DoD's $26M contract for EA-18G naval spares awarded to Northrop Grumman without competition

Contract Overview

Contract Amount: $26,000,000 ($26.0M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2011-11-03

End Date: 2014-08-20

Contract Duration: 1,021 days

Daily Burn Rate: $25.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EA 18/G NAVAL SPARES

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $26.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: EA 18/G NAVAL SPARES Key points: 1. The contract awarded to Northrop Grumman for naval spares represents a significant investment in specialized aviation components. 2. The lack of competition raises questions about potential price inflation and the absence of market-driven cost efficiencies. 3. The sole-source nature of this award warrants scrutiny regarding the justification for not seeking multiple bids. 4. Performance context is limited due to the absence of competitive benchmarks, making value assessment challenging. 5. This contract falls within the Defense sector, specifically supporting naval aviation readiness. 6. The duration of the contract and its value suggest a critical need for these specific spares.

Value Assessment

Rating: questionable

Without competitive bids, it is difficult to definitively assess the value for money. The $26 million award for naval spares, while potentially necessary, lacks a benchmark against which to compare pricing. Similar contracts for specialized aerospace components can vary widely in cost depending on the specific parts, quantities, and supplier. The absence of competition means taxpayers may not have benefited from the most cost-effective pricing achievable through a bidding process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Northrop Grumman Systems Corporation, was considered. The justification for this approach is not detailed in the provided data. Typically, sole-source awards occur when only one responsible source can provide the required supplies or services. The lack of competition limits price discovery and may result in higher costs compared to a fully competed procurement.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from potential cost savings that could arise from multiple companies bidding against each other. This could lead to a higher overall expenditure for these critical naval spares.

Public Impact

The primary beneficiaries are the U.S. Navy's EA-18G Growler squadrons, ensuring operational readiness. The contract delivers essential spare parts for the maintenance and sustainment of the EA-18G aircraft. The geographic impact is national, supporting naval aviation operations across various bases. Workforce implications include supporting specialized manufacturing and logistics roles within Northrop Grumman and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award limits transparency in pricing.
Potential for reduced innovation due to absence of market pressure.

Positive Signals

Ensures availability of critical spares for a key naval asset.
Award to an established contractor with known capabilities.
Supports ongoing sustainment of advanced military aircraft.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on electronic warfare aircraft components. The market for such specialized spares is often concentrated among a few key manufacturers due to the proprietary nature of the technology and high barriers to entry. Benchmarking spending in this niche requires comparison with other sole-source or limited-competition contracts for similar high-value, low-volume aerospace parts.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, there are limited direct subcontracting opportunities for small businesses unless Northrop Grumman voluntarily includes them in its supply chain. This contract does not appear to directly foster the small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and fair pricing. Transparency is limited due to the sole-source nature. Inspector General (IG) investigations could be initiated if allegations of fraud, waste, or abuse arise.

Related Government Programs

Naval Aviation Sustainment Programs
EA-18G Growler Aircraft Procurement and Support
Defense Logistics Agency (DLA) Spare Parts Procurement
Northrop Grumman Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to lack of competition.
Limited transparency on performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. EA 18/G NAVAL SPARES

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $26.0 million.

What is the period of performance?

Start: 2011-11-03. End: 2014-08-20.

What is the specific justification for awarding this contract on a sole-source basis to Northrop Grumman?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified when only one responsible source can provide the required supplies or services, often due to proprietary technology, unique capabilities, or urgent and compelling needs where competition is not feasible. For specialized aerospace components like those for the EA-18G, this could be due to unique manufacturing processes, existing system integration, or the limited number of entities possessing the necessary technical expertise and security clearances. A formal Justification for Other Than Full and Open Competition (JOFOC) would normally be required and publicly available through sources like SAM.gov.

How does the $26 million contract value compare to historical spending on EA-18G naval spares?

The provided data only details this specific $26 million contract awarded on November 3, 2011, with an estimated completion date of August 20, 2014. It does not offer historical spending patterns for EA-18G naval spares. To assess this, one would need to analyze historical contract awards for similar spare parts over multiple fiscal years, looking at both sole-source and competitive procurements. Without this broader context, it's impossible to determine if $26 million represents an increase, decrease, or typical level of spending for this category of spares.

What are the key performance indicators (KPIs) or metrics used to evaluate Northrop Grumman's performance under this contract?

The provided data does not specify the key performance indicators (KPIs) or metrics used to evaluate Northrop Grumman's performance for this contract. Typically, for spare parts contracts, performance is measured by factors such as on-time delivery rates, quality of parts (defect rates), responsiveness to orders, and adherence to contract specifications. The contract type, 'FIRM FIXED PRICE' (pt: FIRM FIXED PRICE), suggests that the price is fixed regardless of the contractor's cost, incentivizing efficiency. However, the specific metrics for evaluating success would be detailed in the contract's statement of work and performance clauses.

Are there any known risks associated with Northrop Grumman's track record in supplying similar naval aviation components?

The provided data does not contain specific information regarding risks associated with Northrop Grumman's track record for this particular contract. Northrop Grumman is a major defense contractor with extensive experience in aerospace and defense systems, including electronic warfare platforms like the EA-18G. While large contractors can face challenges, their long history suggests a generally established capability. A comprehensive risk assessment would require reviewing past performance evaluations, any contract disputes, quality issues, or delivery delays on similar contracts, which are not included in this dataset.

What is the potential impact of this sole-source award on future competition for EA-18G spares?

A sole-source award, especially for specialized components, can potentially limit future competition if the incumbent contractor holds critical intellectual property, unique manufacturing capabilities, or has established strong relationships with the government that are difficult for new entrants to overcome. If the justification for the sole-source award is based on factors that are not inherently limiting (e.g., not tied to unique, unshareable technology), it might suggest a missed opportunity to foster competition. However, if the components are highly specialized and only Northrop Grumman can produce them efficiently, future competition might remain limited regardless of this specific award.

How does the $26 million contract value align with the estimated total cost of the EA-18G program or its sustainment?

The provided data focuses solely on a $26 million contract for naval spares and does not offer information on the overall cost of the EA-18G program or its total sustainment budget. The EA-18G is a complex and advanced aircraft, and its total lifecycle cost, including procurement, operations, maintenance, and sustainment, runs into billions of dollars. A $26 million spares contract would represent a relatively small fraction of the overall program expenditure. To assess alignment, one would need access to the total program budget, sustainment funding levels, and the proportion allocated to spare parts procurement across all contracts.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 600 GRUMMAN RD WEST, BETHPAGE, NY, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,000,000

Exercised Options: $26,000,000

Current Obligation: $26,000,000

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $16,322,200

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM4AX12D9401

IDV Type: IDC

Timeline