DoD's $79.4M KC-10 Contractor Logistics Support contract awarded to Northrop Grumman faces scrutiny over value and competition
Contract Overview
Contract Amount: $79,403,562 ($79.4M)
Contractor: Northrop Grumman Technical Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-10-01
End Date: 2018-09-28
Contract Duration: 1,093 days
Daily Burn Rate: $72.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::CL,CT::IGF SERVICES FOR KC-10 CONTRACTOR LOGISTIC SUPPORT
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $79.4 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: IGF::CL,CT::IGF SERVICES FOR KC-10 CONTRACTOR LOGISTIC SUPPORT Key points: 1. The contract's substantial value raises questions about cost-effectiveness for essential aircraft support. 2. While awarded under full and open competition, the specific pricing and performance metrics require deeper analysis. 3. Potential risks include long-term sustainment costs and the impact of sole-source follow-on work. 4. The defense sector's reliance on such contracts highlights the need for robust oversight.
Value Assessment
Rating: questionable
The total award value of $79.4 million for a 3-year period suggests a significant per-year spend. Benchmarking against similar logistics support contracts for aging aircraft fleets is crucial to determine if this represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, which is a positive indicator for price discovery. However, the specific details of the bidding process and the number of competing offers are not provided, limiting a full assessment of competitive pressure.
Taxpayer Impact: The use of full and open competition aims to secure the best value for taxpayers. However, without detailed cost breakdowns and performance metrics, the true taxpayer impact remains to be fully evaluated.
Public Impact
Ensures continued operational readiness for the KC-10 fleet, a critical asset for refueling and strategic airlift. Supports jobs within the aerospace and defense industry, contributing to the national economy. The long-term sustainment of aging military aircraft is a significant budgetary consideration for the DoD.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed performance metrics.
- Potential for cost overruns in long-term sustainment.
- Limited transparency on specific pricing components.
Positive Signals
- Awarded via full and open competition.
- Supports critical national defense asset (KC-10).
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on contractor logistics support for aging aircraft. Spending in this area is substantial and driven by the need to maintain operational readiness for legacy platforms.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Large prime contractors like Northrop Grumman often manage complex supply chains, and the extent of small business participation would require further investigation.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for contract administration and oversight. However, the effectiveness of this oversight in ensuring optimal value and performance needs further examination.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of detailed performance data.
- Potential for escalating long-term sustainment costs.
- Limited insight into the competitive landscape beyond the initial award.
- Aging aircraft platform requiring continuous, costly support.
Tags
other-support-activities-for-air-transpo, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $79.4 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. IGF::CL,CT::IGF SERVICES FOR KC-10 CONTRACTOR LOGISTIC SUPPORT
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 $79.4 million.
What is the period of performance?
Start: 2015-10-01. End: 2018-09-28.
What specific performance metrics were used to evaluate Northrop Grumman's services, and how do they compare to industry benchmarks for similar logistics support contracts?
The provided data does not detail the specific performance metrics used for this contract. A thorough review would involve examining the contract's statement of work, key performance indicators (KPIs), and any associated performance reports. Comparing these against industry standards for aircraft logistics support would reveal whether the services delivered met expectations and provided good value for the investment.
What is the projected long-term cost of sustaining the KC-10 fleet under this and potential follow-on contracts, and are there alternative strategies to mitigate these costs?
The current contract covers a defined period, but the long-term sustainment costs for aging aircraft like the KC-10 are a significant concern. Without visibility into future sustainment plans and potential sole-source extensions, it's difficult to project total lifecycle costs. Exploring options like fleet modernization, alternative support models, or even phased retirement could offer cost-saving opportunities.
How effectively did the 'full and open competition' process ensure competitive pricing and prevent potential price gouging for these essential logistics services?
While 'full and open competition' is the preferred method for ensuring competitive pricing, its effectiveness hinges on the specifics of the solicitation and the number of qualified bidders. A robust competition typically drives down prices. Further analysis would require understanding the number of proposals received, the evaluation criteria, and the final negotiated price relative to the initial bids to confirm optimal price discovery.
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
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: $79,403,562
Exercised Options: $79,403,562
Current Obligation: $79,403,562
Subaward Activity
Number of Subawards: 79
Total Subaward Amount: $269,211,523
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: 2015-10-01
Current End Date: 2018-09-28
Potential End Date: 2018-09-28 00:00:00
Last Modified: 2021-11-17
More Contracts from Northrop Grumman Technical Services, Inc.
- CLS Support 31 OCT 2007 Through 30 OCT 2008. Numerous Options ARE Also Included, Which MAY BE Awarded AT a Later Date — $963.9M (Department of Defense)
- Battle Command Training Program Services — $522.2M (Department of Defense)
- Passenger Systems Program Directorate Software Application Development, Modernization, Enhancement, Operations and Maintenance Igf::ot::igf — $336.3M (Department of Homeland Security)
- THE Purpose of This Modification IS to Obligate Funding for the KC-10 CLS Services Support — $245.0M (Department of Defense)
- Program Office Request — $238.3M (Department of Defense)
View all Northrop Grumman Technical Services, Inc. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)