DoD's $42.8M contract for aircraft hot trailing edge parts awarded to Northrop Grumman, a sole-source acquisition

Contract Overview

Contract Amount: $42,838,512 ($42.8M)

Contractor: Northrop Grumman Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2019-09-13

End Date: 2024-10-01

Contract Duration: 1,845 days

Daily Burn Rate: $23.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AIRCRAFT, HOT TRAILING EDGE AIRCRAFT, HOT TRAILING EDGE

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45430

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $42.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: AIRCRAFT, HOT TRAILING EDGE AIRCRAFT, HOT TRAILING EDGE Key points: 1. The contract value of $42.8 million for aircraft hot trailing edge components represents a significant investment in specialized aerospace parts. 2. Sole-source procurement raises questions about potential price inflation and lack of competitive pressure to drive down costs. 3. The extended performance period of over five years suggests a long-term need for these critical aircraft components. 4. The absence of competition indicates a potential lack of alternative suppliers or a strategic decision to contract with a specific entity. 5. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, highlighting its specific industrial focus.

Value Assessment

Rating: questionable

Benchmarking the value of this $42.8 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The firm-fixed-price structure provides some cost certainty, but the lack of competition means there's no direct comparison to other suppliers' pricing for similar hot trailing edge components. Further analysis would require access to cost breakdowns or historical pricing data for this specific part.

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 approach is typically used when only one responsible source is available or when there's a compelling justification for excluding competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for these aircraft parts due to the absence of competitive bidding. The government did not benefit from the cost-saving pressures that typically arise from multiple vendors vying for a contract.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the availability of critical aircraft components for its fleet. The services delivered involve the manufacturing and supply of specialized 'hot trailing edge' parts for aircraft. The geographic impact is primarily tied to the operations of Northrop Grumman, likely within their manufacturing facilities. Workforce implications include the employment of skilled labor in aerospace manufacturing at the contractor's site.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Dependence on a single supplier for critical aircraft components creates supply chain risk.
Limited opportunities for other manufacturers to participate and innovate in this niche market.

Positive Signals

Ensures supply of critical, potentially specialized, aircraft components.
Firm-fixed-price contract provides cost predictability for the government.
Long-term contract (over 5 years) offers stability for supply chain management.
Award to a known entity (Northrop Grumman) may leverage existing expertise and established quality control.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically focusing on aircraft parts. The market for specialized components like 'hot trailing edge' parts is often characterized by high barriers to entry due to technical expertise, stringent quality requirements, and established relationships with defense contractors. Spending in this sub-sector is driven by military readiness and aircraft sustainment needs. Comparable spending benchmarks would typically involve other sole-source or limited-competition contracts for similar high-value, specialized aerospace components.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large corporation, there are no direct subcontracting implications for small businesses stemming from this specific award mechanism. The absence of a competitive bidding process also limits opportunities for small businesses to enter the supply chain for these specific components.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. The Defense Contract Management Agency (DCMA) likely provides oversight for performance and quality. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Northrop Grumman Defense Contracts
Sole-Source Defense Procurements
Aerospace Component Supply

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for price inflation
Long-term contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.8 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. AIRCRAFT, HOT TRAILING EDGE AIRCRAFT, HOT TRAILING EDGE

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $42.8 million.

What is the period of performance?

Start: 2019-09-13. End: 2024-10-01.

What is the historical spending pattern for aircraft hot trailing edge parts by the Department of Defense?

Analyzing historical spending patterns for 'aircraft hot trailing edge' parts requires access to detailed procurement databases. However, general trends in defense spending on aircraft components are often driven by fleet modernization, maintenance schedules, and operational tempo. Contracts for specialized parts like these can fluctuate based on specific aircraft programs and their sustainment requirements. Without specific historical data for this exact component, it's difficult to provide precise figures. However, the overall defense budget allocates significant resources to aircraft sustainment and parts, suggesting a consistent, albeit variable, demand for such items over time. The $42.8 million awarded here represents a substantial, single-award commitment for a specific part category.

What are the specific technical requirements for 'hot trailing edge' aircraft parts?

The term 'hot trailing edge' in aviation typically refers to the trailing edge of a wing or airfoil that experiences high temperatures during flight, often due to aerodynamic heating at high speeds or from engine exhaust. These components are critical for maintaining the structural integrity and aerodynamic performance of the aircraft under extreme conditions. Manufacturing such parts requires specialized materials (e.g., high-temperature alloys), precise engineering, and rigorous testing to ensure they can withstand thermal stress, vibration, and fatigue. The exact technical specifications would be detailed in the contract's Statement of Work (SOW) and would include material composition, dimensional tolerances, performance criteria, and quality assurance protocols. These requirements often necessitate specialized manufacturing capabilities, contributing to the limited number of potential suppliers.

What is Northrop Grumman's track record with similar sole-source defense contracts?

Northrop Grumman Systems Corporation is a major defense contractor with extensive experience across various aerospace and defense programs. They frequently engage in sole-source and limited-competition contracts, particularly for highly specialized systems, components, or sustainment services where they possess unique capabilities or are the incumbent provider. Their track record typically involves large-scale, complex projects. While specific details on all sole-source awards are not publicly itemized, their history suggests a pattern of securing such contracts due to their established position, technological expertise, and existing infrastructure supporting defense platforms. Evaluating their performance on specific sole-source contracts would require examining individual contract performance reports and any associated oversight findings.

How does the firm-fixed-price (FFP) contract type mitigate risk for the government in this sole-source scenario?

The firm-fixed-price (FFP) contract type offers a degree of risk mitigation for the government, even in a sole-source acquisition. Under an FFP contract, the contractor agrees to a total price, and that price is not subject to adjustment based on the contractor's cost experience in performing the work. This provides cost certainty for the government, as the final price is established upfront. While the contractor assumes the risk of cost overruns, the government is protected from unexpected increases in the contract value. However, in a sole-source situation, the initial FFP may be set at a higher baseline due to the lack of competitive pressure. Therefore, while FFP provides cost predictability, it does not inherently guarantee the best possible price without competition.

Are there any known performance issues or concerns associated with Northrop Grumman's supply of aircraft parts?

Assessing specific performance issues for Northrop Grumman on this particular contract requires access to detailed performance reports and contract administration data, which are not publicly available in this context. Generally, large defense contractors like Northrop Grumman are subject to performance evaluations and quality assurance processes. While major issues are often flagged through contract close-outs or specific oversight reports (e.g., from the Government Accountability Office or Inspector General), routine performance metrics for individual components are typically managed internally by the contracting agency. Any significant, systemic performance problems would likely be reflected in contract modifications, disputes, or future procurement decisions, but without specific data, it's not possible to confirm issues for this contract.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRTA118R0152

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 6401 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135

Business Categories: Category Business, Corporate Entity Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,838,512

Exercised Options: $42,838,512

Current Obligation: $42,838,512

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRTA119D0001

IDV Type: IDC

Timeline