DoD's $259M Boeing contract for aircraft systems engineering services awarded without competition

Contract Overview

Contract Amount: $258,902,559 ($258.9M)

Contractor: Boeing Aerospace Operations, I

Awarding Agency: Department of Defense

Start Date: 2001-12-19

End Date: 2010-09-30

Contract Duration: 3,207 days

Daily Burn Rate: $80.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200203!000056!5700!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460102C0003 !A!N! !N!P00001 !20011219!20060930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !+000012707468!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1A!AIRFRAMES AND SPARES !3AMB!AABNCP-E4 !541330!E! !3! ! !B! ! !99990909!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: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $258.9 million to BOEING AEROSPACE OPERATIONS, I for work described as: 200203!000056!5700!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460102C0003 !A!N! !N!P00001 !20011219!20060930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !+000012707468!N!N!000000000… Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant contract value suggests a critical role in aircraft sustainment or development. 3. Long duration (over 8 years) indicates a sustained need for these services. 4. The 'Engineering Services' NAICS code points to a focus on technical expertise. 5. Contractor's location in Oklahoma suggests a concentration of aerospace support in that region. 6. Awarded as a Time and Materials contract, which can pose cost control challenges.

Value Assessment

Rating: questionable

The contract's total value of $259 million over nearly nine years is substantial. Without a competitive bidding process, it is difficult to benchmark the value for money. Time and Materials contracts, by nature, can lead to higher costs if not closely managed, as they reimburse the contractor for labor hours and material costs. Comparing this to similar sole-source engineering services contracts would be necessary to assess if the pricing is reasonable, but the lack of competition inherently limits robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the unique capabilities or proprietary knowledge required for the service. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to lower prices. The government did not leverage market forces to secure the best possible price for these essential engineering services.

Public Impact

The primary beneficiary is the Department of Defense, specifically entities requiring aircraft systems engineering support. Services delivered likely include technical analysis, design, integration, and sustainment for aircraft systems. The geographic impact is centered around Midwest City, Oklahoma, where the contractor is located. This contract supports specialized engineering jobs within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Time and Materials contract type can lead to cost overruns if not meticulously managed.
Long contract duration increases the risk of scope creep and evolving requirements without re-competition.
Lack of transparency in the procurement process due to sole-source nature.

Positive Signals

Award to a single, presumably capable contractor suggests specialized expertise was secured.
Long-term contract provides stability for critical aircraft systems engineering support.
Contractor's presence in Oklahoma may foster regional aerospace industry development.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the aerospace and defense industry. The market for such specialized services is often characterized by high barriers to entry due to technical expertise, security clearances, and established relationships. The total value of this contract is significant, representing a substantial portion of spending within this niche. Comparable spending benchmarks would typically involve analyzing other large, sole-source engineering contracts within the DoD for similar aircraft platforms.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for subcontracting opportunities, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The specific oversight mechanisms for a sole-source, Time and Materials contract would involve rigorous monitoring of labor hours, material costs, and adherence to the statement of work. Transparency is limited due to the non-competitive nature, but contract modifications and performance reports would be subject to internal DoD review and potentially Inspector General audits.

Related Government Programs

Aircraft Sustainment Programs
Aerospace Engineering Services
Department of Defense Research and Development
Major Weapon System Acquisition Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competitive bidding
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $258.9 million to BOEING AEROSPACE OPERATIONS, I. 200203!000056!5700!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460102C0003 !A!N! !N!P00001 !20011219!20060930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !+000012707468!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1A!AIRFRAMES AND SPARES !3AMB!AABNCP-E4 !541330!E! !3! ! !B! ! !99990909!B! ! !A! !D!U!Y!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!A!N! ! ! ! ! ! !0001!

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 $258.9 million.

What is the period of performance?

Start: 2001-12-19. End: 2010-09-30.

What is the track record of Boeing Aerospace Operations, Inc. in delivering similar engineering services to the DoD?

Boeing Aerospace Operations, Inc. has a long and extensive history of providing a wide range of services to the Department of Defense, including complex engineering, logistics, and sustainment support for various aircraft platforms. Their track record typically involves large-scale, high-value contracts. While specific performance metrics for this particular contract are not detailed in the provided data, Boeing is a major defense contractor with significant experience in systems engineering. Historical data would likely show a pattern of successful, albeit often high-cost, contract performance across numerous programs. However, a deeper dive into past performance reviews, past performance questionnaires, and any documented disputes or contract terminations would be necessary for a comprehensive assessment.

How does the $259 million value compare to other sole-source engineering services contracts awarded by the DoD?

The $259 million value for this contract, spanning nearly nine years, is substantial and places it among significant sole-source awards for engineering services within the Department of Defense. While exact comparisons are difficult without access to a comprehensive database of all sole-source contracts and their specific service scopes, contracts of this magnitude often relate to critical sustainment, modernization, or specialized development efforts for major weapon systems. Sole-source awards are generally less common than competed contracts, and their value can vary widely based on the complexity and duration of the required services. This particular contract's value suggests a long-term, high-level need for specialized engineering expertise that the DoD deemed unavailable or impractical to obtain through competition.

What are the primary risks associated with a sole-source Time and Materials contract of this magnitude?

The primary risks associated with a sole-source Time and Materials (T&M) contract of this magnitude are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing as the government lacks market leverage. There's a risk that the contractor may not be incentivized to find the most cost-effective solutions. Secondly, the T&M structure itself carries inherent risks. It reimburses the contractor for actual labor hours and material costs incurred, plus a fee or profit. This can lead to cost overruns if the scope of work is not well-defined, if the contractor's efficiency is low, or if there is scope creep. Without robust oversight and detailed tracking of hours and materials, the government could end up paying significantly more than anticipated. The long duration further exacerbates these risks by increasing the window for potential cost escalation and requirement changes.

What does the 'Engineering Services' (NAICS 541330) classification imply about the nature of the work performed?

The classification of 'Engineering Services' under NAICS code 541330 indicates that the contract is for professional services that require a high degree of technical expertise and knowledge in the application of engineering principles. This typically includes services such as research and development, design, analysis, testing, and consulting related to various engineering disciplines. For aircraft systems, this could encompass areas like structural integrity, avionics, propulsion systems, software integration, and overall system performance optimization. The work is likely complex, requiring specialized skills and potentially involving proprietary knowledge or access to sensitive technical data, which often contributes to the justification for sole-source awards in specific cases.

How has federal spending on 'Engineering Services' (NAICS 541330) evolved over the past decade, and where does this contract fit?

Federal spending on 'Engineering Services' (NAICS 541330) has generally seen a steady demand, particularly within the defense and aerospace sectors, driven by modernization efforts, sustainment of existing platforms, and research into new technologies. While specific aggregate spending figures for this NAICS code across the entire federal government are not provided here, it's understood to be a significant category. This $259 million contract represents a substantial single award within this sector. Its long duration and sole-source nature suggest it addresses a critical, long-term need for specialized engineering support for a specific defense program, rather than being part of a broader, competitively procured suite of engineering services.

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