Air Force awards $19.3M for KC-135 aircraft parts, with no competition

Contract Overview

Contract Amount: $19,324,776 ($19.3M)

Contractor: Mcdonnell Douglas Corp

Awarding Agency: Department of Defense

Start Date: 2009-11-09

End Date: 2012-09-30

Contract Duration: 1,056 days

Daily Burn Rate: $18.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-135 R/T/D & E MODELS (PDM) OPTION V

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78226

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to MCDONNELL DOUGLAS CORP for work described as: KC-135 R/T/D & E MODELS (PDM) OPTION V Key points: 1. The contract focuses on sustainment for a critical aging aircraft fleet. 2. Lack of competition raises concerns about potential overpayment and reduced value. 3. The contract's duration and fixed-price nature suggest some cost certainty. 4. This spending supports the operational readiness of a key strategic asset. 5. The specific parts procured are essential for maintaining the KC-135's airworthiness.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. The $19.3 million awarded over approximately three years for aircraft parts suggests a significant investment in maintaining the KC-135 fleet. Without comparable contract data or market analysis, it's difficult to definitively assess if the pricing represents good value for money. The fixed-price nature provides some predictability, but the absence of competition limits the government's ability to secure the best possible terms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is often used when a specific contractor is the only source for a required good or service, or in urgent situations. However, the lack of competition means the government did not explore potential cost savings or alternative solutions that might have been available through a competitive bidding process. This can lead to higher prices and less innovation.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft parts due to the absence of competitive pressure to drive down costs. The government missed an opportunity to leverage market forces to ensure the most economical purchase.

Public Impact

The primary beneficiaries are the U.S. Air Force and its aircrews who rely on the KC-135 Stratotanker for aerial refueling and strategic airlift. The services delivered include the provision of essential parts for the Planned Depot Maintenance (PDM) of KC-135 R/T/D & E models. The geographic impact is national, supporting Air Force operations across various bases. Workforce implications include ensuring the continued employment of maintenance personnel and flight crews dependent on the KC-135's operational status.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer dollars.
Sole-source awards can limit the government's ability to explore innovative solutions or alternative suppliers.
The aging nature of the KC-135 fleet necessitates ongoing, potentially costly, sustainment efforts.

Positive Signals

The contract addresses the sustainment of a critical, long-serving military aircraft, ensuring operational readiness.
The fixed-price contract type offers some predictability in terms of cost for the government.
The award supports the continued availability of a vital asset for national defense.

Sector Analysis

The aerospace manufacturing and maintenance sector is characterized by high technological complexity, significant R&D investment, and stringent regulatory requirements. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sub-sector. Spending in this area is crucial for maintaining the operational readiness of military fleets. Comparable spending benchmarks are difficult to establish without more specific part details, but sustainment of aging aircraft fleets represents a substantial and ongoing portion of defense budgets.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. The prime contractor, McDonnell Douglas Corp (now part of Boeing), is a large aerospace manufacturer. There is no explicit information provided regarding subcontracting plans to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though large prime contractors often engage small businesses for various components and services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, scrutiny might be higher to ensure the necessity and fair pricing. Transparency is limited by the lack of competitive bidding documentation. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged during the contract's performance or execution.

Related Government Programs

KC-135 Stratotanker Sustainment Programs
Air Force Aircraft Parts Procurement
Defense Logistics Agency (DLA) Aviation Support
Department of Defense Aircraft Maintenance Contracts

Risk Flags

Sole-source award
Potential for price inflation due to lack of competition
Aging aircraft sustainment costs
Limited transparency on specific parts and pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to MCDONNELL DOUGLAS CORP. KC-135 R/T/D & E MODELS (PDM) OPTION V

Who is the contractor on this award?

The obligated recipient is MCDONNELL DOUGLAS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $19.3 million.

What is the period of performance?

Start: 2009-11-09. End: 2012-09-30.

What is the historical spending trend for KC-135 PDM parts with McDonnell Douglas Corp or its successors?

Analyzing historical spending for KC-135 PDM parts with McDonnell Douglas Corp (and subsequently Boeing) requires access to detailed contract databases and financial records. Without specific data points on prior awards for similar parts or services, it's challenging to establish a precise trend. However, it is generally understood that sustainment costs for aging fleets like the KC-135 tend to increase over time due to factors such as parts obsolescence, increased repair complexity, and the need for specialized support. The $19.3 million awarded in this instance should be viewed in the context of the overall lifecycle costs associated with maintaining these aircraft, which can span decades and involve billions in cumulative spending.

How does the per-unit cost of these KC-135 parts compare to similar components for other aircraft types?

A direct per-unit cost comparison of KC-135 parts to those for other aircraft types is difficult without knowing the specific part numbers and their complexity. However, military aircraft parts, especially for specialized platforms like the KC-135, are often significantly more expensive than commercial equivalents due to stringent military specifications, rigorous testing, and lower production volumes. The KC-135, being a long-serving aircraft, may also face higher costs associated with parts that are no longer in mass production. Benchmarking would ideally involve comparing costs against similar components within the KC-135 program or against parts for other large military transport/refueling aircraft, but such data is not readily available for this sole-source award.

What are the specific risks associated with procuring parts for an aging aircraft fleet like the KC-135?

Procuring parts for aging aircraft fleets like the KC-135 presents several risks. Firstly, parts obsolescence is a major concern; original manufacturers may cease production, requiring the Air Force to source parts from secondary markets, remanufacture them, or develop alternatives, all of which can be costly and time-consuming. Secondly, the availability of skilled labor to manufacture or repair specialized parts may diminish over time. Thirdly, the cost of sustainment tends to increase as the fleet ages, potentially exceeding initial projections. Finally, reliance on sole-source suppliers for critical components, as seen in this contract, increases vulnerability to price hikes and supply chain disruptions.

What is the track record of McDonnell Douglas Corp (and its successor Boeing) in supplying parts for the KC-135 program?

McDonnell Douglas Corporation, and subsequently its successor Boeing, has a long-standing and extensive track record as the prime contractor and primary supplier for the KC-135 Stratotanker program. They were responsible for the original production of the aircraft and have been involved in its sustainment, upgrades, and parts provisioning for decades. This deep historical involvement suggests a high level of familiarity with the aircraft's systems and component requirements. While specific performance metrics for individual parts contracts are not publicly detailed, their continued role in supporting the KC-135 indicates a generally accepted capability to meet the Air Force's sustainment needs for this critical platform.

How does the 'NOT COMPETED' status impact the government's ability to ensure fair and reasonable pricing?

The 'NOT COMPETED' status, indicating a sole-source or non-competitive award, significantly hinders the government's ability to ensure fair and reasonable pricing. In a competitive environment, multiple bids allow the government to compare prices, negotiate better terms, and leverage market forces to achieve the lowest possible cost. When competition is absent, the government relies heavily on the contractor's proposed pricing and internal cost structures, which may not be optimized for efficiency or cost-effectiveness. While contracting officers are still required to determine price reasonableness, this process is more challenging and less robust without the benefit of competing offers. This can potentially lead to higher costs for taxpayers.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 375 AIRLIFT DRIVE, SAN ANTONIO, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,324,776

Exercised Options: $19,324,776

Current Obligation: $19,324,776

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810505D0004

IDV Type: IDC

Timeline