DoD's $41M Boeing Contract for VC-25A Logistics Support Lacks Competition
Contract Overview
Contract Amount: $41,116,726 ($41.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2015-09-01
End Date: 2019-11-30
Contract Duration: 1,551 days
Daily Burn Rate: $26.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: IGF::OT::IGF VC-25A CONTRACTOR LOGISTICS SUPPORT
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $41.1 million to THE BOEING COMPANY for work described as: IGF::OT::IGF VC-25A CONTRACTOR LOGISTICS SUPPORT Key points: 1. Significant contract value of $41.1 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced value. 3. The contract supports critical Air Force Two (VC-25A) operations, highlighting its importance. 4. Sector context is Defense, specifically aircraft logistics and support services.
Value Assessment
Rating: questionable
The contract's Cost No Fee (CNF) structure with a large value and no competition makes pricing assessment difficult. Without competitive benchmarks, it's hard to determine if the $41.1 million represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was sole-sourced, meaning no competitive bidding process was conducted. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a substantial contract may result in inefficient use of taxpayer funds due to potentially inflated costs.
Public Impact
Taxpayers may be paying more than necessary for essential aircraft support services. The sole-source nature limits opportunities for innovative solutions from other vendors. Reliability of VC-25A operations could be impacted if costs are not managed effectively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type (implied by CNF)
- Long duration (1551 days)
Positive Signals
- Supports critical national security asset (VC-25A)
- Awarded to a known, established contractor (Boeing)
Sector Analysis
This contract falls within the Defense sector, specifically focusing on logistics and support for specialized aircraft (VC-25A). Spending in this area is critical for maintaining operational readiness but requires careful oversight to ensure cost-effectiveness.
Small Business Impact
The contract was awarded to The Boeing Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure costs are reasonable and performance meets requirements. Transparency in pricing and justification for the lack of competition is crucial.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Sole-source award justification
- Potential for cost overruns
- Limited contractor accountability for performance beyond cost recovery
- Absence of small business participation
Tags
other-support-activities-for-air-transpo, department-of-defense, ok, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.1 million to THE BOEING COMPANY. IGF::OT::IGF VC-25A CONTRACTOR LOGISTICS SUPPORT
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 $41.1 million.
What is the period of performance?
Start: 2015-09-01. End: 2019-11-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data indicates a sole-source award, suggesting a specific justification was likely cited, such as unique capabilities or urgent need. However, without further documentation, it's impossible to confirm the exact reasoning or if alternatives were explored. A thorough review would be needed to assess the validity of the sole-source determination and ensure taxpayer value.
How does the 'Cost No Fee' structure impact the contractor's incentive to control costs on this $41 million contract?
A 'Cost No Fee' (CNF) contract means the contractor is reimbursed for allowable costs but receives no additional profit. This structure typically incentivizes cost control as the contractor's primary financial gain is limited to recovering their expenses. However, without a competitive baseline, the effectiveness of this incentive in achieving optimal value is uncertain.
What are the potential risks associated with relying on a single contractor for critical logistics support for the VC-25A aircraft?
Sole reliance on one contractor creates risks such as potential price escalation over time, reduced flexibility in adapting to changing needs, and vulnerability to contractor performance issues or financial instability. It also limits the government's ability to leverage competitive market forces for better service or innovation.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA810615R0005
Offers Received: 1
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $41,116,726
Exercised Options: $41,116,726
Current Obligation: $41,116,726
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-09-01
Current End Date: 2019-11-30
Potential End Date: 2019-11-30 00:00:00
Last Modified: 2021-02-25
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