DoD's $21M Aircraft Manufacturing Contract Awarded to Northrop Grumman via Sole Source

Contract Overview

Contract Amount: $21,078,178 ($21.1M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2008-01-01

End Date: 2012-12-31

Contract Duration: 1,826 days

Daily Burn Rate: $11.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: ICS WSSC CY08 REPAIR

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: ICS WSSC CY08 REPAIR Key points: 1. Significant contract value of over $21 million. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long contract duration of four years suggests a substantial project. 4. Aircraft manufacturing sector is critical for national defense.

Value Assessment

Rating: questionable

The contract type is Cost Plus Award Fee, which can lead to higher costs if not managed tightly. Without competitive bidding, it's difficult to assess if the price is fair compared to market rates for similar aircraft manufacturing services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers as there was no market pressure to drive down the price.

Taxpayer Impact: The lack of competition for this substantial contract likely means taxpayers did not benefit from potential cost savings that could have been achieved through a competitive bidding process.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The sole-source nature of the award could indicate a lack of available qualified contractors or a strategic decision by the DoD. The long-term nature of the contract impacts budget predictability for the DoD. The specific aircraft manufacturing services provided are crucial for national security operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Award Fee contract type
Lack of transparency in pricing

Positive Signals

Critical defense capability supported
Long-term commitment ensures program stability

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is typically high due to the complex nature of aircraft and the strategic importance of maintaining a modern air fleet.

Small Business Impact

The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if opportunities were missed for small business participation in this large defense contract.

Oversight & Accountability

The Department of Defense is responsible for overseeing this contract. The Defense Contract Management Agency (DCMA) likely plays a role in monitoring performance and costs, but the sole-source nature warrants close scrutiny.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to CPAF structure
Lack of competitive bidding may have led to inflated prices
Limited transparency on contractor performance and cost justification
No small business participation identified

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to NORTHROP GRUMMAN SYSTEMS CORP. ICS WSSC CY08 REPAIR

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 $21.1 million.

What is the period of performance?

Start: 2008-01-01. End: 2012-12-31.

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

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent needs. The DoD would need to provide documentation justifying this decision, and the absence of competition means potential cost savings from market forces were forgone.

How effectively was the Cost Plus Award Fee structure managed to control costs and incentivize performance?

The effectiveness of a Cost Plus Award Fee (CPAF) contract hinges on robust oversight and clearly defined award criteria. Without detailed performance metrics and cost tracking data, it's difficult to assess if the award fees truly incentivized efficiency or simply added to the overall cost. Regular audits and performance reviews are crucial for CPAF contracts.

What is the long-term strategic value of this specific aircraft manufacturing capability to the Department of Defense?

The long-term strategic value depends on the specific aircraft and its role in the DoD's mission. If it supports a critical platform or capability that is difficult to replicate, the investment may be justified despite the contract's structure. Understanding the operational necessity and the lifecycle of the aircraft is key to assessing its strategic importance.

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,606,231

Exercised Options: $21,606,231

Current Obligation: $21,078,178

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline