DoD Awards Northrop Grumman $828M for E-2D Advanced Hawkeye Aircraft Manufacturing
Contract Overview
Contract Amount: $828,394,056 ($828.4M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2012-02-01
End Date: 2020-03-19
Contract Duration: 2,969 days
Daily Burn Rate: $279.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: E-2D ADVANCED HAWKEYE AIRCRAFT (FRP-1)
Place of Performance
Location: MELBOURNE, BREVARD County, FLORIDA, 32904
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $828.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: E-2D ADVANCED HAWKEYE AIRCRAFT (FRP-1) Key points: 1. Significant contract value of $828.4 million for aircraft manufacturing. 2. Sole-source award to Northrop Grumman Systems Corporation indicates limited competition. 3. Potential risk associated with a sole-source procurement, impacting price discovery. 4. Spending falls within the Defense sector, specifically aircraft manufacturing.
Value Assessment
Rating: fair
The contract value of $828.4 million for E-2D Advanced Hawkeye aircraft is substantial. Without specific per-unit cost data or benchmarks for similar advanced aircraft programs, a precise pricing assessment is difficult. However, the lack of competition suggests potential for higher pricing than in a competitive environment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Northrop Grumman Systems Corporation, was solicited. This significantly limits price discovery and competitive pressure, potentially leading to less favorable pricing for the government.
Taxpayer Impact: The sole-source nature of this award may result in higher costs for taxpayers compared to a competitively bid contract, as the government lacks the benefit of multiple offers to drive down prices.
Public Impact
Ensures continued production of critical E-2D Advanced Hawkeye aircraft for national defense. Supports a major defense contractor and its supply chain, potentially preserving jobs. Highlights the government's reliance on specialized, high-cost defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement limits competition and price negotiation.
- Lack of small business participation noted.
- Long contract duration (2969 days) increases exposure to cost fluctuations.
Positive Signals
- Procurement of a critical defense asset.
- Award to an established defense contractor with proven capabilities.
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing (NAICS 336411). Spending in this sector is characterized by high R&D costs, complex supply chains, and often long procurement cycles. Benchmarks for similar advanced military aircraft programs are typically in the hundreds of millions to billions of dollars.
Small Business Impact
The data indicates that small businesses were not directly involved in this specific contract award (sb: false). Large defense contracts often involve complex subcontracting, but direct small business participation is not evident here, which could be a missed opportunity for economic inclusion.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet contractual requirements and quality standards. However, the sole-source nature of the award warrants close oversight to ensure fair pricing and value.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- No explicit small business participation.
- Long contract duration increases risk exposure.
Tags
aircraft-manufacturing, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $828.4 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. E-2D ADVANCED HAWKEYE AIRCRAFT (FRP-1)
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 $828.4 million.
What is the period of performance?
Start: 2012-02-01. End: 2020-03-19.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. Without further details, it's difficult to assess if alternative competitive strategies were thoroughly explored. Agencies often cite national security or specialized requirements to justify sole-source procurements, but this limits the government's ability to leverage market competition for better pricing and innovation.
How does the per-unit cost of the E-2D Advanced Hawkeye compare to similar advanced surveillance or command aircraft?
Direct per-unit cost comparison is challenging without specific data points from this contract and publicly available benchmarks for comparable advanced aircraft. However, the E-2D is a highly specialized platform with significant technological sophistication, suggesting a high per-unit cost. Sole-source awards inherently make it harder to determine if the price achieved is competitive relative to what could be obtained through open competition.
What measures are in place to ensure cost control and value for money given the sole-source nature of this large contract?
Given the sole-source nature, robust oversight by the Defense Contract Management Agency (DCMA) is crucial. This includes monitoring contractor performance, verifying costs, and ensuring adherence to the firm-fixed-price terms. However, the inherent lack of competition limits the government's leverage in negotiating price reductions. Continuous evaluation of the program's overall value and potential future competitive opportunities is essential.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001911R0096
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 2000 W NASA BLVD, MELBOURNE, FL, 32904
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $828,394,056
Exercised Options: $828,394,056
Current Obligation: $828,394,056
Subaward Activity
Number of Subawards: 951
Total Subaward Amount: $1,866,412,382
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-02-01
Current End Date: 2020-03-19
Potential End Date: 2020-03-19 00:00:00
Last Modified: 2023-06-14
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