DoD awards Northrop Grumman $20.7M for B-2 Interim Contractor Support, a sole-source contract

Contract Overview

Contract Amount: $20,690,019 ($20.7M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2006-12-26

End Date: 2012-12-31

Contract Duration: 2,197 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: CONTRACTOR SHALL PROVIDE PERFORMANCE BASED LOGISTICS (PBL) FOR FY07 B-2 INTERIM CONTRACTOR SUPPORT (ICS)

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: CONTRACTOR SHALL PROVIDE PERFORMANCE BASED LOGISTICS (PBL) FOR FY07 B-2 INTERIM CONTRACTOR SUPPORT (ICS) Key points: 1. The contract focuses on performance-based logistics for the B-2 bomber. 2. Northrop Grumman, the original equipment manufacturer, is the sole awardee. 3. The contract duration is over 6 years, indicating long-term support needs. 4. The award is a Delivery Order under a larger contract vehicle.

Value Assessment

Rating: fair

The contract type is Cost Plus Award Fee (CPAF), which can lead to higher costs if not managed carefully. The award amount is significant, but without specific benchmarks for PBL on similar aircraft, a precise value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to Northrop Grumman's unique position as the OEM for the B-2. This lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The sole-source nature of this contract means taxpayers may be paying a premium for contractor support, as competitive pressures are absent.

Public Impact

Ensures continued operational readiness of the B-2 bomber fleet. Supports critical national defense capabilities through specialized aircraft maintenance. Potential for cost overruns due to sole-source award and CPAF structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
CPAF contract type can incentivize higher costs.
Long contract duration increases exposure to price changes.

Positive Signals

Performance-based logistics aims for efficiency.
Supports a critical strategic asset (B-2 bomber).

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically supporting a major defense platform. Spending benchmarks for Performance-Based Logistics (PBL) on legacy aircraft can vary widely, but long-term sole-source contracts often carry higher risk.

Small Business Impact

This contract was awarded directly to Northrop Grumman Systems Corp and does not indicate any subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The contract is a Delivery Order under a larger vehicle, suggesting some level of pre-award oversight. However, the sole-source nature warrants close monitoring of performance and costs to ensure fair pricing and effective execution.

Related Government Programs

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

Risk Flags

Sole-source award.
Cost Plus Award Fee contract type.
Long contract duration (over 6 years).
Potential for contractor lock-in.
Lack of transparency in pricing due to no competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to NORTHROP GRUMMAN SYSTEMS CORP. CONTRACTOR SHALL PROVIDE PERFORMANCE BASED LOGISTICS (PBL) FOR FY07 B-2 INTERIM CONTRACTOR SUPPORT (ICS)

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 $20.7 million.

What is the period of performance?

Start: 2006-12-26. End: 2012-12-31.

What is the basis for the sole-source justification, and has it been reviewed recently?

The sole-source justification likely stems from Northrop Grumman's proprietary knowledge and control over the B-2 platform's systems and maintenance requirements. Agencies must periodically review sole-source justifications to ensure they remain valid and that competition is pursued whenever feasible. Without this review, the government risks paying inflated prices over the contract's extended duration.

How are performance metrics defined and measured under this CPAF contract to ensure value for money?

Performance metrics under a CPAF contract are crucial for ensuring value. They should be clearly defined, measurable, and directly tied to desired outcomes like aircraft availability, mission readiness, and cost efficiency. Regular audits and performance reviews by the contracting officer are essential to validate contractor performance against these metrics and ensure award fees are justified.

What is the government's strategy for managing cost growth over the 6-year contract duration?

Managing cost growth requires proactive measures. This includes establishing clear cost ceilings, implementing robust change control processes, and conducting regular cost realism analyses. The government should also explore opportunities for competitive re-competition or alternative support strategies as the contract progresses to mitigate long-term cost escalation.

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: 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

Financial Breakdown

Contract Ceiling: $21,359,719

Exercised Options: $21,359,719

Current Obligation: $20,690,019

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline