DoD's $143M Aircraft Part Contract Awarded to Northrop Grumman Raises Oversight Questions

Contract Overview

Contract Amount: $143,476,616 ($143.5M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2015-09-10

Contract Duration: 1,713 days

Daily Burn Rate: $83.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $143.5 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING Key points: 1. Significant contract value of $143.48M for aircraft parts. 2. Sole-source award to Northrop Grumman limits competitive pricing. 3. Contract duration of 1713 days suggests potential for cost overruns. 4. Focus on 'Other Aircraft Part and Auxiliary Equipment Manufacturing' indicates specialized needs.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) contract type, combined with a sole-source award, offers limited incentive for cost control. Without competitive benchmarks, assessing value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for a $143M contract may result in taxpayers paying a premium for aircraft parts and auxiliary equipment.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The long contract duration could lead to inefficiencies and increased costs. Dependence on a single supplier for critical aircraft components poses a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of small business participation

Positive Signals

Awarded to a major defense contractor
Supports critical Air Force operations

Sector Analysis

This contract falls within the 'Other Aircraft Part and Auxiliary Equipment Manufacturing' sector, which is crucial for maintaining military aviation readiness. Spending in this sector can be high due to the specialized nature of components and stringent quality requirements.

Small Business Impact

The data indicates no small business participation in this contract, suggesting a missed opportunity to support smaller enterprises within the defense industrial base.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Robust justification for the lack of competition is essential.

Related Government Programs

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

Risk Flags

Potential for inflated costs due to sole-source award.
Lack of transparency in pricing without competition.
Risk of contractor inefficiency with CPFF structure.
Long contract duration may lead to scope creep or cost overruns.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $143.5 million to NORTHROP GRUMMAN SYSTEMS CORP. OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

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 $143.5 million.

What is the period of performance?

Start: 2011-01-01. End: 2015-09-10.

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

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies must demonstrate that only one responsible source can provide the required supplies or services. Without this information, it's impossible to assess if competitive opportunities were missed, potentially leading to suboptimal pricing and reduced innovation.

How were costs controlled under the Cost Plus Fixed Fee (CPFF) structure for this extensive, non-competed contract?

CPFF contracts can incentivize contractors to increase costs to maximize their fee, especially when competition is absent. Effective oversight would involve rigorous auditing of costs, detailed review of the contractor's cost accounting practices, and clear performance metrics to ensure the fixed fee aligns with efficient delivery and taxpayer value.

What mechanisms were in place to ensure the delivery of high-quality aircraft parts and auxiliary equipment within the specified timeframe and budget?

Ensuring quality and timely delivery on a long-term, sole-source contract requires proactive government oversight. This includes establishing clear quality assurance procedures, regular performance reviews, milestone tracking, and robust communication channels with the contractor to identify and mitigate potential issues before they impact the program's success.

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $170,407,181

Exercised Options: $170,407,181

Current Obligation: $143,476,616

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline