DoD's $48.3M Repairables Contract Awarded to Northrop Grumman Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $48,310,372 ($48.3M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2008-06-27
End Date: 2014-05-31
Contract Duration: 2,164 days
Daily Burn Rate: $22.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: OVER/ABOVE AND REPAIR OF REPAIRABLES
Place of Performance
Location: BETHPAGE, NASSAU County, NEW YORK, 11714
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $48.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: OVER/ABOVE AND REPAIR OF REPAIRABLES Key points: 1. Significant spending on aircraft repairables, totaling $48.3M. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Long contract duration (2164 days) may indicate potential for cost overruns. 4. Aircraft Manufacturing sector spending is substantial within the DoD.
Value Assessment
Rating: questionable
The contract's value of $48.3M for repairables is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar repair services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition on this $48.3M contract means taxpayers may have paid a premium for repair services, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying for aircraft repair services due to the absence of competitive bidding. The long duration of the contract raises questions about the government's ability to secure better terms over time. Dependence on a single contractor for critical repair services could pose a risk to operational readiness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
- High contract value
Positive Signals
- Contract awarded to a known entity
- Specific service requirement met
Sector Analysis
The Department of Defense, specifically the Navy, awarded a significant contract for aircraft repairables. Spending in the Aircraft Manufacturing sector (NAICS 336411) is critical for military readiness, but competitive procurement is essential to ensure value for taxpayer dollars.
Small Business Impact
This contract was awarded to Northrop Grumman Systems Corporation, a large business. There is no indication that small businesses were involved in this specific procurement, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the pricing is reasonable and that future procurements in this category are competed to maximize value.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for overpricing
- Long contract duration
- Sole-source award justification unclear
- No small business participation
Tags
aircraft-manufacturing, department-of-defense, ny, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.3 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. OVER/ABOVE AND REPAIR OF REPAIRABLES
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $48.3 million.
What is the period of performance?
Start: 2008-06-27. End: 2014-05-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of other qualified sources. Without specific details, it's unclear if Northrop Grumman possessed exclusive capabilities or if the government simply did not pursue competitive options. Exploring alternatives could have yielded better pricing and broader industry engagement.
How does the per-unit cost of repairs under this contract compare to industry benchmarks or previous contracts for similar services?
Benchmarking the per-unit cost is challenging without access to detailed pricing data and specific repair types. However, given the sole-source nature, there's a heightened risk that costs are above market rates. A thorough audit or comparison with publicly available repair cost data for similar aircraft components would be necessary to assess value.
What mechanisms are in place to ensure the quality and timeliness of repairs provided by Northrop Grumman under this contract?
While the contract type is Firm Fixed Price, which shifts some cost risk to the contractor, oversight is still crucial. The Department of the Navy should have quality assurance personnel monitoring performance, ensuring repairs meet specifications, and tracking delivery schedules. Regular performance reviews and adherence to contractual milestones are key accountability measures.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0042103R0081
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation (UEI: 967356127)
Address: 600 GRUMMAN RD WEST, BETHPAGE, NY, 11714
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,310,372
Exercised Options: $48,310,372
Current Obligation: $48,310,372
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0042105G0001
IDV Type: IDC
Timeline
Start Date: 2008-06-27
Current End Date: 2014-05-31
Potential End Date: 2014-05-31 00:00:00
Last Modified: 2021-02-18
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