DoD's KC-10 Program Office spent $185M on Northrop Grumman for air transportation support

Contract Overview

Contract Amount: $185,410,473 ($185.4M)

Contractor: Northrop Grumman Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-10-13

End Date: 2012-09-30

Contract Duration: 718 days

Daily Burn Rate: $258.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Defense

Official Description: KC-10 PROGRAM OFFICE REQUEST

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $185.4 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: KC-10 PROGRAM OFFICE REQUEST Key points: 1. Value for money appears fair given the 2-year duration and cost-plus-no-fee contract type. 2. Competition was full and open, suggesting a competitive bidding process. 3. Risk indicators are moderate, with a cost-plus contract type potentially leading to cost overruns. 4. Performance context is limited to support activities for air transportation. 5. Sector positioning is within Defense, specifically supporting air mobility operations.

Value Assessment

Rating: fair

The total award amount of $185.4 million over approximately two years for support activities is substantial. Benchmarking this against similar contracts for aviation support is challenging without more specific service details. However, the cost-plus-no-fee (CPNF) contract type suggests that the contractor is reimbursed for allowable costs plus a fixed fee, which can sometimes lead to less incentive for cost control compared to fixed-price contracts. The fee structure here, 'no fee', is unusual and warrants further investigation into its implications for contractor motivation and oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 2 bids suggests a degree of competition, though the exact number of bidders can influence price discovery. A higher number of bidders generally leads to more competitive pricing for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through competitive pricing. The fact that there were at least two bids suggests that the government was not limited to a single provider, which helps ensure a fair market price.

Public Impact

The primary beneficiary is the Department of Defense, specifically the KC-10 Program Office, which receives essential support services. Services delivered include 'Other Support Activities for Air Transportation', likely encompassing maintenance, logistics, and operational support for KC-10 aircraft. The geographic impact is likely concentrated around military bases where KC-10 aircraft are operated and maintained. Workforce implications may include the employment of technical personnel by Northrop Grumman to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-no-fee contract type may reduce contractor incentive for cost efficiency.
Limited public information on specific performance metrics and outcomes.
Contract duration of approximately two years requires ongoing monitoring for sustained performance.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Northrop Grumman is a large, established defense contractor with significant experience.
Contract supports critical air mobility assets for the Department of Defense.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically supporting military aviation logistics and maintenance. The market for such specialized support services is dominated by large defense contractors. Spending benchmarks for similar support contracts can vary widely based on the specific aircraft, scope of work, and duration. The total award of $185.4 million over two years represents a significant investment in maintaining the operational readiness of the KC-10 fleet.

Small Business Impact

There is no indication that this contract involved small business set-asides, as the prime contractor is Northrop Grumman Technical Services, Inc., a large corporation. Subcontracting opportunities for small businesses may exist, but this information is not detailed in the provided data. The focus appears to be on large prime contractor performance rather than direct small business engagement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the contract terms, including reporting requirements and potential penalties for non-performance. Transparency is facilitated through contract award databases, though detailed performance reports are often not publicly available.

Related Government Programs

KC-135 Stratotanker Support
Air Mobility Command Logistics Services
Defense Logistics Agency Aviation Support
Aircraft Maintenance and Repair Services

Risk Flags

Cost-plus contract type requires diligent oversight to manage costs.
Limited detail on specific performance outcomes and metrics.
Contract duration of two years necessitates ongoing monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $185.4 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. KC-10 PROGRAM OFFICE REQUEST

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $185.4 million.

What is the period of performance?

Start: 2010-10-13. End: 2012-09-30.

What is the historical spending trend for KC-10 Program Office support contracts?

Analyzing historical spending for the KC-10 Program Office requires access to detailed contract databases beyond this single award. However, the $185.4 million awarded to Northrop Grumman Technical Services, Inc. for a two-year period (2010-2012) provides a data point for this specific support function. To understand trends, one would need to examine prior and subsequent contracts for KC-10 support, looking at total obligated amounts, contract types, and durations. Factors such as fleet size, operational tempo, and modernization programs would influence these spending patterns over time. Without a broader dataset, it's difficult to ascertain if this $185.4 million award represents an increase, decrease, or stable level of spending compared to previous periods.

How does the cost-plus-no-fee (CPNF) contract type impact contractor performance and government oversight?

The Cost-Plus-No-Fee (CPNF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred during performance, but without any additional fee or profit. This structure is typically used when the scope of work is uncertain or when the contractor is performing a service that is not easily quantifiable in terms of profit margin, such as certain types of research or government-unique support. For the contractor, the primary motivation is cost recovery rather than profit maximization, which can sometimes lead to less stringent cost control. For the government, it necessitates robust oversight to ensure that all claimed costs are allowable, reasonable, and allocable. The absence of a fee means the government avoids paying profit, but it must compensate by dedicating resources to meticulous auditing and monitoring of expenditures to prevent potential cost inflation.

What specific 'Other Support Activities for Air Transportation' were included in this contract?

The provided data classifies the service as 'Other Support Activities for Air Transportation' (NAICS code 488190). This broad category typically encompasses a range of services essential for the operation and maintenance of aircraft, beyond direct flight operations. Specific activities could include, but are not limited to: aircraft maintenance and repair, logistics support (supply chain management, parts procurement), technical support and engineering services, ground support equipment maintenance, facility support, and program management related to the KC-10 fleet. Without the detailed statement of work (SOW) for this specific contract, the precise nature and scope of these 'other activities' remain generalized. However, given the context of the KC-10 Program Office, these services are critical for ensuring the operational readiness and effectiveness of the KC-10 Extender aerial refueling tanker aircraft.

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

Northrop Grumman Technical Services, Inc. is a subsidiary of Northrop Grumman Corporation, a major defense contractor with extensive experience across various military platforms and services. Their track record with the Department of Defense is substantial, encompassing a wide array of contracts related to aircraft maintenance, logistics, systems integration, and technical support. For example, they have historically been involved in supporting large military aircraft programs, including tankers and bombers. While specific performance metrics for this particular KC-10 contract (2010-2012) are not detailed here, Northrop Grumman's general profile suggests a capacity to handle complex defense support requirements. A comprehensive assessment would involve reviewing past performance evaluations, any contract disputes, and the successful completion of similar large-scale support agreements across different branches of the DoD.

How does the competition level (2 bidders) for this contract compare to industry norms for similar defense support services?

For large, complex defense support services contracts, a competition level of two bidders can be considered moderate. While full and open competition theoretically allows for numerous potential bidders, the specialized nature of defense logistics and technical support often narrows the field to a few highly qualified large corporations. Industry norms can vary significantly depending on the specific service, technology involved, and existing market structure. In some highly specialized niches, only a handful of companies may possess the necessary certifications, infrastructure, and security clearances. In other areas, more bidders might participate. Two bidders suggest that the market is not a monopoly but also not a wide-open field, potentially leading to a price that is competitive but perhaps not as low as it might be with five or more bids. The government's acquisition strategy and the clarity of the solicitation also play a role in attracting bidders.

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: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

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: $185,410,473

Exercised Options: $185,410,473

Current Obligation: $185,410,473

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810610D0001

IDV Type: IDC

Timeline