DoD awards $60.5M contract for F-5 aircraft depot maintenance, raising competition concerns
Contract Overview
Contract Amount: $60,507,526 ($60.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2014-04-22
End Date: 2020-04-11
Contract Duration: 2,181 days
Daily Burn Rate: $27.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F-5 DEPOT MAINTENANCE - FIRM-FIXED-PRICE, COST-PLUS-FIXED-FEE, COST REIMBURSEMENT, INDEFINITE-DELIVERY, INDEFINITE-QUANTITY CONTRACT FOR THE DEPOT MAINTENANCE SERVICES OF 44 NAVY AND MARINE CORPS RESERVE F-5N/F AIRCRAFT. THE SERVICES WILL INCLUDE DEPOT LEVEL MAINTENANCE, AIRCRAFT INSPECTIONS, REPAIRS, OVERHAULS, EMERGENCY REPAIRS, MODIFICATIONS, ENGINEERING SUPPORT, AND PROCUREMENT OF STRUCTURAL COMPONENTS AS REQUIRED TO SUSTAIN THE F-5N/F AIRCRAFT.
Place of Performance
Location: SAINT AUGUSTINE, SAINT JOHNS County, FLORIDA, 32095
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $60.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: F-5 DEPOT MAINTENANCE - FIRM-FIXED-PRICE, COST-PLUS-FIXED-FEE, COST REIMBURSEMENT, INDEFINITE-DELIVERY, INDEFINITE-QUANTITY CONTRACT FOR THE DEPOT MAINTENANCE SERVICES OF 44 NAVY AND MARINE CORPS RESERVE F-5N/F AIRCRAFT. THE SERVICES WILL INCLUDE DEPOT LEVEL MAINTENANCE, AIRCRAF… Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for F-5 aircraft depot maintenance. 2. Services include comprehensive maintenance, repairs, overhauls, and component procurement. 3. The contract was not competed, raising questions about price discovery and value. 4. This spending falls within the Defense sector, specifically aircraft maintenance.
Value Assessment
Rating: questionable
The contract is a mix of firm-fixed-price and cost-reimbursement types, making direct pricing comparisons difficult. The lack of competition suggests potential for overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The 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 for a significant contract like this may result in taxpayers paying more than necessary for depot maintenance services.
Public Impact
Military readiness: Ensures the operational capability of Navy and Marine Corps Reserve F-5 aircraft. Defense spending: A substantial investment in maintaining aging aircraft fleets. Contracting practices: Highlights potential issues with sole-source awards in defense procurement. Economic impact: Supports jobs and operations at Northrop Grumman Systems Corporation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns due to cost-reimbursement elements
- Reliance on a single contractor for critical maintenance
Positive Signals
- Ensures continued operational readiness of F-5 aircraft
- Provides comprehensive maintenance services
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft depot maintenance. Spending benchmarks for such services can vary widely based on aircraft type, age, and required services. The $60.5 million award for 44 aircraft suggests a significant investment per airframe.
Small Business Impact
The contract data indicates that small business participation was not a stated factor (ss: false, sb: false). This suggests that the prime contractor, Northrop Grumman, is likely performing the majority of the work, with limited subcontracting opportunities for small businesses.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for overseeing contract performance and ensuring compliance. However, the lack of competition limits the agency's ability to leverage market forces for better pricing.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency in pricing
- Reliance on a single contractor
- Aging aircraft fleet requires ongoing, potentially costly, maintenance
Tags
other-support-activities-for-air-transpo, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $60.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. F-5 DEPOT MAINTENANCE - FIRM-FIXED-PRICE, COST-PLUS-FIXED-FEE, COST REIMBURSEMENT, INDEFINITE-DELIVERY, INDEFINITE-QUANTITY CONTRACT FOR THE DEPOT MAINTENANCE SERVICES OF 44 NAVY AND MARINE CORPS RESERVE F-5N/F AIRCRAFT. THE SERVICES WILL INCLUDE DEPOT LEVEL MAINTENANCE, AIRCRAFT INSPECTIONS, REPAIRS, OVERHAULS, EMERGENCY REPAIRS, MODIFICATIONS, ENGINEERING SUPPORT, AND PROCUREMENT OF STRUCTURAL COMPONENTS AS REQUIRED TO SUSTAIN THE F-5N/F AIRCRAFT.
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $60.5 million.
What is the period of performance?
Start: 2014-04-22. End: 2020-04-11.
What was the justification for awarding this contract on a sole-source basis instead of competing it?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of adequate competition. Without further documentation, it's difficult to ascertain the specific reasons. However, the absence of competition raises concerns about whether alternative sources were thoroughly explored or if market research was insufficient.
How does the cost-reimbursement component of this contract mitigate or exacerbate risks for the government?
Cost-reimbursement contracts shift some financial risk to the government, as the contractor is reimbursed for allowable costs plus a fixed fee. While this can be beneficial for complex, uncertain work where costs are difficult to estimate upfront, it also increases the risk of cost overruns if not closely monitored. Effective oversight is crucial to control expenses.
What is the long-term strategy for F-5 aircraft maintenance and replacement, given the age of the fleet?
The continued investment in depot maintenance for aging F-5 aircraft raises questions about the long-term strategy. While essential for current readiness, it may indicate a gap in modernization plans or a delay in fielding newer platforms. Understanding the future role and planned retirement of these aircraft is crucial for assessing the overall value of this maintenance contract.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 5000 US HWY 1 N, SAINT AUGUSTINE, FL, 32095
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $60,537,526
Exercised Options: $60,507,526
Current Obligation: $60,507,526
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $120,261
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001914D0022
IDV Type: IDC
Timeline
Start Date: 2014-04-22
Current End Date: 2020-04-11
Potential End Date: 2020-04-11 00:00:00
Last Modified: 2019-07-11
More Contracts from Northrop Grumman Systems Corporation
- 200506!000026!5700!fa8214!oo-Alc/Pkme/Lmke !F4261098C0001 !A!N! !Y! !p01502!20041213!20050701!001563738!004179453!016435559!n!northrop Grumman Space & Missi!888 S 2000 E !clearfield !ut!84015!13850!011!49!clearfield !davis !utah !-000001960000!n!n!000000000000!l014!tech REP Svcs/Guided Missiles !A2 !missile and Space Systems !302 !minuteman III GRP !541330!E! !3! ! !C! ! !20200930!B! ! !A! !a!n!l!2!002!b! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $10.0B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-7) — $8.5B (Department of Defense)
- E-2D Advanced Hawkeye Aircraft (FRP-2) — $5.4B (Department of Defense)
- First DDT and E, Ares I-X, and Flight Tests. First Stage Will BE a Five Segment, Solid Rocket Booster Derived From the Space Shuttle Program (SSP) Solid Rocket Booster (srb)/Reusable Solid Rocket Motor (rsrm). the Contractor Shall Furnish the Necessary Management, Engineering, Labor, Facilities, Tools, Equipment, and Materials Required for First Stage Development, Qualification, Certification and Acceptance Program. Activities Include: Redesign and Testing of the Motor to Incorporate the Fifth Segment and Production of Five Full Scale Ground Static Test Motors: TWO Development Motors (dms)-And Three Qualification Motors (QMS); Structural Test Article (STA), Ground Vibration Test Motors (gvtms) and Other Development Testing; Redesign of the Avionics, Deceleration, Separation, and Flight Termination System (FTS) Subsystems; Ares I-X: Simulated Ares I Outer Mold Line/Mass Properties Using Modified Srb/Rsrm; and Three Flight Test Vehicles. TAS::80 0124::TAS — $4.4B (National Aeronautics and Space Administration)
- Federal Contract — $4.4B (Department of Defense)
View all Northrop Grumman Systems Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)