Boeing awarded $20M+ for aircraft parts, with 4 bidders in a full and open competition

Contract Overview

Contract Amount: $20,037,361 ($20.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2010-06-22

End Date: 2014-05-22

Contract Duration: 1,430 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST NO FEE

Sector: Defense

Official Description: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $20.0 million to THE BOEING COMPANY for work described as: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING Key points: 1. The contract value represents a significant investment in aircraft parts manufacturing. 2. Full and open competition suggests a healthy market for these specialized components. 3. The contract duration of over 1400 days indicates a long-term need for these parts. 4. The 'Cost No Fee' contract type shifts cost risk to the government. 5. The geographic location of the awardee in Oklahoma may have local economic implications.

Value Assessment

Rating: fair

The contract value of over $20 million for aircraft parts is substantial. Without specific unit cost data or benchmarks for comparable parts, a precise value-for-money assessment is challenging. The 'Cost No Fee' (Cost Plus Fixed Fee) contract type, while common for R&D or uncertain scope, places the financial risk on the government, potentially leading to higher overall costs if not managed effectively. Benchmarking against similar contracts for aircraft parts would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With four bidders participating, the competition level appears moderate. This suggests that while there is some market interest, it may not represent the full spectrum of potential suppliers, which could influence price discovery and potentially lead to less aggressive pricing compared to a higher number of bidders.

Taxpayer Impact: A moderate level of competition means taxpayers benefit from some price pressure, but there's potential for further savings if more firms had participated or if the bidding process encouraged more aggressive cost proposals.

Public Impact

The Department of Defense benefits from the supply of essential aircraft parts. The contract supports the maintenance and operational readiness of military aircraft. The award to The Boeing Company in Oklahoma has implications for the regional aerospace workforce and supply chain. The delivery of these parts is critical for ongoing defense operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' contract type exposes the government to potential cost overruns.
Limited public information on specific part types makes detailed performance benchmarking difficult.
The duration of the contract could lead to obsolescence issues if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
The Boeing Company is a major, established aerospace manufacturer with a strong track record.
The contract duration suggests a stable, long-term requirement, providing predictability.

Sector Analysis

The aerospace parts manufacturing sector is a critical component of the defense industrial base. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry code (NAICS 336413). The market is characterized by high barriers to entry due to specialized technology, stringent quality control, and regulatory requirements. Spending in this sector is heavily influenced by defense procurement cycles and the operational tempo of military aviation assets. Comparable spending benchmarks would typically be found within the broader DoD aircraft procurement and sustainment budgets.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to The Boeing Company, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is not detailed in this award notice. Further investigation into subcontracting goals would be needed to assess the impact.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. The 'st' field shows 'OK', suggesting the contract status is satisfactory. Accountability measures would typically involve performance reviews, milestone tracking, and financial audits, especially given the 'Cost No Fee' structure. Transparency is facilitated through contract award databases, but detailed operational oversight specifics are generally not public.

Related Government Programs

Aircraft Component Manufacturing
Defense Logistics Agency Procurement
Aerospace Industry Contracts
Military Aircraft Sustainment

Risk Flags

Cost-plus contract type may lead to higher government expenditure.
Moderate competition level could limit optimal price discovery.
Lack of specific unit cost data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.0 million to THE BOEING COMPANY. OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

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 $20.0 million.

What is the period of performance?

Start: 2010-06-22. End: 2014-05-22.

What is the historical spending trend for aircraft parts by the Department of Defense?

The Department of Defense consistently allocates significant funding towards aircraft parts and related services to maintain its vast fleet. Historical data shows a steady demand driven by operational tempo, modernization programs, and the aging of existing aircraft. While specific figures fluctuate annually based on budget allocations and strategic priorities, spending in this category typically runs into billions of dollars each fiscal year. Factors influencing these trends include geopolitical events, new platform introductions, and the sustainment needs of legacy systems. Analyzing trends requires looking at aggregated spending across various contract vehicles and agencies involved in aviation procurement and maintenance.

How does the 'Cost No Fee' (Cost Plus Fixed Fee) contract type compare to other contract types in terms of risk and cost for the government?

The 'Cost No Fee' (Cost Plus Fixed Fee - CPFF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred, plus a fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, such as research and development. For the government, the primary risk is cost overrun, as the contractor has less incentive to control costs beyond what is necessary to complete the work and earn the fixed fee. In contrast, fixed-price contracts shift cost risk to the contractor, incentivizing efficiency. CPFF contracts can be beneficial for acquiring complex or innovative solutions where upfront cost estimation is difficult, but they require robust government oversight to manage costs effectively.

What is The Boeing Company's track record with Department of Defense contracts, particularly in aircraft parts?

The Boeing Company has an extensive and long-standing track record as a major defense contractor for the Department of Defense. It is one of the largest suppliers of military aircraft, systems, and components. Within the aircraft parts and auxiliary equipment sector, Boeing has consistently secured numerous contracts for both new production and sustainment of various platforms, including fighters, bombers, and transport aircraft. Its history includes both large-scale development programs and ongoing supply chain agreements for spare parts and upgrades. While generally strong, like any large contractor, Boeing has faced scrutiny and challenges on specific programs related to cost, schedule, and performance, but its overall contribution to DoD aviation readiness is substantial.

What are the potential implications of awarding aircraft parts contracts in Oklahoma?

Awarding significant defense contracts, such as this one for aircraft parts, to a company with operations in Oklahoma can have several positive implications for the state's economy. It can lead to job creation or retention within the aerospace sector, supporting skilled labor in manufacturing, engineering, and logistics. Furthermore, it can stimulate local supply chains, benefiting smaller businesses that provide materials, components, or services to the prime contractor. Such contracts also contribute to the state's tax base and can foster the development of specialized technical expertise, potentially attracting further investment in the aerospace and defense industries within Oklahoma.

How does the number of bidders (4) in this 'full and open competition' impact price discovery and taxpayer value?

Having four bidders in a 'full and open competition' provides a moderate level of price discovery. This number suggests that the market is sufficiently competitive to attract multiple interested parties, which generally leads to more competitive pricing than a sole-source or limited competition scenario. However, the optimal number of bidders for maximum price competition can vary depending on the complexity and size of the contract. With four bidders, taxpayers benefit from some downward pressure on prices due to rivalry. If the market could support significantly more bidders, or if the specific nature of the parts allowed for broader participation, there might be an opportunity for even greater cost savings. Robust evaluation criteria beyond just price are also crucial to ensure overall value.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › TRANSPORTATION (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA810609R0007

Offers Received: 4

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,037,361

Exercised Options: $20,037,361

Current Obligation: $20,037,361

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline