DoD's $190M KC-10 Contractor Logistics Support contract awarded to Northrop Grumman
Contract Overview
Contract Amount: $189,998,284 ($190.0M)
Contractor: Northrop Grumman Technical Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2016-10-01
End Date: 2017-09-30
Contract Duration: 364 days
Daily Burn Rate: $522.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST NO FEE
Sector: Defense
Official Description: IGF::OT::IGF KC-10 CONTRACTOR LOGISTICS SUPPORT (CLS)
Place of Performance
Location: HERNDON, FAIRFAX County, VIRGINIA, 20171
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $190.0 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC. for work described as: IGF::OT::IGF KC-10 CONTRACTOR LOGISTICS SUPPORT (CLS) Key points: 1. Significant contract value for specialized aircraft support. 2. Northrop Grumman is a major defense contractor, indicating established capabilities. 3. Potential risks include reliance on a single contractor for critical logistics. 4. The 'Other Support Activities for Air Transportation' sector is vital for military readiness.
Value Assessment
Rating: good
The contract's Cost No Fee (CNF) structure incentivizes contractor efficiency. The awarded amount of $189.9M for one year of support appears reasonable given the complexity of maintaining a large tanker fleet.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process that should drive favorable pricing. The Delivery Order (DO) mechanism allows for task-specific awards.
Taxpayer Impact: Competition in this award is expected to yield fair pricing, minimizing unnecessary taxpayer expenditure for essential logistics services.
Public Impact
Ensures continued operational readiness of the KC-10 fleet. Supports critical air refueling and transport capabilities for the U.S. Air Force. Maintains employment for personnel involved in logistics and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope expands beyond initial estimates.
- Dependence on a single contractor could limit flexibility.
- Risk of supply chain disruptions affecting parts availability.
Positive Signals
- Full and open competition promotes cost-effectiveness.
- Contractor's experience in aerospace logistics.
- Clear performance period and defined scope.
Sector Analysis
This contract falls within the aerospace and defense logistics sector, which is crucial for maintaining military aviation assets. Spending benchmarks for similar support contracts can vary widely based on aircraft type and service scope.
Small Business Impact
No specific information is provided regarding small business participation in this contract. Large prime contractors often subcontract to smaller businesses, but direct involvement is not indicated here.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for oversight, ensuring contract compliance and performance. The CNF pricing structure requires careful monitoring of contractor costs and efficiency.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Contract duration is relatively short (1 year), potentially leading to frequent re-competition costs.
- Reliance on a single source for critical components or specialized knowledge.
- Potential for scope creep if unforeseen maintenance issues arise.
- Lack of transparency on small business subcontracting.
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 $190.0 million to NORTHROP GRUMMAN TECHNICAL SERVICES, INC.. IGF::OT::IGF KC-10 CONTRACTOR LOGISTICS SUPPORT (CLS)
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 $190.0 million.
What is the period of performance?
Start: 2016-10-01. End: 2017-09-30.
What is the historical cost performance of Northrop Grumman on similar KC-10 CLS contracts?
Historical cost performance data for Northrop Grumman on similar KC-10 CLS contracts would provide valuable insight into their efficiency and potential for cost overruns. Analyzing past contract expenditures against budgeted amounts and performance metrics can reveal trends in cost management and identify areas where the contractor has excelled or struggled, informing future pricing negotiations and oversight strategies.
What are the key performance indicators (KPIs) used to measure the effectiveness of this logistics support?
Key performance indicators for this contract likely include aircraft availability rates, response times for maintenance and repair, parts fulfillment accuracy, and adherence to scheduled maintenance. Measuring these KPIs ensures the contractor is meeting the critical operational needs of the KC-10 fleet and maintaining the required readiness levels for the Air Force's air refueling and transport missions.
How does the cost of this contract compare to industry benchmarks for similar aircraft logistics support?
Comparing the per-unit cost or total contract value against industry benchmarks for similar large military aircraft logistics support is essential for assessing value. Factors like aircraft age, complexity of systems, and required service levels influence these benchmarks. A detailed comparison would reveal if this $190M award represents an efficient use of taxpayer funds or if there are opportunities for cost savings in future solicitations.
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: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
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: $189,998,284
Exercised Options: $189,998,284
Current Obligation: $189,998,284
Subaward Activity
Number of Subawards: 510
Total Subaward Amount: $1,908,551,305
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA810610D0001
IDV Type: IDC
Timeline
Start Date: 2016-10-01
Current End Date: 2017-09-30
Potential End Date: 2018-04-13 00:00:00
Last Modified: 2022-10-20
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