DoD spent $24.3M on aircraft parts, with Boeing receiving the largest share

Contract Overview

Contract Amount: $24,312,832 ($24.3M)

Contractor: Boeing Aerospace Operations, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-10-07

End Date: 2013-02-28

Contract Duration: 875 days

Daily Burn Rate: $27.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78226

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to BOEING AEROSPACE OPERATIONS, INC. for work described as: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING Key points: 1. Contract value represents a moderate investment in specialized aircraft components. 2. Competition was robust, suggesting potential for favorable pricing. 3. Performance period was relatively short, indicating a focus on immediate needs. 4. Fixed-price contract type shifts risk to the contractor. 5. Geographic concentration in Texas for contract performance. 6. Contract aligns with broader defense spending on aircraft sustainment.

Value Assessment

Rating: good

The contract value of $24.3 million for aircraft parts is within a typical range for specialized components. Benchmarking against similar contracts for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) would reveal if the pricing per unit or overall value was competitive. Given the firm fixed-price structure, the government's exposure to cost overruns is limited, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders, the competition level suggests a healthy market for these specific aircraft parts. This level of competition generally leads to better price discovery and can result in more favorable terms for the government.

Taxpayer Impact: The full and open competition process, with multiple bidders, likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The Department of Defense benefits from the supply of critical aircraft parts. Aviation readiness and operational capabilities are supported by this contract. Boeing Aerospace Operations, Inc. is the primary contractor, indicating a significant role for a major defense supplier. The contract supports jobs within the aerospace manufacturing sector, particularly in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific parts are proprietary.
Reliance on a single large contractor could limit future competition.
Geographic concentration of performance in Texas could be a logistical consideration.

Positive Signals

Full and open competition suggests a healthy market and potential for cost savings.
Firm fixed-price contract type transfers cost risk to the contractor.
Award to a well-established aerospace company like Boeing implies a degree of reliability.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector (NAICS 336413), a critical segment of the broader aerospace and defense industry. The market for aircraft parts is substantial, driven by military and commercial aviation needs. Spending in this area is essential for maintaining aging fleets and supporting new aircraft programs. Comparable spending benchmarks would typically be found within the Department of Defense's overall aircraft sustainment and procurement budgets.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false) and there is no indication of subcontracting goals for small businesses (sb=false). This suggests that the primary award went to a large business, and opportunities for small businesses would likely be through direct subcontracting by Boeing, rather than a mandated set-aside. The impact on the small business ecosystem is therefore indirect.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of accountability by capping the government's financial liability. Transparency is generally maintained through contract award databases, though specific performance details might be sensitive.

Related Government Programs

Department of Defense Aircraft Procurement
Defense Logistics Agency Aviation Support
Aerospace Manufacturing and Repair Services

Risk Flags

Potential for sole-source dependency if parts are highly specialized.
Geographic concentration risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to BOEING AEROSPACE OPERATIONS, INC.. OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

Who is the contractor on this award?

The obligated recipient is BOEING AEROSPACE OPERATIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $24.3 million.

What is the period of performance?

Start: 2010-10-07. End: 2013-02-28.

What is the historical spending trend for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of Defense?

Analyzing historical spending for NAICS code 336413 by the Department of Defense reveals trends in investment in aircraft components. While this specific contract was awarded in 2010 for $24.3 million, broader DoD spending in this category fluctuates based on fleet modernization needs, sustainment requirements for aging aircraft, and the introduction of new platforms. For instance, periods of increased operational tempo or significant fleet upgrades often correlate with higher spending in this sector. Conversely, budget constraints or shifts in defense priorities can lead to reduced investment. Understanding these patterns provides context for the significance of individual contract awards and the overall strategic importance of this manufacturing segment to national defense.

How does the number of bidders on this contract compare to similar DoD aircraft parts contracts?

The presence of three bidders for this 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' contract (NAICS 336413) suggests a moderate level of competition. To assess this further, a comparison with similar contracts awarded by the DoD within a comparable timeframe and for similar types of parts is necessary. If the average number of bidders for comparable contracts is significantly higher (e.g., 5-7 bidders), it might indicate that this particular market segment is less competitive or that the specific parts required were highly specialized, limiting the pool of qualified vendors. Conversely, if 3 bidders is typical, it suggests a healthy, albeit not hyper-competitive, market. A lower number of bidders can sometimes lead to higher prices for the government.

What are the key performance indicators (KPIs) typically used for contracts of this nature?

For contracts involving the manufacturing and supply of aircraft parts, key performance indicators (KPIs) often focus on delivery timeliness, quality conformance, and cost control. Delivery timeliness is critical to ensure aircraft availability and minimize operational downtime. Quality conformance is paramount, as defects in aircraft components can have severe safety implications; therefore, adherence to stringent specifications and standards is closely monitored. While this contract is firm fixed-price, limiting cost-related KPIs for the government, tracking the contractor's ability to meet production schedules without cost overruns (even if borne by the contractor) can be an indicator of their operational efficiency. Compliance with technical specifications and successful acceptance testing are also crucial KPIs.

What is Boeing Aerospace Operations, Inc.'s track record with DoD aircraft parts contracts?

Boeing Aerospace Operations, Inc. has a long and extensive track record as a major contractor for the Department of Defense, including numerous contracts related to aircraft parts and components. Their history spans decades, encompassing the supply of parts for a wide array of military aircraft, from fighter jets to transport planes and helicopters. This includes both original equipment manufacturing and sustainment support. Given their position as a primary aircraft manufacturer, their involvement in supplying parts is a natural extension of their core business. Performance on these contracts is generally evaluated based on delivery schedules, quality, and adherence to technical specifications. While specific performance metrics for individual contracts are often not public, Boeing's continued large-scale engagement with the DoD suggests a generally reliable performance history.

How does the firm fixed-price (FFP) contract type impact risk allocation compared to other contract types?

The Firm Fixed-Price (FFP) contract type, as used in this $24.3 million award, places the majority of the cost risk on the contractor, Boeing Aerospace Operations, Inc. Under FFP, the price is set and not subject to adjustment based on the contractor's actual costs. This means that if Boeing's costs to produce the aircraft parts exceed their estimates, their profit margin will decrease, or they could incur a loss. Conversely, if their costs are lower than anticipated, their profit will be higher. This contrasts sharply with cost-reimbursement contracts, where the government bears most of the cost risk, agreeing to pay the contractor's allowable costs plus a fee. FFP incentivizes the contractor to control costs and improve efficiency to maximize profit, offering the government the most price certainty.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 375 AIRLIFT DR SECOND FL C43, SAN ANTONIO, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,312,832

Exercised Options: $24,312,832

Current Obligation: $24,312,832

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810507D0002

IDV Type: IDC

Timeline