DoD Spends $319M on JSTARS E-8C Aircraft Sustainment/Repair with Northrop Grumman
Contract Overview
Contract Amount: $319,532,021 ($319.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2014-11-01
End Date: 2020-10-31
Contract Duration: 2,191 days
Daily Burn Rate: $145.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: IGF::OT::IGF PROGRAM MANAGEMENT, AIRCRAFT SUSTAINMENT/REPAIR OF JSTARS E-8C WEAPON SYSTEM
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $319.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF PROGRAM MANAGEMENT, AIRCRAFT SUSTAINMENT/REPAIR OF JSTARS E-8C WEAPON SYSTEM Key points: 1. Significant contract value for aircraft sustainment and repair. 2. Sole-source award to Northrop Grumman raises competition concerns. 3. Potential for cost overruns given Cost Plus Award Fee structure. 4. Engineering services sector, critical for defense readiness.
Value Assessment
Rating: questionable
The $319.5M award is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar complex aircraft sustainment services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition likely results in taxpayers paying a premium for these essential aircraft sustainment services.
Public Impact
Ensures continued operational readiness of the JSTARS E-8C fleet. Supports critical intelligence, surveillance, and reconnaissance missions. Impacts the defense industrial base and specialized engineering jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Award Fee contract type
- Lack of competition
Positive Signals
- Essential for national security missions
- Long-term sustainment of critical asset
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting complex defense systems. Benchmarks for similar sole-source sustainment contracts are often higher due to specialized knowledge and limited providers.
Small Business Impact
The data indicates this contract was awarded to a large corporation (Northrop Grumman) and does not mention any small business participation. There is no indication of subcontracting opportunities for small businesses.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Oversight is crucial for Cost Plus Award Fee contracts to ensure performance and control costs, especially in sole-source situations.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Award Fee structure may incentivize higher costs.
- Lack of transparency on justification for sole-sourcing.
- Potential for contractor to inflate costs to maximize fee.
- No indication of small business participation.
Tags
engineering-services, department-of-defense, fl, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $319.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF PROGRAM MANAGEMENT, AIRCRAFT SUSTAINMENT/REPAIR OF JSTARS E-8C WEAPON SYSTEM
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $319.5 million.
What is the period of performance?
Start: 2014-11-01. End: 2020-10-31.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, without a competitive process, ensuring fair and reasonable pricing requires rigorous government negotiation, independent cost analysis, and potentially market research to establish benchmarks. The absence of this information raises concerns about potential overpayment.
What are the potential risks associated with the Cost Plus Award Fee (CPAF) structure in this context?
CPAF contracts can incentivize contractor performance but also carry risks. The 'cost plus' element means the government pays incurred costs plus a fee. The 'award fee' portion is earned based on meeting performance targets. Risks include potential for inflated costs to maximize the base fee and the difficulty in objectively measuring performance metrics, which could lead to unwarranted fee awards.
How does the lack of competition impact the long-term cost-effectiveness of maintaining the JSTARS E-8C weapon system?
The lack of competition for this sustainment contract limits the government's ability to leverage market forces to drive down costs. Over time, without competitive pressure, Northrop Grumman may have less incentive to innovate or reduce expenses, potentially leading to higher sustainment costs for the JSTARS fleet throughout its lifecycle compared to a scenario with active competition.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32902
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $339,795,343
Exercised Options: $339,795,343
Current Obligation: $319,532,021
Subaward Activity
Number of Subawards: 193
Total Subaward Amount: $130,143,669
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F0960300D0210
IDV Type: IDC
Timeline
Start Date: 2014-11-01
Current End Date: 2020-10-31
Potential End Date: 2020-10-31 00:00:00
Last Modified: 2022-04-02
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