DoD awards $238.7M to Boeing for MH-47G helicopter advance procurement, a sole-source contract
Contract Overview
Contract Amount: $238,683,874 ($238.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2012-03-08
End Date: 2015-10-31
Contract Duration: 1,332 days
Daily Burn Rate: $179.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MH-47G LOT 9 ADVANCE PROCUREMNT
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $238.7 million to THE BOEING COMPANY for work described as: MH-47G LOT 9 ADVANCE PROCUREMNT Key points: 1. Boeing secured the entire $238.7M contract for MH-47G helicopter advance procurement. 2. The contract was awarded on a sole-source basis, limiting competition. 3. Risk is moderate due to the sole-source nature and cost-plus contract type. 4. The sector is Aircraft Manufacturing, a critical component of defense spending.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially increases costs for taxpayers.
Taxpayer Impact: The lack of competition for this significant procurement may result in higher costs for taxpayers compared to a fully competed contract.
Public Impact
Taxpayers may have paid a premium due to the absence of competitive bidding. The sole-source award raises questions about the justification for not seeking multiple offers. The long duration of the contract (over 3 years) suggests a significant, ongoing need for these aircraft components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Addresses critical defense procurement needs
- Awarded to a known, experienced contractor
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, which is a significant part of the Department of Defense's budget. Benchmarks for similar advance procurement contracts are highly variable and depend on specific aircraft and components.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award, as it was a sole-source award to a large prime contractor.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The sole-source nature warrants close scrutiny to ensure fair pricing and effective execution.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Cost-plus contract type carries inherent cost overrun risk.
- Lack of transparency regarding justification for sole-sourcing.
- Potential for reduced innovation due to lack of competition.
Tags
aircraft-manufacturing, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $238.7 million to THE BOEING COMPANY. MH-47G LOT 9 ADVANCE PROCUREMNT
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 $238.7 million.
What is the period of performance?
Start: 2012-03-08. End: 2015-10-31.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of viable alternatives. Without specific documentation, it's difficult to ascertain the precise reasons. However, sole-source awards inherently reduce competitive pressure, potentially leading to higher prices and reduced innovation compared to a competed procurement.
How does the cost-plus fixed fee structure impact the overall risk and potential for cost overruns in this contract?
Cost-plus fixed fee contracts shift some of the financial risk to the government. While the contractor is incentivized to control costs to maximize their fixed fee, there's a risk of cost overruns if initial estimates are inaccurate or unforeseen issues arise. This structure requires robust government oversight to ensure costs are reasonable and allocable.
What is the long-term strategic value of this advance procurement for the MH-47G helicopter fleet?
Advance procurement ensures the timely availability of long-lead-time components and subassemblies necessary for future production or sustainment of the MH-47G fleet. This strategic approach helps maintain operational readiness and avoids costly production delays. The value lies in securing the supply chain for critical helicopter parts, supporting ongoing military operations.
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: ROUTE 291 & STEWART AVE, RIDLEY PARK, PA, 19078
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $239,456,446
Exercised Options: $239,456,446
Current Obligation: $238,683,874
Subaward Activity
Number of Subawards: 140
Total Subaward Amount: $19,746,587
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ04G0023
IDV Type: IDC
Timeline
Start Date: 2012-03-08
Current End Date: 2015-10-31
Potential End Date: 2015-10-31 00:00:00
Last Modified: 2023-10-25
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