DoD awards $111M+ to Northrop Grumman for aircraft manufacturing, raising concerns about competition and value
Contract Overview
Contract Amount: $111,377,362 ($111.4M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2012-01-01
End Date: 2017-09-17
Contract Duration: 2,086 days
Daily Burn Rate: $53.4K/day
Competition Type: NOT COMPETED
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: BASE CAR TO ALLOW TRACKING OF CR FUNDS
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $111.4 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: BASE CAR TO ALLOW TRACKING OF CR FUNDS Key points: 1. Significant contract value of over $111 million awarded to a single large corporation. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract spans five years, indicating a long-term commitment with potential for cost escalation. 4. Aircraft manufacturing sector is critical but requires robust oversight to ensure taxpayer value.
Value Assessment
Rating: questionable
The contract is Time and Materials, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to assess if the pricing is fair compared to market rates for similar aircraft manufacturing services.
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 as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition on this large contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. Long-term contracts without competition can mask inefficiencies and inflate costs over time. Dependence on a single contractor for critical aircraft manufacturing could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Time and Materials contract type
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Contract awarded to a known defense contractor
- Supports critical aircraft manufacturing needs
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is substantial, and competitive procurement is crucial to ensure cost-effectiveness and technological advancement.
Small Business Impact
The contractor is Northrop Grumman Systems Corp, a large business. There is no indication of small business participation in this specific award, which is common for large sole-source defense contracts.
Oversight & Accountability
The 'st' field indicates 'CA' (California), potentially the contracting office location. Further oversight is needed to ensure the Time and Materials contract is managed effectively and that costs are reasonable given the lack of competition.
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.
- Time and Materials contract type poses risk of cost overruns.
- Long contract duration (over 5 years) increases potential for cost escalation.
- Lack of transparency regarding justification for sole-source award.
- Potential for reduced value for taxpayer dollars due to non-competitive nature.
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 $111.4 million to NORTHROP GRUMMAN SYSTEMS CORP. BASE CAR TO ALLOW TRACKING OF CR FUNDS
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 $111.4 million.
What is the period of performance?
Start: 2012-01-01. End: 2017-09-17.
What specific justification was provided for not competing this contract, and does it align with federal procurement regulations for sole-source awards?
The provided data does not include the justification for the sole-source award. Federal regulations typically require a compelling reason, such as unique capabilities or urgent need, to bypass full and open competition. Without this justification, it's difficult to assess the legitimacy of the sole-source decision and its impact on value for money.
How were the labor rates and material costs determined for this Time and Materials contract to ensure they are fair and reasonable?
Time and Materials contracts are inherently susceptible to cost overruns. Without competitive benchmarking, assessing the fairness and reasonableness of the rates is challenging. The government should have robust mechanisms in place to audit hours and material costs, and to negotiate rates that reflect market conditions, especially given the lack of competitive pressure.
What performance metrics or milestones are in place to ensure Northrop Grumman delivers effectively on this aircraft manufacturing contract?
The data provided does not detail specific performance metrics or milestones. For a contract of this magnitude and duration, clear deliverables, quality standards, and delivery schedules are essential for effective oversight. Regular performance reviews and adherence to these metrics are critical to ensure the government receives the intended value and that the contractor meets its obligations.
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
Pricing Type: TIME AND MATERIALS (Y)
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: $177,355,075
Exercised Options: $177,355,075
Current Obligation: $111,377,362
Subaward Activity
Number of Subawards: 61
Total Subaward Amount: $20,911,561
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365799D0028
IDV Type: IDC
Timeline
Start Date: 2012-01-01
Current End Date: 2017-09-17
Potential End Date: 2017-09-17 00:00:00
Last Modified: 2022-10-29
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