DoD's $50.5M B-2 PBL Contract for Northrop Grumman Faces Oversight Concerns

Contract Overview

Contract Amount: $50,468,461 ($50.5M)

Contractor: Northrop Grumman Systems Corp

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2014-04-01

Contract Duration: 1,186 days

Daily Burn Rate: $42.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CY11 B-2 PERFORMANCE BASED LOGISTICS (PBL) CONTRACTOR INVENTORY CONTROL POINT (C-ICP) SUSTAINMENT

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $50.5 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: CY11 B-2 PERFORMANCE BASED LOGISTICS (PBL) CONTRACTOR INVENTORY CONTROL POINT (C-ICP) SUSTAINMENT Key points: 1. High contract value of $50.5M for B-2 sustainment. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Potential risks associated with contractor inventory control point. 4. Spending falls within the Aircraft Manufacturing sector.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a definitive pricing assessment difficult. Benchmarking against similar sustainment contracts is challenging due to the unique nature of the B-2 program and the sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Northrop Grumman. The absence of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition and potential for cost overruns directly impact taxpayer funds allocated to defense.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the contract. The B-2 bomber's operational readiness could be impacted by issues with this sustainment contract. Lack of transparency in pricing due to the contract type and award method.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost Plus Fixed Fee contract type
Limited oversight potential

Positive Signals

Essential sustainment for a critical defense asset (B-2)
Contractor has specific expertise for this platform

Sector Analysis

This contract falls under the Aircraft Manufacturing sector, specifically for sustainment of the B-2 bomber. Spending benchmarks for similar sole-source sustainment contracts are difficult to establish due to the unique nature of the platform and limited competitive data.

Small Business Impact

The contract data indicates no specific set-aside for small businesses, and the prime contractor is a large corporation. There is no indication of subcontracting opportunities for small businesses within this data.

Oversight & Accountability

The contract was awarded by the Department of Defense through the Defense Contract Management Agency. The 'CA' status suggests potential concerns regarding contract administration or performance, warranting closer oversight.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee structure shifts cost risk to government.
Contractor Inventory Control Point (C-ICP) may have inefficiencies.
Lack of small business participation noted.
Contract status 'CA' suggests potential issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.5 million to NORTHROP GRUMMAN SYSTEMS CORP. CY11 B-2 PERFORMANCE BASED LOGISTICS (PBL) CONTRACTOR INVENTORY CONTROL POINT (C-ICP) SUSTAINMENT

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 $50.5 million.

What is the period of performance?

Start: 2011-01-01. End: 2014-04-01.

What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically stems from unique capabilities or proprietary technology held by a single contractor. To ensure fair pricing, the government should conduct thorough cost analyses, benchmark against similar (though potentially less specialized) contracts, and negotiate aggressively on profit margins and indirect cost rates. Regular audits and performance reviews are also crucial.

What are the specific risks associated with the contractor's inventory control point (C-ICP) for the B-2 PBL?

Risks associated with the C-ICP could include inefficient inventory management leading to higher costs, potential for stockouts impacting aircraft availability, or outdated inventory systems. If the contractor's control is suboptimal, it could result in unnecessary expenditures on parts or maintenance, ultimately affecting the B-2's readiness and the overall sustainment cost.

How does the Cost Plus Fixed Fee (CPFF) structure impact the government's ability to control costs on this contract?

The CPFF structure can create an imbalance in cost control. While the fixed fee provides the contractor with a guaranteed profit, the government bears the risk of cost overruns. This can incentivize the contractor to incur higher costs, as their fee remains constant, potentially leading to less cost-consciousness than other contract types like fixed-price contracts.

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: $50,468,461

Exercised Options: $50,468,461

Current Obligation: $50,468,461

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365799D0028

IDV Type: IDC

Timeline