Boeing Awarded $1.65B for 5 USAF Aircraft in FY10, Lacking Competition
Contract Overview
Contract Amount: $1,655,050,154 ($1.7B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2011-05-13
End Date: 2013-07-31
Contract Duration: 810 days
Daily Burn Rate: $2.0M/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY10 UCA FOR 5 USAF A/C
Place of Performance
Location: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90808
Plain-Language Summary
Department of Defense obligated $1.66 billion to THE BOEING COMPANY for work described as: FY10 UCA FOR 5 USAF A/C Key points: 1. Significant contract value of $1.65 billion for aircraft manufacturing. 2. Sole-source award raises concerns about price discovery and potential overpayment. 3. Limited competition is a key risk factor for taxpayer value. 4. The defense sector often sees large, complex contracts like this.
Value Assessment
Rating: questionable
The contract value of $1.65 billion for 5 aircraft is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar contracts, raising questions about whether the government received the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition limits the government's ability to leverage market forces to achieve lower prices and potentially better terms.
Taxpayer Impact: The absence of competition suggests taxpayers may have paid a premium for these aircraft, as there was no pressure on the contractor to offer the most cost-effective solution.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding. The Department of Defense received 5 aircraft, impacting military readiness. The long duration of the contract (810 days) suggests a complex acquisition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Potential for cost overruns
Positive Signals
- Awarded to a major defense contractor
- Firm Fixed Price contract type
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industry. Spending in this sector is often characterized by high R&D costs, long production cycles, and significant government investment.
Small Business Impact
This contract was awarded to The Boeing Company, a large prime contractor. There is no indication of small business participation in the provided data, suggesting this award did not directly benefit small businesses.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Further oversight would be needed to confirm if appropriate cost controls and performance monitoring were in place, especially given the sole-source nature.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- High dollar value
- Lack of transparency in pricing
- Potential for contractor inefficiency
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.66 billion to THE BOEING COMPANY. FY10 UCA FOR 5 USAF A/C
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.66 billion.
What is the period of performance?
Start: 2011-05-13. End: 2013-07-31.
What was the justification for the sole-source award, and how was the price determined to be fair and reasonable?
The justification for a sole-source award is crucial for understanding the acquisition strategy. Without competition, the agency must have a documented rationale, such as a unique capability or urgent need. The price determination process, often involving detailed cost analysis and negotiation, is vital to ensure fair value for taxpayers. A thorough review of the contract file would be necessary to assess these aspects.
What are the potential risks associated with a sole-source award of this magnitude in the defense sector?
Sole-source awards of this magnitude carry significant risks. The primary concern is the lack of price competition, which can lead to inflated costs for taxpayers. Additionally, it can reduce incentives for the contractor to innovate or improve efficiency. There's also a risk of vendor lock-in, making future procurements more expensive and less flexible. Effective oversight is paramount to mitigate these risks.
How does the firm fixed price contract type impact the overall value and risk for this sole-source aircraft acquisition?
A firm fixed price (FFP) contract aims to transfer risk to the contractor, providing cost certainty for the buyer. For this sole-source award, FFP is beneficial as it caps the government's liability. However, the absence of competition means the initial price might be higher than in a competitive scenario. The contractor bears the risk of cost overruns, but the government relies heavily on the initial price negotiation's fairness.
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
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2401 E WARDLOW RD, LONG BEACH, CA, 90807
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $1,655,882,766
Exercised Options: $1,655,882,766
Current Obligation: $1,655,050,154
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA861406D2006
IDV Type: IDC
Timeline
Start Date: 2011-05-13
Current End Date: 2013-07-31
Potential End Date: 2013-07-31 00:00:00
Last Modified: 2024-07-17
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