Northrop Dinged by Both Army and Air Force on Quality ConcernsBy
Sixteen planes had landing gear parts incorrectly installed
Contractor says it’s fixing flaws, has ‘commitment to quality’
Quality control on Northrop Grumman Corp.’s multibillion-dollar weapons systems is under scrutiny after the U.S. Army discovered problems with the contractor’s antimissile system for helicopters and the Air Force voiced fresh concern over its upkeep of surveillance aircraft.
The Army issued a delinquency notice to Northrop in June, Bloomberg News has learned, citing “poor contract performance related to initial supply and quality concerns” during the ongoing development phase of a new $3 billion system to equip copters with a laser that can jam incoming shoulder-fired missiles.
And the Air Force, which had already faulted Northrop’s performance on a $7 billion contract to maintain its Joint Stars air-to-ground surveillance aircraft, found during inspections that 16 of 17 aircraft had incorrectly installed parts on their main landing gear.
A contractor’s quality problems and difficulties in managing its subcontractors can raise safety questions for crews and affect a company’s annual performance scorecard prepared by the military services. The Defense Department considers a company’s past performance when contractors compete for new contracts.
“It’s troubling to think one of our biggest defense contractors can’t deliver aircraft with properly constructed landing gear,” Dan Grazier, a military systems analyst for the Project on Government Oversight, a watchdog group in Washington, said of the latest discoveries. “If they can’t get that right, then what does that say about the rest of their products? The services would be right to question Northrop’s ability to deliver in a future competition.”
‘Commitment to Quality’
Northrop defended its performance on both the Air Force and Army contracts. Asked about the work maintaining the surveillance aircraft, spokesman Tim Paynter said in an email that the company “remains steadfast in its commitment to quality and safety to ensure the high-demand Joint Stars fleet is mission-ready for America’s warfighters. We continuously implement operational and process improvements in partnership with our Air Force customer.”
On the Army’s antimissile system, Paynter said the company “remains committed to delivering this critical technology. Contractor flight testing, live-fire and guided weapons evaluation facility testing have all shown very positive results. Our team is working closely with the Army to achieve program milestones.”
Investors should keep an eye on the quality issues because “we don’t know how quickly these problems can be rectified,” Richard Aboulafia, a military analyst who follows Northrop for the Teal Group, said in an email. “If they linger they’ll hurt the company” in competitions “where execution risk may play a role in source selection.”
The missile-jamming device for Army helicopters is known as the Common Infrared Countermeasure program, or CIRCM. It’s intended to operate on helicopters and small aircraft as part of an integrated system that includes a warning alarm and a dispenser for flares and chaff.
“Initial supplier and quality problems” with the jamming device caused a six-month delay in equipping the first Army units, which had been scheduled between October and December 2018, the Army said in a statement.
Northrop responded to the notice with a corrective action plan and has been working to resolve the issues with the laser-based system, Colonel Jong Lee, the Army’s program manager for aircraft survivability, said in an email.
The jamming system is required to operate 214 hours between operational failures but is now falling well short of that goal: reliability in testing had decreased by August to 24 hours, according to a Pentagon assessment. Reliability growth “is expected to be volatile” during development, so the Army has set up an executive steering committee to monitor the issue, Lee said.
Late hardware deliveries “brought on by poor subcontract management” was one of the reasons the Army issued the delinquency notice, said Mark Woodbury, a spokesman for the Pentagon’s Defense Contract Management Agency, which participated in a program assessment resulting in the notice.
Before May, the agency “saw little subcontractor management” by Northrop, but since then there’s been improvement resulting in fewer defects, Woodbury said.
At the same time, the Air Force remains wary about the quality of Northrop depot maintenance on the Joint Stars aircraft at its facility in Lake Charles, Louisiana. A review completed earlier this year, and previously reported by Bloomberg News, found major deficiencies such as incorrectly installed bolts on six of seven aircraft inspected. The service is seeking at least $7.3 million in reimbursement from Northrop for water damage to one aircraft discovered in July 2016.
Northrop is performing Joint Stars maintenance under a $7 billion “total system support contract” awarded in September 2000 that had a six-year base with 16 annual options.
$7 Billion Competition
Improving quality is especially important to Northrop because the Air Force is evaluating whether to continue a $7 billion competition pitting it against Boeing Co. and Lockheed Martin to replace the aging Joint Stars planes or pursue other surveillance technologies, Aboulafia said. Air Force officials have said the current aircraft will stay in operation until 2023, meaning Northrop would likely remain the depot contractor.
“Northrop continues to make process improvements at their Lake Charles depot; however, the Air Force is still concerned about quality escapes and the large number of aircraft still at the depot,” General Ellen Pawlikowski, head of the Air Force Materiel Command, said in an email.
The most recent trouble sign emerged from a routine base inspection by Air Force personnel in August. They discovered a plane that had incorrect hardware on its main landing gear installed during depot maintenance. There were an “incorrect number of washers underneath nuts or bolts incorrectly torqued,” Air Force Colonel Ray Wier, chief of the service’s battle management division, which oversees Joint Stars, said in an email.
“This condition was found on 16 of 17 aircraft and was either corrected immediately or will be fixed at the next depot maintenance,” he said. “We ensured any aircraft with a safety concern were immediately repaired” and “others that did not have current safety concerns were deferred to their next planned depot visit,” he said.
“Currently there are six aircraft in depot, and of the six, three have been in depot longer than planned and longer than the average depot duration,” Wier said.