DoD's $15.6M Engineering Services Contract with Boeing Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $15,602,010 ($15.6M)
Contractor: Boeing Company, the
Awarding Agency: Department of Defense
Start Date: 2009-05-28
End Date: 2012-12-30
Contract Duration: 1,312 days
Daily Burn Rate: $11.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: RESEARCH & DEVELOPMENT TASKING
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215, UNITED STATES OF AMERICA
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $15.6 million to BOEING COMPANY, THE for work described as: RESEARCH & DEVELOPMENT TASKING Key points: 1. Significant contract value awarded to a single large business. 2. Lack of competition raises questions about price discovery and potential overpayment. 3. Long contract duration and cost-plus structure may increase risk. 4. Engineering services sector is critical but requires careful oversight.
Value Assessment
Rating: questionable
The $15.6 million contract awarded to Boeing for engineering services lacks a clear benchmark for comparison due to its sole-source nature. The cost-plus fixed fee structure, without competitive bidding, makes it difficult to assess if the pricing is optimal or if taxpayers received the best value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government compared to a competitive environment. The rationale for not competing is not provided.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for engineering services, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The long duration of the contract (over 3 years) could mask inefficiencies. Reliance on a single large contractor for critical engineering services warrants scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Long contract duration
Positive Signals
- Awarded to a known large defense contractor
- Contract supports critical defense needs
Sector Analysis
This contract falls within the Engineering Services sector, which is vital for defense projects. Benchmarks for similar sole-source engineering contracts are difficult to establish, but competitive procurements typically yield better pricing.
Small Business Impact
The contract was awarded to Boeing, a large business, and there is no indication of small business participation. This award does not appear to support small business goals.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure cost control and performance. The Department of Defense should have robust internal controls to justify non-competitive awards and monitor expenditures closely.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Sole-source award
- Potential for cost overruns
- Limited transparency on pricing
Tags
engineering-services, department-of-defense, az, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.6 million to BOEING COMPANY, THE. RESEARCH & DEVELOPMENT TASKING
Who is the contractor on this award?
The obligated recipient is BOEING COMPANY, THE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $15.6 million.
What is the period of performance?
Start: 2009-05-28. End: 2012-12-30.
What was the justification for awarding this significant engineering services contract on a sole-source basis rather than through competition?
The provided data does not include the justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without this information, it's impossible to assess the validity of the non-competitive decision.
How does the cost-plus fixed fee structure impact the government's risk and potential for cost overruns in this contract?
The cost-plus fixed fee (CPFF) structure means the government reimburses the contractor for allowable costs plus a predetermined fixed fee. While the fee is fixed, the total cost to the government can vary significantly if actual costs exceed estimates. This shifts much of the cost risk to the government, potentially leading to overruns if not managed tightly.
What mechanisms are in place to ensure the effectiveness and efficiency of the engineering services provided by Boeing under this contract?
Effectiveness and efficiency are typically ensured through detailed performance work statements, key performance indicators, regular progress reviews, and acceptance criteria. Given the sole-source nature and CPFF structure, rigorous government oversight and performance monitoring are crucial to ensure Boeing delivers the required engineering services effectively and efficiently within the contract's scope.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Boeing Company (UEI: 009256819)
Address: 5000 E MCDOWELL ROAD, MESA, AZ, 85215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $15,890,106
Exercised Options: $15,890,106
Current Obligation: $15,602,010
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0042109G0005
IDV Type: IDC
Timeline
Start Date: 2009-05-28
Current End Date: 2012-12-30
Potential End Date: 2012-12-30 00:00:00
Last Modified: 2015-09-18
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