DoD's $48.8M R&D contract with Boeing for aerospace operations awarded without competition

Contract Overview

Contract Amount: $48,827,036 ($48.8M)

Contractor: Boeing Aerospace Operations, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-01-24

End Date: 2009-09-30

Contract Duration: 2,441 days

Daily Burn Rate: $20.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: RICHARDSON, COLLIN County, TEXAS, 75082

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $48.8 million to BOEING AEROSPACE OPERATIONS, INC. for work described as: Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Long duration of 2441 days suggests a complex, long-term research and development effort. 3. Sole-source award raises questions about market competition and potential for better pricing. 4. Contractor's extensive experience in aerospace operations likely influenced the sole-source decision. 5. Geographic location in Texas may indicate specific operational or testing requirements. 6. Lack of small business set-aside suggests the primary contractor is a large entity.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with its long duration, warrants scrutiny for value. Without competitive bidding, it's difficult to benchmark pricing against market rates or similar contracts. The absence of a fixed price or clear performance metrics tied to cost makes assessing value for money challenging. Further analysis would require detailed cost breakdowns and performance reports to determine if the $48.8 million expenditure yielded optimal results.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Boeing Aerospace Operations, Inc., was considered. This approach is typically used when a unique capability or specialized expertise is required that only one contractor can provide. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Sole-source awards limit taxpayer value by bypassing competitive pressures that drive down prices. This means taxpayers may have paid a premium for the services rendered.

Public Impact

The primary beneficiary is the Department of Defense, which receives advanced aerospace operations research and development. Services delivered likely include advanced research, testing, and development in physical, engineering, and life sciences related to aerospace. The contract's impact is concentrated in Texas, where the contractor is located. Workforce implications include specialized R&D roles within Boeing and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure can incentivize cost escalation.
Sole-source award limits price competition and potentially increases costs.
Long contract duration (2441 days) increases exposure to changing requirements and economic conditions.
Lack of specific performance metrics in the provided data makes it hard to assess efficiency.
No indication of small business participation, potentially missing opportunities for broader economic impact.

Positive Signals

Award to a well-established contractor (Boeing) suggests access to significant expertise and resources.
Focus on R&D indicates investment in future technological capabilities for national security.
Contract awarded by the Defense Contract Management Agency, implying oversight.
Specific NAICS code (541710) points to specialized scientific research and development.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The aerospace operations domain is a critical area for defense spending, involving advanced technologies and complex systems. Comparable spending benchmarks in this sector are highly variable, depending on the specific research area and technological maturity. However, large sole-source R&D contracts are not uncommon in defense when unique capabilities are required.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, Boeing Aerospace Operations, Inc., there is no explicit requirement for subcontracting to small businesses outlined in the provided data. This means opportunities for small businesses to participate in this specific contract may be limited unless proactively sought by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee (CPFF) contract, requiring Boeing to report on costs and progress. Transparency is limited due to the sole-source nature and the proprietary R&D focus, but contract awards and basic details are usually publicly accessible.

Related Government Programs

Department of Defense Research and Development Programs
Aerospace Technology Development Contracts
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.8 million to BOEING AEROSPACE OPERATIONS, INC.. See the official description on USAspending.

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 $48.8 million.

What is the period of performance?

Start: 2003-01-24. End: 2009-09-30.

What specific research and development activities were undertaken under this contract?

The provided data indicates the contract (NA: 541710) was for 'Research and Development in the Physical, Engineering, and Life Sciences' related to aerospace operations. While the specific R&D activities are not detailed, this typically encompasses areas such as advanced materials, propulsion systems, flight dynamics, avionics, simulation technologies, and potentially human factors in aerospace environments. Given the contractor (Boeing) and the defense agency, the focus was likely on enhancing military aviation capabilities, space systems, or related technologies. The long duration suggests a foundational or exploratory research effort rather than a specific product development phase.

How does the $48.8 million cost compare to similar R&D contracts in the aerospace sector?

Benchmarking this $48.8 million contract is challenging without more specific details on the R&D scope and duration. However, for large-scale, long-term aerospace R&D, this figure is within a plausible range, especially for a sole-source award to a major contractor like Boeing. Contracts for advanced aerospace R&D can range from tens of millions to billions of dollars, depending on the complexity, technological risk, and strategic importance. The sole-source nature and cost-plus-fixed-fee structure, however, mean that direct cost comparisons to competitively bid fixed-price contracts would be misleading regarding value for money.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract of this magnitude and duration?

The primary risks include potential cost overruns, as the cost-plus-fixed-fee structure incentivizes spending rather than cost control. The sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced innovation. The long duration (2441 days) increases the risk of scope creep, requirement changes, and the contractor's performance becoming misaligned with evolving government needs. Furthermore, without robust oversight and clear performance metrics, ensuring accountability and achieving desired R&D outcomes can be difficult.

What was the justification for awarding this contract on a sole-source basis?

While the specific justification is not provided in the data, sole-source awards are typically granted when only one responsible source can satisfy the agency's needs. For a contractor like Boeing in aerospace operations, this could be due to unique proprietary technology, specialized expertise, extensive prior experience with related systems, or the need for urgent R&D that only they can perform within the required timeframe. The government would have had to document these reasons extensively to comply with federal procurement regulations.

What is Boeing's track record with similar government R&D contracts?

Boeing is a major defense contractor with a long and extensive history of performing large-scale research and development contracts for the U.S. government, particularly the Department of Defense. They have a proven track record in various aerospace domains, including military aircraft, spacecraft, and related technologies. While specific performance metrics for individual contracts vary, Boeing generally possesses the technical capabilities and infrastructure to handle complex R&D efforts. However, like many large contractors, they have also faced scrutiny over cost and performance on certain programs.

How does the contract's end date (September 30, 2009) reflect on its historical significance or potential obsolescence?

The contract's end date of September 30, 2009, places it firmly in the past. This means the R&D conducted under this award is over a decade old. While foundational research can remain relevant, the rapid pace of technological advancement, particularly in aerospace and defense, means that findings from this period may be outdated or superseded by newer developments. Its historical significance lies in understanding past R&D investments and technological trajectories, but its direct applicability to current defense needs would require assessment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 3373 BRECKINRIDGE BLVD, RICHARDSON, TX, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $87,889,598

Exercised Options: $48,827,037

Current Obligation: $48,827,036

Contract Characteristics

Cost or Pricing Data: YES

Timeline