DoD's $153.9M contract for air transportation support awarded to Northrop Grumman, with 2 bids

Contract Overview

Contract Amount: $153,904,384 ($153.9M)

Contractor: Northrop Grumman Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-04-20

End Date: 2011-09-30

Contract Duration: 528 days

Daily Burn Rate: $291.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OBLIGATE FY10 FUNDING.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $153.9 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: OBLIGATE FY10 FUNDING. Key points: 1. Contract value of $153.9M over 1.7 years suggests a significant investment in air transportation support. 2. Awarded under full and open competition, indicating a broad market solicitation. 3. The presence of only two bidders may warrant further investigation into market dynamics and potential barriers to entry. 4. Fixed-price contract type aims to control costs, but requires careful scope management. 5. Performance period of 528 days provides a defined timeframe for service delivery. 6. The contract's focus on 'Other Support Activities for Air Transportation' highlights a critical but often unseen aspect of military logistics.

Value Assessment

Rating: fair

The contract value of $153.9 million for a period of approximately 1.7 years (528 days) for air transportation support is substantial. Benchmarking this against similar contracts is challenging without more specific service details. However, the fixed-price nature suggests an attempt to cap costs. The relatively short duration might indicate a need for ongoing re-competition or a specific project timeline. Without more granular data on the services provided and comparable market rates, a definitive value-for-money assessment is difficult, but the scale suggests a significant operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. However, only two bids were received. This limited number of bidders, despite open competition, could suggest a specialized service area where only a few companies possess the necessary capabilities, or it might indicate potential market consolidation or high barriers to entry for new competitors. The limited competition could impact price discovery, potentially leading to less competitive pricing than if more bidders had participated.

Taxpayer Impact: While open competition is generally beneficial for taxpayers, the low number of bidders in this instance may have limited the downward pressure on pricing. Taxpayers may not have received the full benefit of a highly competitive bidding process.

Public Impact

The Department of the Air Force benefits from enhanced air transportation support services. Military operations and logistical capabilities are supported through these services. The contract likely impacts the workforce within Northrop Grumman Technical Services, Inc., potentially in Oklahoma where the contract is noted. Ensures the readiness and efficiency of air mobility and related support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) despite full and open solicitation could indicate market concentration or barriers to entry.
Fixed-price contract requires diligent oversight to ensure scope creep is managed and value is maintained.
The specific nature of 'Other Support Activities for Air Transportation' may lack transparency regarding detailed service components.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Fixed-price contract type provides cost certainty for the government.
Contract awarded to a known entity (Northrop Grumman) which may imply established performance history.

Sector Analysis

The aerospace and defense sector is characterized by complex, high-value contracts often requiring specialized technical expertise. This contract falls within the support services segment of the defense industry, which is crucial for maintaining operational readiness. The market for air transportation support is significant, driven by government and commercial aviation needs. Spending in this area is often tied to defense budgets and strategic priorities. Comparable spending benchmarks would depend on the specific nature of the 'support activities,' but contracts of this magnitude are common within large defense procurements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. However, the prime contractor, Northrop Grumman, may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data. The absence of a small business set-aside means the primary focus was on securing the best overall offer from the broader market.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a delivery order under a larger contract vehicle, oversight would focus on ensuring adherence to the terms and conditions of the order, timely delivery of services, and quality of performance. Accountability measures are embedded in the firm-fixed-price structure, which incentivizes the contractor to manage costs. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed spending breakdowns may be less publicly accessible.

Related Government Programs

Air Mobility Command Contracts
Logistics and Support Services
Defense Transportation Services
Aerospace Maintenance and Repair Contracts

Risk Flags

Limited Competition
Broad Service Category
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $153.9 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. OBLIGATE FY10 FUNDING.

Who is the contractor on this award?

The obligated recipient is NORTHROP GRUMMAN TECHNICAL SERVICES, INC..

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 $153.9 million.

What is the period of performance?

Start: 2010-04-20. End: 2011-09-30.

What specific 'Other Support Activities for Air Transportation' are included under this contract?

The provided data categorizes this contract under 'Other Support Activities for Air Transportation' (NAICS code 488190). This broad category can encompass a wide range of services essential for the operation and maintenance of air transportation infrastructure and fleets. Examples could include, but are not limited to, air traffic control support, airport ground support services, aircraft maintenance and repair coordination, logistics management for aviation parts, flight planning services, and potentially specialized training for aircrews or ground personnel. Without access to the detailed contract statement of work (SOW), the precise nature and scope of these activities remain unspecified. This lack of specificity can make it difficult to benchmark costs accurately or assess the full value delivered.

How does the pricing of this contract compare to similar services procured by the Department of Defense or other federal agencies?

Directly comparing the pricing of this $153.9 million contract to similar services is challenging without a detailed breakdown of the specific support activities and their associated unit costs. The contract is a firm-fixed-price delivery order, which aims to provide cost certainty. However, the 'per-unit cost' is not provided, and the nature of 'support activities' is broad. To conduct a meaningful comparison, one would need to identify contracts with similar scope (e.g., ground support, maintenance coordination, logistics) and analyze their pricing structures, considering factors like contract duration, geographic scope, and the level of service required. Benchmarking would ideally involve comparing the contractor's proposed labor rates, overhead, and profit margins against industry standards and historical government data for comparable services.

What is Northrop Grumman Technical Services, Inc.'s track record with similar Department of Defense contracts?

Northrop Grumman Technical Services, Inc. is a major defense contractor with a long history of performing complex services for the Department of Defense and other government agencies. While specific details on their track record for 'Other Support Activities for Air Transportation' are not in the provided data snippet, the company generally holds numerous large contracts related to aerospace, defense systems, IT services, and logistics. Their performance history across various contracts is typically monitored by the government through systems like the Contractor Performance Assessment Reporting System (CPARS). A review of CPARS data, if available, would provide insights into their past performance regarding quality, timeliness, cost control, and overall customer satisfaction on similar engagements. Given their size and scope, they are generally considered a capable provider for large-scale defense support.

What are the potential risks associated with a contract of this size and scope for air transportation support?

Several risks are associated with a contract of this magnitude and nature. Firstly, the limited competition (two bidders) raises concerns about potential price inflation and reduced incentive for the contractor to optimize costs. Secondly, the broad categorization of 'Other Support Activities' could lead to scope creep if not meticulously managed, potentially increasing costs beyond the initial obligation. Thirdly, reliance on a single contractor for critical support functions introduces operational risk; any performance issues or disruptions by Northrop Grumman could significantly impact air operations. Finally, ensuring the value for money is achieved requires robust government oversight to confirm that the services delivered meet the required standards and are essential for the intended purpose.

How has federal spending on air transportation support evolved over the past five fiscal years, and how does this contract fit into that trend?

Analyzing the precise evolution of federal spending specifically on 'Other Support Activities for Air Transportation' requires access to detailed historical spending data, often categorized by agency and specific service type. General trends in defense spending often influence such contracts. If overall defense budgets have increased or remained stable, spending on support services like this would likely follow suit. Conversely, budget cuts could lead to reduced obligations. This $153.9 million contract awarded in FY10 represents a significant single obligation. To understand its place in the trend, one would need to compare its value against the total federal outlays for similar services in preceding and subsequent fiscal years. Without that broader context, it's difficult to definitively state if this contract represents an increase, decrease, or stable level of spending in this niche.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Titan II Inc. (UEI: 016435559)

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $215,045,054

Exercised Options: $153,904,384

Current Obligation: $153,904,384

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810610D0001

IDV Type: IDC

Timeline