DoD Awards Northrop Grumman $362.7M for Systems Engineering Services, Raising Oversight Concerns

Contract Overview

Contract Amount: $64,661,471 ($64.7M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2005-12-21

End Date: 2011-12-16

Contract Duration: 2,186 days

Daily Burn Rate: $29.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200607!000052!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD59 ! !20051221!20061231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000004856752!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!U!U!1!001!N!1G!A!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 $64.7 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: 200607!000052!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD59 ! !20051221!20061231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!73800!017!40!TINKER AFB !CANA… Key points: 1. Significant contract value of $362.7 million for critical systems engineering. 2. Sole-source award to Northrop Grumman raises questions about competition and price discovery. 3. Long contract duration of 2186 days (approx. 6 years) warrants close monitoring. 4. Focus on 'Aircraft Equipment' suggests a specialized, potentially high-cost sector.

Value Assessment

Rating: questionable

The contract value of $362.7 million for systems engineering services appears substantial. Benchmarking against similar contracts is difficult without more specific service details, but the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This was a sole-source award, meaning competition was not sought. This significantly limits price discovery and could lead to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition in this large contract likely results in a higher cost to taxpayers than if multiple vendors had vied for the work.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long duration of the contract could lead to scope creep and increased costs. Lack of transparency in the sole-source award process hinders public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
Potential for cost overruns

Positive Signals

Critical systems engineering support
Established contractor (Northrop Grumman)

Sector Analysis

This contract falls within the aerospace and defense sector, specifically for aircraft equipment and systems engineering. Spending in this area is often high due to complex technological requirements and R&D investments.

Small Business Impact

The awardee is Northrop Grumman Systems Corporation, a large prime contractor. There is no indication that small businesses were involved as subcontractors in this specific award, which is common for large sole-source contracts.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight to ensure fair pricing and effective service delivery. Without competition, accountability relies heavily on the contracting agency's diligence.

Related Government Programs

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

Risk Flags

Lack of competition
Potential for cost overruns (CPFF)
Long contract duration (over 6 years)
Limited transparency in award justification
No clear indication of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.7 million to NORTHROP GRUMMAN SYSTEMS CORP. 200607!000052!5700!FA8102!OC-ALC/LAD !F3365799D0028 !A!N! !Y!SD59 ! !20051221!20061231!362686958!008255408!016435559!N!NORTHROP GRUMMAN SYSTEMS CORPO!HORNETT WAY !EL SEGUNDO !CA!90245!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000004856752!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !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 $64.7 million.

What is the period of performance?

Start: 2005-12-21. End: 2011-12-16.

What specific systems engineering services are being procured, and how were they defined to justify a sole-source award?

The data indicates 'SYSTEMS ENGINEERING SERVICES' for 'OTHER AIRCRAFT EQUIPMENT'. A sole-source justification typically requires demonstrating that only one responsible source can provide the required services due to unique capabilities, urgency, or specific technical requirements. Without further documentation, it's unclear if these criteria were met or if the definition was overly narrow.

What mechanisms are in place to control costs and ensure value given the Cost Plus Fixed Fee (CPFF) contract type and lack of competition?

CPFF contracts can incentivize cost overruns if not managed tightly. The absence of competition exacerbates this risk. Robust government oversight, detailed performance metrics, and strict adherence to the fixed fee are crucial. Regular audits and reviews of contractor expenditures are essential to mitigate potential cost escalation and ensure taxpayer value.

How will the effectiveness of these systems engineering services be measured over the contract's long duration to ensure mission success?

Effectiveness measurement should involve clearly defined Key Performance Indicators (KPIs) tied to the specific aircraft systems being supported. This includes metrics for system reliability, maintainability, performance improvements, and successful integration of upgrades. Regular performance reviews and milestone assessments against these KPIs are vital to track progress and ensure the services contribute to the Air Force's mission objectives.

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 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