DoD's $210M Boeing contract for aircraft parts saw limited competition, raising value concerns

Contract Overview

Contract Amount: $210,037,393 ($210.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2003-02-28

End Date: 2009-12-31

Contract Duration: 2,498 days

Daily Burn Rate: $84.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67210

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $210.0 million to THE BOEING COMPANY for work described as: Key points: 1. The contract's value, exceeding $210 million, warrants scrutiny regarding its efficiency and cost-effectiveness. 2. Limited competition suggests potential for inflated pricing and reduced incentive for contractor innovation. 3. The Cost Plus Fixed Fee (CPFF) structure may not fully align contractor incentives with cost control. 4. Performance context is limited due to the age of the contract and lack of readily available performance metrics. 5. This contract falls within the broader Defense sector, specifically supporting aircraft parts manufacturing. 6. The long duration of the contract (2498 days) necessitates ongoing oversight to ensure continued value.

Value Assessment

Rating: questionable

Benchmarking this $210 million contract is challenging due to its age and the specific nature of aircraft parts. However, the Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex defense procurements, can lead to higher costs if not managed rigorously. Without detailed performance data and comparison to similar sole-source or limited-competition contracts for comparable parts, it's difficult to definitively assess value for money. The lack of robust competition inherently limits the government's ability to secure the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed on a full and open basis, indicating that the Department of Defense did not solicit offers from all responsible sources. This limited competition approach, often used when specific capabilities or urgent needs exist, can restrict the pool of potential bidders. The specific reasons for limiting competition are not detailed in the provided data, but it implies that only a select few contractors were considered or approached.

Taxpayer Impact: Limited competition typically means taxpayers may not benefit from the cost savings that can arise from a more competitive bidding process. This can translate to higher overall spending for the government.

Public Impact

The primary beneficiaries are the Department of Defense, which receives essential aircraft parts, and The Boeing Company, the contractor. The services delivered include the manufacturing and supply of "Other Aircraft Parts and Auxiliary Equipment." The geographic impact is centered in Kansas (ST: KS, SN: KANSAS), where the contractor is located. Workforce implications include employment opportunities within The Boeing Company and its supply chain in the specified region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpricing due to limited competition.
CPFF contract type may incentivize cost overruns if not closely monitored.
Lack of detailed performance metrics makes post-award assessment difficult.
Contract duration of nearly 7 years (2498 days) requires sustained oversight.

Positive Signals

The Boeing Company is a major defense contractor with established capabilities.
The contract addresses a specific need for aircraft parts within the DoD.
The contract was awarded to a single, known entity, potentially streamlining acquisition.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers, which can lead to concentrated competition. Spending in this area is critical for maintaining military readiness and operational capabilities. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar aircraft components across different branches of the military.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (SS: false, SB: false). As a large sole-source or limited-competition award to a major prime contractor, there are implications for small business subcontracting. While not explicitly detailed, large prime contractors are often required to outline their small business subcontracting plans. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were likely minimal.

Oversight & Accountability

Oversight for this contract would have been managed by the Defense Contract Management Agency (DCMA). Accountability measures would typically involve monitoring contractor performance, costs, and adherence to contract terms. Transparency is often limited in sole-source or limited-competition procurements, especially for older contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Department of Defense Aircraft Procurement
Defense Logistics Agency (DLA) Supply Chain Management
Aerospace Manufacturing Contracts
Cost Plus Fixed Fee Contracts
Aircraft Component Maintenance and Repair

Risk Flags

Limited Competition
Cost Plus Fixed Fee Structure
Lack of Performance Data
Contract Age

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $210.0 million to THE BOEING COMPANY. See the official description on USAspending.

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 $210.0 million.

What is the period of performance?

Start: 2003-02-28. End: 2009-12-31.

What was the specific justification for awarding this contract on a limited or non-competitive basis?

The provided data indicates the contract was 'NOT COMPETED'. Specific justifications for non-competitive awards typically fall under exceptions to full and open competition, such as the "sole source" justification (FAR 6.302-1) when only one responsible source can satisfy agency requirements, or "urgent and compelling" needs (FAR 6.302-7). Without further documentation, the precise reason remains unspecified. However, such justifications are often related to unique technical capabilities, proprietary data, or critical, time-sensitive requirements where engaging in a full competitive process would be impractical or detrimental to the government's interests.

How did the final costs compare to the initial estimates for this Cost Plus Fixed Fee (CPFF) contract?

The provided data does not include information on initial cost estimates or how the final costs compared to those estimates. For Cost Plus Fixed Fee (CPFF) contracts, the government pays the contractor's actual costs plus a fixed fee, which represents the contractor's profit. While the fee is fixed, the total cost can vary. Effective oversight by the Defense Contract Management Agency (DCMA) is crucial to ensure that costs incurred are reasonable and allowable. Without access to the contract's financial execution reports or audit findings, a comparison of estimated versus actual costs cannot be made from the given data.

What performance metrics were used to evaluate The Boeing Company's delivery of aircraft parts under this contract?

The provided data does not specify the performance metrics used to evaluate The Boeing Company's delivery of aircraft parts. For contracts of this nature, typical performance metrics might include on-time delivery rates, quality acceptance rates (e.g., rejection rates for defects), adherence to technical specifications, and responsiveness to government requests. The Defense Contract Management Agency (DCMA) is responsible for monitoring contractor performance. The absence of specific metrics in the summary data suggests that detailed performance evaluations may reside in separate contract files or reporting systems.

Are there any documented issues or disputes related to this contract during its performance period?

The provided data does not contain information regarding documented issues or disputes related to this contract. Contract performance issues can range from delivery delays and quality problems to disagreements over contract terms or costs. Such issues are typically documented in contract correspondence, performance reports, or potentially in formal dispute resolution processes if they escalate. Without access to the contract's administrative file or any associated legal or contractual claims, it is not possible to identify any specific problems that may have arisen during its execution.

How does the $210 million total award value compare to typical spending on similar aircraft parts by the DoD?

Comparing the $210 million total award value to typical DoD spending on similar aircraft parts is challenging without more specific details about the 'Other Aircraft Parts and Auxiliary Equipment' covered. The DoD procures a vast array of components, ranging from simple fasteners to complex avionic systems. This contract's value could be considered moderate to significant depending on the criticality and volume of the parts supplied. To establish a benchmark, one would need to analyze historical spending data for comparable parts, considering factors like quantity, complexity, and whether the parts were for specific aircraft platforms (e.g., fighters, bombers, transport aircraft).

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

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

Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline