DoD awards $177.7M to Northrop Grumman for KC-10 support, highlighting potential cost efficiencies
Contract Overview
Contract Amount: $177,656,813 ($177.7M)
Contractor: Northrop Grumman Technical Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-10-17
End Date: 2017-09-30
Contract Duration: 2,175 days
Daily Burn Rate: $81.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CLS IN SUPPORT OF KC-10 PROGRAM - FY12 FUNDING PER PROGRAM OFFICE REQUEST.
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $177.7 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: CLS IN SUPPORT OF KC-10 PROGRAM - FY12 FUNDING PER PROGRAM OFFICE REQUEST. Key points: 1. Significant contract value for specialized KC-10 program support. 2. Northrop Grumman is a key incumbent, potentially limiting future competition. 3. Risk of cost overruns exists given the long duration and fixed-price nature. 4. Spending falls within the Defense sector's substantial support services budget.
Value Assessment
Rating: good
The contract's firm fixed-price structure suggests an effort to control costs. However, the total award value of $177.7M over five years requires careful monitoring to ensure it remains competitive with similar long-term support contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific details of the competition and the number of bidders are not provided, making it difficult to fully assess the competitive pressure on pricing.
Taxpayer Impact: The competitive award process aims to secure the best value for taxpayers, but ongoing oversight is crucial to prevent cost creep over the contract's lifespan.
Public Impact
Ensures continued operational readiness for the KC-10 fleet. Supports critical logistics and maintenance functions for a vital military asset. Potential for job creation within the aerospace support industry.
Waste & Efficiency Indicators
Waste Risk Score: 82 / 10
Warning Flags
- Long contract duration may lead to scope creep or unforeseen cost increases.
- Incumbency advantage for Northrop Grumman could impact future competitive bids.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Awarded through full and open competition.
- Supports a critical national defense asset.
Sector Analysis
This contract falls within the Defense sector, specifically supporting air transportation logistics. Spending on such support services is substantial across the DoD, with this award representing a significant investment in maintaining aging aircraft fleets.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. Large prime contractors like Northrop Grumman typically manage subcontracts, and it's unclear if small businesses are significantly involved in this particular contract's execution.
Oversight & Accountability
The Department of Defense, through agencies like the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is necessary to ensure performance, manage risks, and verify that the contractor meets all contractual obligations.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Long contract duration increases risk of cost escalation.
- Potential for contractor lock-in due to incumbency.
- Aging aircraft platform may present unique sustainment challenges.
- Lack of detailed performance metrics in provided data.
Tags
other-support-activities-for-air-transpo, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $177.7 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. CLS IN SUPPORT OF KC-10 PROGRAM - FY12 FUNDING PER 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 $177.7 million.
What is the period of performance?
Start: 2011-10-17. End: 2017-09-30.
What specific performance metrics are in place to ensure the effectiveness of Northrop Grumman's support for the KC-10 program?
The contract details do not explicitly list performance metrics. However, standard government oversight would likely involve monitoring delivery schedules, quality of services, and adherence to technical specifications. Effective oversight by the Defense Contract Management Agency is crucial to ensure the contractor meets the program's operational requirements and maintains the KC-10's readiness.
How does the $177.7M award compare to historical spending on KC-10 sustainment, and what is the projected cost-effectiveness?
Without historical spending data for KC-10 sustainment, a direct comparison is difficult. The firm fixed-price nature of this award suggests an attempt at cost control. However, the long duration (over five years) necessitates careful tracking of expenditures against milestones to truly assess cost-effectiveness and ensure it aligns with or improves upon previous sustainment efforts.
What are the primary risks associated with this long-term support contract, and what mitigation strategies are employed?
Key risks include potential cost overruns due to the extended period, technological obsolescence of the KC-10, and the contractor's incumbency advantage potentially stifling future competition. Mitigation strategies likely involve stringent contract management, performance monitoring, and potentially incorporating clauses for future renegotiation or competitive re-solicitation as the contract nears its end.
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: 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: $177,656,813
Exercised Options: $177,656,813
Current Obligation: $177,656,813
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA810610D0001
IDV Type: IDC
Timeline
Start Date: 2011-10-17
Current End Date: 2017-09-30
Potential End Date: 2017-09-30 00:00:00
Last Modified: 2018-09-06
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