DoD's $1.88B life cycle support for EA-6B, F-5, E-2 aircraft awarded to Northrop Grumman

Contract Overview

Contract Amount: $18,760,680 ($18.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2009-07-30

End Date: 2012-08-08

Contract Duration: 1,105 days

Daily Burn Rate: $17.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: LIFE CYCLE SUPPORT SERVICES FOR THE EA-6B, F-5 AND E-2 SERIES AIRCRAFT

Place of Performance

Location: SAINT AUGUSTINE, ST. JOHNS County, FLORIDA, 32095

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $18.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: LIFE CYCLE SUPPORT SERVICES FOR THE EA-6B, F-5 AND E-2 SERIES AIRCRAFT Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant duration of over 3 years suggests a long-term need for these services. 3. Focus on engineering services indicates a critical role in maintaining aging aircraft fleets. 4. Contract value suggests a substantial investment in sustainment for key defense platforms. 5. Geographic concentration in Florida may point to specific operational or maintenance hubs.

Value Assessment

Rating: questionable

The contract's value of $1.88 billion over its life cycle is substantial, but without competitive bidding, it's difficult to benchmark its value for money. The 'Time and Materials' pricing structure can sometimes lead to cost overruns if not closely managed. Comparing this to similar sole-source sustainment contracts for legacy aircraft would be necessary to assess if the pricing is reasonable, but such data is not readily available in this summary.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when only one contractor possesses the necessary specialized knowledge, facilities, or proprietary data to perform the work. The lack of competition means that the government did not benefit from a range of proposals and potentially lower prices that could have resulted from an open bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government's negotiating position is also weakened in sole-source situations.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the continued operational readiness of critical aircraft platforms. Services delivered include life cycle support, engineering, and maintenance for the EA-6B, F-5, and E-2 series aircraft. The geographic impact is concentrated in Florida, suggesting a key operational or maintenance base for these aircraft. Workforce implications include the employment of specialized engineers and technicians required for aircraft sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Time and Materials contract type can incentivize higher spending if not strictly managed.
Lack of competition raises concerns about contractor performance incentives and innovation.

Positive Signals

Award to a single, established contractor like Northrop Grumman suggests deep expertise in these specific aircraft.
Focus on life cycle support indicates a commitment to maintaining critical defense assets.
Long contract duration implies a stable, ongoing need for these specialized services.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment and engineering services. The market for such specialized support is often dominated by a few large prime contractors who have intimate knowledge of the systems they originally produced. Benchmarking would involve looking at other sustainment contracts for similar legacy military aircraft, which are typically high-value and long-term due to the complexity and age of the platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of specialized aircraft life cycle support often requires extensive infrastructure and proprietary knowledge typically held by large, established aerospace firms, limiting direct participation by smaller entities.

Oversight & Accountability

Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Transparency is limited due to the sole-source nature. Accountability measures would be embedded in the contract terms, focusing on delivery schedules and technical specifications, with potential for Inspector General review if performance issues arise.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Engineering Services
Defense Logistics Support
Legacy Aircraft Sustainment Programs

Risk Flags

Sole-source award
Time and Materials contract type
Aging aircraft platforms
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. LIFE CYCLE SUPPORT SERVICES FOR THE EA-6B, F-5 AND E-2 SERIES 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 $18.8 million.

What is the period of performance?

Start: 2009-07-30. End: 2012-08-08.

What is Northrop Grumman's track record with supporting EA-6B, F-5, and E-2 series aircraft?

Northrop Grumman has a long history as a prime contractor for various defense platforms. For the EA-6B Prowler, they were the original manufacturer and have been involved in its sustainment and upgrades throughout its service life. Similarly, for the E-2 Hawkeye family, Northrop Grumman has been a key player in its development and ongoing support. While specific performance metrics for this particular contract are not detailed here, the company's extensive experience with these specific aircraft types suggests a deep understanding of their technical requirements and operational needs. Their long-standing relationship with the DoD for these platforms indicates a level of trust and proven capability in providing life cycle support services.

How does the $1.88 billion life cycle cost compare to similar aircraft sustainment contracts?

Directly comparing the $1.88 billion life cycle cost without more granular data is challenging. However, sustainment contracts for complex, aging military aircraft like the EA-6B, F-5, and E-2 series are inherently expensive. These platforms often require specialized engineering, extensive parts replacement, and depot-level maintenance. Contracts for similar legacy aircraft, such as the F-15 or F-16 sustainment programs, can also run into billions of dollars over their extended service lives. The 'Time and Materials' aspect of this contract, coupled with its sole-source nature, means the final cost could fluctuate and potentially exceed initial estimates, making direct benchmarking difficult without detailed cost breakdowns and competitive data.

What are the primary risks associated with a sole-source, Time and Materials contract for aircraft sustainment?

The primary risks associated with this contract structure are significant. A sole-source award eliminates competitive pressure, potentially leading to higher prices than if the contract were competed. The government has less leverage to negotiate favorable terms. The 'Time and Materials' (T&M) pricing model carries inherent risks of cost escalation, as the contractor is reimbursed for actual labor hours and material costs, plus a fee. Without robust oversight and well-defined ceilings, T&M contracts can incentivize longer task durations and higher material costs. For complex aircraft sustainment, unforeseen technical issues can arise, driving up costs unpredictably. This combination requires stringent government oversight to manage risks effectively.

How effective is life cycle support in ensuring the operational readiness of these aircraft?

Life cycle support is crucial for ensuring the operational readiness of aging aircraft fleets like the EA-6B, F-5, and E-2 series. These services encompass a range of activities, including scheduled maintenance, unscheduled repairs, engineering support for modifications and upgrades, supply chain management for parts, and technical data management. Effective life cycle support directly translates to higher aircraft availability rates, reduced downtime, and the ability to meet mission requirements. The $1.88 billion investment signifies the DoD's commitment to maintaining these platforms, suggesting that sustained operational capability is a high priority. The success of this contract hinges on the contractor's ability to deliver these services efficiently and effectively over the contract's duration.

What are the historical spending patterns for EA-6B, F-5, and E-2 series aircraft sustainment?

Historical spending on the EA-6B, F-5, and E-2 series aircraft sustainment would likely show a consistent, significant investment over their decades of service. As these are complex military platforms, their maintenance and support costs are substantial throughout their operational lives. The EA-6B, a dedicated electronic warfare aircraft, required specialized and costly support. The F-5, while an older fighter, has seen continued use in training and adversary roles, necessitating ongoing maintenance. The E-2 series, an airborne early warning aircraft, is also a complex system requiring continuous engineering and logistical support. Spending would have likely increased over time as the aircraft aged, requiring more frequent repairs and component replacements, and potentially involving upgrades to maintain relevance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 5000 US HWY 1 N, SAINT AUGUSTINE, FL, 05

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,760,680

Exercised Options: $18,760,680

Current Obligation: $18,760,680

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018909DZ052

IDV Type: IDC

Timeline