DoD Awards Boeing $1.72B for CH-47 Chinook Airframes and Spares
Contract Overview
Contract Amount: $391,824,595 ($391.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2002-12-20
End Date: 2011-09-12
Contract Duration: 3,188 days
Daily Burn Rate: $122.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: 200304!001653!2100!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2303C0022 !A!N! !N! !20021220!20051231!172316432!172316432!009256819!N!THE BOEING COMPANY !ROUTE 291 & STEWART AVE !RIDLEY PARK !PA!19078!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !+000016961013!N!N!000000000000!AC11!RDTE/AIRCRAFT-BASIC RESEARCH !A1A!AIRFRAMES AND SPARES !1AHK!CH-47 CHINOOK !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!L!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! ! ! ! !0001! !
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $391.8 million to THE BOEING COMPANY for work described as: 200304!001653!2100!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2303C0022 !A!N! !N! !20021220!20051231!172316432!172316432!009256819!N!THE BOEING COMPANY !ROUTE 291 & STEWART AVE !RIDLEY PARK !PA!19078!60000!101!42!PHILADELPHIA !PHILA… Key points: 1. Significant contract awarded to a single, established aerospace manufacturer. 2. Long-term contract spanning nearly a decade suggests critical, ongoing need. 3. High value indicates substantial investment in aviation sustainment. 4. Focus on airframes and spares points to fleet maintenance and readiness.
Value Assessment
Rating: good
The contract value of $1.72 billion over 9 years is substantial. Benchmarking against similar long-term, sole-source aviation sustainment contracts is difficult without more specific cost breakdowns, but the price appears within a reasonable range for such a critical and specialized component.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating that The Boeing Company is the only known source capable of fulfilling the requirement. This limits price discovery and competition, potentially leading to higher costs than if multiple vendors were involved.
Taxpayer Impact: Taxpayer funds are directed to a single contractor for a critical defense need, with limited opportunity for competitive bidding to drive down costs.
Public Impact
Ensures continued availability of critical CH-47 Chinook helicopter components. Supports ongoing military operations and readiness for the U.S. Army. Maintains a key segment of the aerospace manufacturing industrial base. Potential for job creation and economic activity in Pennsylvania.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing.
- Long contract duration may obscure cost efficiencies.
- Lack of competition could lead to price creep over time.
Positive Signals
- Ensures critical aircraft availability.
- Supports established defense industrial base.
- Long-term planning for fleet sustainment.
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. The value of $1.72 billion over 9 years is significant, reflecting the high cost of specialized aerospace components and sustainment for major military platforms like the CH-47 Chinook.
Small Business Impact
This contract was awarded directly to The Boeing Company, a large prime contractor. There is no explicit indication of subcontracting opportunities for small businesses within the provided data, suggesting that the primary award does not directly benefit SMBs.
Oversight & Accountability
The contract's sole-source nature warrants close oversight to ensure fair pricing and performance. Regular reviews of cost justifications and performance metrics are essential for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Potential for cost overruns due to long duration.
- Lack of transparency on specific performance metrics.
- Dependency on a single supplier for critical components.
Tags
aircraft-manufacturing, department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $391.8 million to THE BOEING COMPANY. 200304!001653!2100!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2303C0022 !A!N! !N! !20021220!20051231!172316432!172316432!009256819!N!THE BOEING COMPANY !ROUTE 291 & STEWART AVE !RIDLEY PARK !PA!19078!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !+000016961013!N!N!000000000000!AC11!RDTE/AIRCRAFT-BASIC RESEARCH !A1A!AIRFRAMES AND SPARES !1AHK!CH-47 CHINOOK !336411!E! !3! ! ! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $391.8 million.
What is the period of performance?
Start: 2002-12-20. End: 2011-09-12.
What is the justification for the sole-source award, and were alternative sources ever considered?
The sole-source justification likely stems from Boeing's unique position as the original manufacturer and sole holder of proprietary knowledge for the CH-47 Chinook airframes and spares. While alternative sources might not exist for direct manufacturing, a thorough review should confirm if any competitive opportunities for specific spare parts or related services were overlooked.
How are price increases managed over the contract's long duration to protect against inflation and potential price gouging?
The contract type is Fixed Price Incentive (FPI), which includes mechanisms for price adjustments based on performance and cost targets. However, the specific clauses governing price escalation, profit adjustments, and cost ceilings over the 9-year period need careful examination to ensure taxpayer protection against excessive cost increases.
What performance metrics are in place to ensure the quality and timely delivery of airframes and spares?
While the data indicates a definitive contract with a long duration, specific performance metrics (e.g., delivery schedules, defect rates, technical compliance) are not detailed. Robust oversight and regular performance evaluations are crucial to ensure Boeing meets its obligations and delivers high-quality components essential for aircraft readiness.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Address: ROUTE 291 & STEWART AVE, RIDLEY PARK, PA, 19078
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2002-12-20
Current End Date: 2011-09-12
Potential End Date: 2011-09-12 12:09:00
Last Modified: 2023-05-23
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