DoD's $23.4M F-5 PDM contract awarded to Northrop Grumman for engineering services

Contract Overview

Contract Amount: $23,387,943 ($23.4M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2012-04-18

End Date: 2015-03-31

Contract Duration: 1,077 days

Daily Burn Rate: $21.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PERFORM F-5 PDM

Place of Performance

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

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $23.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: PERFORM F-5 PDM Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Firm Fixed Price contract type suggests clear cost expectations. 3. Contract duration of nearly three years indicates a significant project. 4. Performance occurred in Florida, potentially impacting local technical workforce. 5. No small business set-aside was applied to this procurement. 6. Engineering services are critical for maintaining complex defense platforms.

Value Assessment

Rating: fair

The awarded amount of $23.4 million for engineering services over approximately three years appears to be within a reasonable range for specialized defense platform sustainment. However, without direct comparable contracts for the F-5 PDM program or detailed cost breakdowns, a precise value-for-money assessment is challenging. The firm fixed-price nature of the contract provides some cost certainty, but the lack of competition limits the ability to benchmark against market rates or identify potential cost savings through competitive bidding.

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 solicited. This approach is typically used when a unique capability or proprietary technology is required, or when it's deemed impractical to compete. The absence of multiple bidders means there was no direct price competition, which can sometimes lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without alternative bids, it's difficult to ascertain if the price reflects the best possible value achievable through open market forces.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the continued operational readiness of the F-5 aircraft fleet. Services delivered include program definition management (PDM) for the F-5 aircraft, crucial for its sustainment and upgrades. The geographic impact is primarily in Florida, where the contract was performed, potentially supporting local technical jobs. The contract supports specialized engineering and technical expertise within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to limited competition.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Northrop Grumman is an established defense contractor with relevant experience.
Contract duration suggests a stable, long-term need for these services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting aerospace and defense platforms. The market for specialized engineering services for legacy aircraft like the F-5 is often dominated by a few key contractors with the requisite knowledge and security clearances. Spending in this area is driven by the need to maintain aging fleets and adapt them to evolving mission requirements, representing a significant portion of the defense budget.

Small Business Impact

This contract was not competed and did not include a small business set-aside. Consequently, there are no direct subcontracting opportunities for small businesses mandated by this specific award. The absence of a set-aside means that large businesses were the primary focus of this procurement, potentially limiting the direct participation of smaller, specialized firms in this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of accountability by fixing the total price. Transparency regarding the sole-source justification and performance metrics would be key to assessing accountability, though detailed public reporting on such specific contracts can be limited.

Related Government Programs

F-5 Aircraft Sustainment Programs
Defense Engineering Services Contracts
Aerospace Platform Maintenance
Department of Defense Procurement

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns without competitive pressure.
Limited public data on justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. PERFORM F-5 PDM

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 $23.4 million.

What is the period of performance?

Start: 2012-04-18. End: 2015-03-31.

What is Northrop Grumman's track record with similar sole-source engineering services contracts for legacy aircraft?

Northrop Grumman Systems Corporation has a long history of performing complex engineering and sustainment services for various defense platforms, including legacy aircraft. While specific data on sole-source contracts for F-5 PDM is not publicly detailed, the company's extensive experience in aerospace and defense suggests a capability to handle such requirements. Their track record often involves managing intricate systems, ensuring airworthiness, and providing technical support. However, the value and efficiency of sole-source awards are inherently less transparent than competed contracts, making direct comparisons of their performance on similar sole-source engagements challenging without access to internal government evaluations or detailed performance reports.

How does the $23.4 million cost compare to other F-5 sustainment or engineering contracts?

Directly comparing the $23.4 million cost to other F-5 sustainment or engineering contracts is difficult without specific, comparable contract data. The 'PDM' (Program Definition Management) aspect suggests a focus on defining or managing the program's future, which can vary significantly in scope and cost. Factors such as the specific systems being managed, the duration of the contract (nearly three years in this case), the level of engineering effort required, and the specific performance period influence the total cost. Given the sole-source nature, a direct benchmark against competitively bid contracts for similar services is not feasible. However, for specialized engineering services on defense platforms, costs can range widely based on complexity and duration.

What are the primary risks associated with a sole-source award for critical engineering services like the F-5 PDM?

The primary risks associated with a sole-source award for critical engineering services like the F-5 PDM include potential overpricing due to the lack of competitive bidding, reduced incentive for the contractor to innovate or achieve efficiencies, and a potential lack of access to alternative technical solutions. There's also a risk that the government may become overly reliant on a single provider, limiting future flexibility. Furthermore, without the scrutiny of multiple bidders, the justification for the sole-source award itself needs careful examination to ensure it was truly necessary and that the selected contractor is indeed the best or only option available for the required services.

How effective is a Firm Fixed Price (FFP) contract in managing costs for engineering services?

A Firm Fixed Price (FFP) contract is generally considered effective in managing costs for engineering services when the scope of work is well-defined and unlikely to change significantly. Under an FFP agreement, the contractor assumes most of the risk for cost overruns, as the price is fixed regardless of their actual costs. This incentivizes the contractor to control expenses and work efficiently. For the government, it provides cost certainty, making budgeting easier. However, if the scope of work is poorly defined or unforeseen issues arise, the contractor may be less willing to accommodate changes without additional cost, potentially leading to disputes or a need for contract modifications.

What is the historical spending pattern for F-5 aircraft sustainment and engineering services by the Department of Defense?

Historical spending patterns for F-5 aircraft sustainment and engineering services by the Department of Defense reflect the aging nature of the platform. While the F-5 is a legacy fighter, it continues to be used in various roles, including adversary training and by some allied nations. Spending typically focuses on maintaining airworthiness, providing spare parts, upgrading avionics or other systems to meet current operational needs, and providing specialized engineering support for modifications or troubleshooting. The total annual spending can fluctuate based on specific upgrade programs, depot maintenance cycles, and the overall operational tempo of the F-5 fleet. Contracts for these services are often awarded to established aerospace and defense contractors with specific expertise in the F-5 platform.

What oversight mechanisms are in place for sole-source contracts awarded by the Department of Defense?

Oversight mechanisms for sole-source contracts awarded by the Department of Defense are designed to ensure fairness, necessity, and value, despite the absence of competition. These include stringent justification requirements under the Federal Acquisition Regulation (FAR), often requiring detailed documentation of why competition is not feasible or not in the government's best interest. Contracting officers must obtain necessary approvals, which can escalate based on the contract's value. Post-award, agencies like the Defense Contract Management Agency (DCMA) monitor performance, cost, and schedule. Inspector General offices also play a role in auditing and investigating potential fraud, waste, or abuse. Transparency is enhanced through contract databases like FPDS, though detailed justifications for sole-source awards may be redacted.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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

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

Financial Breakdown

Contract Ceiling: $23,387,943

Exercised Options: $23,387,943

Current Obligation: $23,387,943

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0018912DZ014

IDV Type: IDC

Timeline