Boeing Aerospace Operations awarded $194M for engineering services, with a significant portion for airframes and spares

Contract Overview

Contract Amount: $69,623,120 ($69.6M)

Contractor: Boeing Aerospace Operations, I

Awarding Agency: Department of Defense

Start Date: 2001-01-02

End Date: 2010-09-30

Contract Duration: 3,558 days

Daily Burn Rate: $19.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200104!000057!5700!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460101C0004 !A!N!*!N!P00001 !20010102!20010930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !-000011584904!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1A!AIRFRAMES AND SPARES !3AMB!AABNCP-E4 !541330!*!*!3! ! !C!*!*!*!B!*!*!A! !D !U!Y!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!A!N! ! ! ! ! ! !0001!

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $69.6 million to BOEING AEROSPACE OPERATIONS, I for work described as: 200104!000057!5700!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460101C0004 !A!N!*!N!P00001 !20010102!20010930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAH… Key points: 1. Contract awarded to a single, large aerospace company, indicating potential for limited competition. 2. The contract's duration of nearly 10 years suggests a long-term need for these services. 3. A substantial portion of the contract value is allocated to airframes and spares, pointing to sustainment and maintenance activities. 4. The 'Time and Materials' pricing structure may pose a risk of cost overruns if not closely managed. 5. The contract falls under the 'Engineering Services' category, suggesting complex technical support. 6. The geographic location of the contractor in Oklahoma may have implications for local economic impact.

Value Assessment

Rating: fair

The contract value of $194,293,544 over approximately 9.7 years averages to about $20 million per year. Benchmarking this against similar large-scale engineering services contracts for defense systems is challenging without more specific service details. However, the 'Time and Materials' pricing model, while flexible, can sometimes lead to higher costs compared to fixed-price contracts if not managed diligently. The sheer scale and duration suggest a critical need, but the pricing structure warrants careful monitoring for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was absent, potentially leading to a higher price than if multiple bids were solicited. The justification for this sole-source award would be critical to understanding the value proposition for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers did not benefit from competitive pricing, potentially resulting in a higher overall cost for these essential engineering services.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically units requiring support for airframes and related spares. Services delivered include complex engineering support, likely encompassing design, modification, maintenance, and sustainment of aircraft systems. The geographic impact is concentrated around Midwest City, Oklahoma, where the contractor is located, potentially supporting local jobs and the regional economy. Workforce implications include the employment of skilled engineers, technicians, and support staff by Boeing Aerospace Operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition on a large-value contract increases the risk of paying above-market rates.
The 'Time and Materials' contract type can incentivize longer project durations and higher labor costs if not strictly managed.
The long contract duration (nearly 10 years) may not adapt well to evolving technological needs or changing defense priorities.
Limited transparency due to sole-source award makes it difficult to assess the true value for money.
The specific nature of 'engineering services' can be broad, potentially leading to scope creep if not clearly defined and monitored.

Positive Signals

Award to a major aerospace contractor like Boeing suggests access to specialized expertise and established supply chains.
The contract addresses critical needs related to airframes and spares, indicating support for essential defense capabilities.
The long duration implies a stable, predictable support structure for the supported systems.
The contract is managed by the Defense Contract Management Agency, suggesting a level of oversight.
The contractor's location in Oklahoma may foster regional economic development and job creation.

Sector Analysis

This contract falls within the Engineering Services sector, which is a critical component of the aerospace and defense industry. The aerospace and defense market is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Spending in this sector often supports complex systems, including aircraft sustainment, upgrades, and new development. Comparable spending benchmarks would typically involve analyzing other large, long-term engineering support contracts awarded by the DoD to major aerospace primes, often in the hundreds of millions or billions of dollars over their lifespan.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to Boeing Aerospace Operations, a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on a large prime contractor may limit direct opportunities for small businesses unless they are part of Boeing's established supply chain. Further analysis would be needed to determine if subcontracting goals were set or met.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'Time and Materials' nature of the contract necessitates rigorous oversight to control costs and prevent scope creep. Transparency regarding the specific services performed and costs incurred would be crucial for accountability. While no specific Inspector General (IG) jurisdiction is mentioned, the DoD IG would have oversight authority over defense spending.

Related Government Programs

Aircraft Sustainment Programs
Aerospace Engineering Services
Defense Logistics Support
Airframe Maintenance Contracts
Military Aircraft Spares Procurement

Risk Flags

Sole-source award
Time and Materials pricing
Long contract duration
Lack of specific platform details
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.6 million to BOEING AEROSPACE OPERATIONS, I. 200104!000057!5700!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460101C0004 !A!N!*!N!P00001 !20010102!20010930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !-000011584904!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1A!AIRFRAMES AND SPARES !3AMB!AABNCP-E4 !541330!*!*!3! ! !C!*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is BOEING AEROSPACE OPERATIONS, I.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $69.6 million.

What is the period of performance?

Start: 2001-01-02. End: 2010-09-30.

What is the specific breakdown of the $194 million contract value between 'engineering services' and 'airframes and spares'?

The provided data indicates a total award of $194,293,544. While the primary NAICS code is 541330 (Engineering Services), the description also explicitly mentions 'AIRFRAMES AND SPARES'. Without a detailed breakdown from the contract itself, it's impossible to provide an exact split. However, given the significant mention of airframes and spares, it's plausible that a substantial portion, potentially exceeding 50%, of the contract value is allocated to the procurement and support of these physical components, with the remainder covering the associated engineering, logistics, and program management services. This dual focus suggests a comprehensive support package rather than purely engineering consulting.

What specific aircraft platforms or systems does this contract support?

The provided data does not specify the exact aircraft platforms or defense systems supported by this contract. The description 'CLS AIRCRAFT' and the PSC code 'A1A' (AIRFRAMES AND SPARES) suggest a focus on aircraft components and related services. Boeing Aerospace Operations is a major defense contractor with a wide range of aircraft programs. To determine the specific platforms, one would need to consult the contract's statement of work (SOW) or related contract award documentation, which would detail the systems requiring engineering support and the types of airframes and spares to be provided. This information is crucial for understanding the strategic importance and operational context of the contract.

What is the justification for the sole-source award, and were there any attempts to explore competitive options?

The data explicitly states the contract was 'NOT COMPETED' and lists the contract type as 'DEFINITIVE CONTRACT', often used for sole-source awards. The justification for a sole-source award typically falls under specific exceptions to full and open competition, such as the existence of only one responsible source, or a national security emergency. For a contract of this magnitude ($194M), the government would need to document a compelling reason, often citing unique capabilities, proprietary data, or specific technical requirements that only Boeing could meet. Without access to the contract's justification and approval (J&A) document, it's impossible to detail the specific rationale or confirm if alternative approaches were considered and deemed unsuitable. The lack of competition inherently limits price discovery.

How does the 'Time and Materials' pricing structure compare to industry standards for similar engineering services contracts?

The 'Time and Materials' (T&M) pricing structure is common for services where the scope of work is not clearly defined at the outset or is expected to evolve, such as research and development or certain types of engineering support. For engineering services, T&M allows flexibility but carries inherent risks for the government, primarily cost overruns, as the contractor is reimbursed for labor hours and material costs incurred. Industry standards often favor fixed-price contracts for well-defined requirements to ensure cost certainty. However, for complex, long-term sustainment or system integration efforts like this appears to be, T&M might be deemed necessary. The key to mitigating risk with T&M lies in robust government oversight, clear task orders, labor hour ceilings, and effective negotiation of billing rates.

What are the potential risks associated with the nearly 10-year duration of this contract?

A contract duration of approximately 9.7 years (from Jan 2001 to Sep 2010) presents several risks. Firstly, technological obsolescence is a significant concern; systems and engineering practices can evolve rapidly, potentially making the services or components procured under this contract outdated before its completion. Secondly, long-term contracts can reduce the government's agility to adapt to changing strategic priorities or budget constraints. Thirdly, the 'Time and Materials' pricing structure, combined with a long duration, increases the potential for cumulative cost growth over time if not meticulously managed and re-negotiated. Finally, it may stifle innovation by locking in specific approaches or contractors for an extended period, potentially preventing the adoption of more efficient or advanced solutions that emerge during the contract's life.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: 2601 LIBERTY PKWY, MIDWEST CITY, OK, 73110

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline