DoD's $216M B-2 PBL Contract with Northrop Grumman: Performance-Based Logistics for Aircraft Manufacturing
Contract Overview
Contract Amount: $215,987,659 ($216.0M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2009-01-01
End Date: 2014-07-31
Contract Duration: 2,037 days
Daily Burn Rate: $106.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: B-2 PERFORMANCE-BASED LOGISTICS SUSTAINMENT (PBL)
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $216.0 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: B-2 PERFORMANCE-BASED LOGISTICS SUSTAINMENT (PBL) Key points: 1. Significant contract value of $216M for B-2 bomber sustainment. 2. Sole-source award to Northrop Grumman raises questions about competition. 3. Performance-based logistics (PBL) aims to improve sustainment efficiency. 4. Aircraft manufacturing sector, high value, potential for cost overruns.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can incentivize contractor spending. Without competitive benchmarking, assessing the value for money is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for sustainment services.
Public Impact
Taxpayers fund sustainment for a critical bomber fleet. Contract duration of over 2000 days suggests long-term reliance. Performance-based logistics aims for efficiency but requires careful monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Performance-based logistics model
- Sustainment of critical defense asset
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing and sustainment. Benchmarks for similar PBL contracts are often proprietary but typically aim for cost savings through long-term partnerships.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as the prime contractor is Northrop Grumman Systems Corp. There is no information on subcontracting opportunities for small businesses.
Oversight & Accountability
Oversight is crucial for sole-source, cost-plus contracts to ensure fair pricing and performance. The Department of the Air Force is responsible for monitoring this contract's execution.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type can lead to cost overruns.
- Lack of transparency regarding specific performance metrics.
- Long contract duration requires sustained oversight.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $216.0 million to NORTHROP GRUMMAN SYSTEMS CORP. B-2 PERFORMANCE-BASED LOGISTICS SUSTAINMENT (PBL)
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 $216.0 million.
What is the period of performance?
Start: 2009-01-01. End: 2014-07-31.
What specific performance metrics are included in this PBL contract, and how are they measured to ensure value for money?
The contract details do not specify the performance metrics. PBL contracts typically include metrics related to availability, reliability, and turnaround time for parts and repairs. Effective oversight would involve rigorous tracking of these metrics against pre-defined targets to validate cost savings and operational effectiveness.
Given the sole-source nature, what mechanisms are in place to mitigate the risk of cost overruns and ensure fair pricing?
The cost-plus-fixed-fee structure inherently carries a risk of cost overruns. Mitigation strategies would likely involve stringent government oversight, detailed audits of contractor costs, and potentially incentive clauses tied to cost control. However, without competition, the government's leverage in negotiating fair pricing is reduced.
How does the sustainment of the B-2 bomber through this PBL contract contribute to the overall effectiveness and readiness of the Air Force fleet?
A well-executed PBL contract should enhance the availability and readiness of the B-2 fleet by ensuring timely maintenance and parts. This allows the Air Force to maintain operational capability for its strategic missions. The effectiveness hinges on Northrop Grumman meeting performance targets and the Air Force's ability to monitor and enforce the contract.
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
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: $215,987,659
Exercised Options: $215,987,659
Current Obligation: $215,987,659
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365799D0028
IDV Type: IDC
Timeline
Start Date: 2009-01-01
Current End Date: 2014-07-31
Potential End Date: 2014-07-31 00:00:00
Last Modified: 2023-09-05
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