in this area is crucial for national security, but often involves high costs due to specialized technology and limited suppliers.

Small Business Impact

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

Oversight & Accountability

The 'Cost Plus Award Fee' structure requires careful oversight to ensure performance targets are met and costs are managed effectively. The contracting agency, Defense Contract Management Agency, is responsible for monitoring this.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Cost Plus Award Fee structure
Lack of transparency on performance metrics
Potential for cost overruns without strong oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.2 million to NORTHROP GRUMMAN SYSTEMS CORP. 200604!000055!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD55 ! !20051220!20061231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000015649998!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1B!AIRCRAFT ENGINES AND SPARES !000 !NOT DISCERNABLE !336412!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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $28.2 million.

What is the period of performance?

Start: 2005-12-20. End: 2006-12-31.

What is the justification for the sole-source award, and were any market research efforts conducted to identify potential competitors?

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically conduct market research to determine if only one source can meet the requirement. Without this information, it's impossible to assess if the government adequately explored competitive options or if the sole-source determination was truly warranted.

How are the 'award fee' criteria defined, and what mechanisms are in place to ensure the fee is earned based on exceptional performance rather than just meeting minimum requirements?

The effectiveness of an award fee contract hinges on clearly defined, objective, and measurable performance criteria. Robust oversight is needed to ensure the fee incentivizes superior performance and cost control, not just baseline delivery. Without transparency into these criteria and the evaluation process, it's difficult to ascertain if taxpayer funds are being used efficiently.

What is the projected total cost of ownership for the aircraft engines supported by this contract over their lifecycle, and how does this contract contribute to that?

Understanding the lifecycle cost is essential for evaluating the true value of this contract. This award fee contract likely covers sustainment and spares, which are significant components of total ownership costs. Analyzing the long-term expenditure trends and the efficiency of the services provided will reveal the overall financial impact on the DoD's aviation readiness.

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

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline