Boeing Awarded $43.9M for B-2 Stealth Systems Engineering Services, Lacking Competition
Contract Overview
Contract Amount: $43,972,843 ($44.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2003-01-10
End Date: 2018-08-31
Contract Duration: 5,712 days
Daily Burn Rate: $7.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: 200304!000041!5700!GV68 !ESC/ACK !F1962802C0093 !A!N! !N!P00001 !20030110!20040924!007237241!007237241!009256819!N!THE BOEING COMPANY !3801 S OLIVER ST !WICHITA !KS!67210!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000000778090!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION !3ABK!B-2 STEALTH !336411!E! !1! ! !C! ! !99990909!B! ! !N!B!D!U!R!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: WICHITA, SEDGWICK County, KANSAS, 67210
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $44.0 million to THE BOEING COMPANY for work described as: 200304!000041!5700!GV68 !ESC/ACK !F1962802C0093 !A!N! !N!P00001 !20030110!20040924!007237241!007237241!009256819!N!THE BOEING COMPANY !3801 S OLIVER ST !WICHITA !KS!67210!79000!173!20!WICHITA !SEDGW… Key points: 1. Significant contract value awarded to a single large defense contractor. 2. Lack of competition raises concerns about price discovery and potential overspending. 3. The contract is for critical B-2 stealth aircraft systems engineering. 4. Sector is dominated by large, established defense firms, limiting small business opportunities.
Value Assessment
Rating: questionable
The contract value of $43.9M for systems engineering services appears high given the 'time and materials' pricing structure and lack of competition. Benchmarking against similar sole-source or limited-competition contracts for specialized aerospace engineering would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The absence of competition likely results in a higher cost to the taxpayer than if multiple vendors had vied for the contract.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The sole-source nature of the award could set a precedent for future sole-source contracts in this specialized area. Ensuring robust oversight is crucial to manage costs and performance on this non-competed contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Time and Materials pricing
- Long contract duration (15+ years)
Positive Signals
- Awarded to a major defense contractor with proven capabilities
- Supports critical national defense asset (B-2 Stealth)
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications. Benchmarks are difficult without specific program data.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses in the provided data, which is common for large, sole-source defense contracts.
Oversight & Accountability
Given the sole-source nature and long duration, robust oversight from the Department of Defense and the Defense Contract Management Agency is critical to ensure cost control, performance, and adherence to contract terms.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns due to Time and Materials pricing
- Long contract duration (over 15 years)
- Limited transparency on pricing justification
- No clear small business participation
Tags
aircraft-manufacturing, department-of-defense, ks, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.0 million to THE BOEING COMPANY. 200304!000041!5700!GV68 !ESC/ACK !F1962802C0093 !A!N! !N!P00001 !20030110!20040924!007237241!007237241!009256819!N!THE BOEING COMPANY !3801 S OLIVER ST !WICHITA !KS!67210!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000000778090!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION !3ABK!B-2 STEALTH !336411!E! !1! ! !C! ! !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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $44.0 million.
What is the period of performance?
Start: 2003-01-10. End: 2018-08-31.
What is the justification for awarding this contract sole-source, and what steps are taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. To ensure fair pricing, the government usually conducts a 'should-cost' analysis, reviews historical pricing, and may engage in extensive negotiation with the sole provider. Independent cost estimates and market research, even if limited, are also employed.
How does the 'Time and Materials' pricing structure impact cost control on a long-term, sole-source contract for complex systems engineering?
Time and Materials (T&M) contracts can pose a risk for cost overruns, especially on long-term, sole-source agreements. Unlike fixed-price contracts, the government pays for the actual labor hours and material costs incurred. Without strong oversight and defined ceilings, this structure offers less incentive for the contractor to control costs efficiently, potentially leading to higher overall expenditure for the government.
What is the long-term value proposition for the government in awarding such a lengthy, non-competed contract for B-2 systems engineering?
The primary value proposition is ensuring continuity of essential support for a critical, aging platform like the B-2. Awarding a long-term contract to a single, experienced provider like Boeing can guarantee specialized knowledge and maintain the aircraft's operational readiness. However, this value must be constantly weighed against the potential for inflated costs due to the lack of competitive pressure.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2003-01-10
Current End Date: 2018-08-31
Potential End Date: 2018-08-31 00:00:00
Last Modified: 2021-11-01
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