Boeing awarded $50.6M for engineering support of multiple aircraft platforms, a sole-source contract
Contract Overview
Contract Amount: $50,565,293 ($50.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-02-01
End Date: 2019-10-31
Contract Duration: 1,002 days
Daily Burn Rate: $50.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: IGF::OT::IGF ENGINEERING SUPPORT SERVICES FOR MULTIPLE AIRCRAFT PLATFORMS
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $50.6 million to THE BOEING COMPANY for work described as: IGF::OT::IGF ENGINEERING SUPPORT SERVICES FOR MULTIPLE AIRCRAFT PLATFORMS Key points: 1. Contract awarded to a single, large aerospace manufacturer, raising questions about competitive pricing. 2. The fixed-price incentive contract type suggests performance targets were set, but details are limited. 3. Long contract duration of 1002 days indicates a significant, ongoing need for these services. 4. The contract was not competed, potentially limiting opportunities for other qualified vendors. 5. Engineering services are critical for maintaining complex defense systems, but value for money needs scrutiny. 6. The contract's value is substantial, requiring careful oversight to ensure efficient use of funds.
Value Assessment
Rating: fair
The contract value of $50.6 million for engineering support services is significant. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The fixed-price incentive structure implies some cost control, but the absence of competition raises concerns about whether the government secured the best possible value. Further analysis would be needed to compare the scope and deliverables to other engineering support contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not open to competition from multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, security clearances, or proprietary knowledge. The lack of competition means that price discovery through bidding was bypassed, potentially leading to higher costs for the government compared to a competed contract.
Taxpayer Impact: Sole-source awards can mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. This necessitates robust justification and oversight to ensure the price is fair and reasonable.
Public Impact
The primary beneficiaries are the Department of Defense, which receives essential engineering support for its aircraft. Services delivered include engineering support crucial for the maintenance, sustainment, and potential upgrades of multiple aircraft platforms. The geographic impact is likely concentrated around defense installations and contractor facilities involved in aircraft maintenance and operations. Workforce implications include the employment of engineers and technical specialists at The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Lack of transparency in the justification for sole-source procurement.
- Potential for cost overruns if not closely monitored due to fixed-price incentive structure.
Positive Signals
- Award to a major aerospace contractor with established expertise.
- Contract addresses critical engineering support needs for defense assets.
- Fixed-price incentive contract aims to align contractor performance with cost objectives.
Sector Analysis
This contract falls within the aerospace and defense engineering services sector. This sector is characterized by high barriers to entry, specialized technical expertise, and significant government spending. The market is dominated by a few large, established players like Boeing. Benchmarking spending in this area requires comparison to other large-scale engineering support contracts for complex defense systems, which often run into tens or hundreds of millions of dollars.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded to The Boeing Company, a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The absence of a set-aside suggests that opportunities for small businesses may be limited to potential subcontracts awarded by Boeing, the extent of which is not detailed here.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The fixed-price incentive contract type implies that performance metrics and cost targets are established, providing a basis for oversight. Transparency regarding the specific oversight mechanisms and accountability measures would require further investigation into the contract details and reporting requirements.
Related Government Programs
- Aircraft Maintenance and Repair Services
- Aerospace Engineering Services
- Defense Logistics Support
- Weapon Systems Support Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns (FPI risk)
Tags
defense, department-of-defense, engineering-services, aircraft-support, the-boeing-company, sole-source, fixed-price-incentive, major-contractor, oklahoma, defense-contract-management-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.6 million to THE BOEING COMPANY. IGF::OT::IGF ENGINEERING SUPPORT SERVICES FOR MULTIPLE AIRCRAFT PLATFORMS
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 $50.6 million.
What is the period of performance?
Start: 2017-02-01. End: 2019-10-31.
What is the historical spending pattern for engineering support services for these specific aircraft platforms?
Analyzing historical spending for engineering support on these platforms is crucial for context. Without specific data on prior contracts for these aircraft, we can infer that similar support has been procured over time. Large defense platforms often require continuous engineering services throughout their lifecycle. If this $50.6 million contract represents a typical annual or multi-year expenditure, it suggests a consistent and significant investment. However, a trend analysis comparing this award to previous periods would reveal if spending is increasing, decreasing, or remaining stable, which could indicate changes in platform sustainment needs, technological obsolescence, or efficiency improvements. Understanding the historical cost basis is vital for assessing the reasonableness of the current sole-source award.
How does the pricing of this contract compare to similar engineering support contracts awarded to other large aerospace companies?
Benchmarking the pricing of this $50.6 million contract against similar sole-source or competed engineering support contracts awarded to companies like Lockheed Martin, Northrop Grumman, or General Dynamics is essential for value assessment. Key comparison points would include the type of aircraft supported (e.g., fighter jets, transport planes, helicopters), the scope of engineering services (e.g., sustainment, upgrades, diagnostics), contract duration, and contract type (e.g., FPI, FFP). If comparable contracts show significantly lower per-unit costs or higher levels of competition, it would suggest that this Boeing contract may be priced unfavorably. Conversely, if similar complex, sole-source contracts for specialized engineering support are priced in a comparable range, it might indicate that the pricing is within an acceptable, albeit potentially non-optimal, band.
What specific risks are associated with a sole-source award for critical engineering support services?
A primary risk of a sole-source award for critical engineering support is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or optimize costs. Taxpayers may end up paying more than necessary. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, making it difficult and costly to switch vendors in the future, even if performance or pricing becomes unsatisfactory. Furthermore, without the vetting process of a competition, there's a heightened risk that the chosen contractor might not be the most capable or efficient provider available, potentially impacting the quality or timeliness of the engineering support delivered, which is critical for maintaining operational readiness of defense assets.
What is the track record of The Boeing Company in delivering engineering support services for defense contracts?
The Boeing Company has a long and extensive track record in delivering a wide array of engineering, manufacturing, and support services for numerous U.S. Department of Defense aircraft platforms. Historically, Boeing has been a prime contractor on major defense programs, often involving complex systems integration and lifecycle support. While generally considered a capable provider, like any large defense contractor, Boeing has faced scrutiny regarding contract performance, cost overruns, and schedule delays on specific programs. Assessing their track record for this particular type of engineering support would involve reviewing past performance evaluations, any documented issues with similar contracts, and their overall reputation within the defense sector for reliability and technical proficiency in aircraft sustainment and development.
How does the fixed-price incentive (FPI) contract type aim to manage costs and performance for this engineering support?
A Fixed-Price Incentive (FPI) contract is designed to share the risks and rewards between the government and the contractor. It establishes an initial target cost, a target profit, and a price ceiling. If the final cost is below the target cost, both parties share in the savings according to a pre-negotiated formula. If the final cost exceeds the target cost but remains below the ceiling, the contractor absorbs a larger portion of the overrun. If the cost exceeds the ceiling, the contractor is responsible for the entire amount over the ceiling. For this engineering support contract, the FPI structure incentivizes Boeing to control costs while meeting performance objectives. The effectiveness depends heavily on the realism of the initial cost targets and the clarity of the performance metrics.
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
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $68,086,851
Exercised Options: $56,616,969
Current Obligation: $50,565,293
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $3,183,237
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA810617D0002
IDV Type: IDC
Timeline
Start Date: 2017-02-01
Current End Date: 2019-10-31
Potential End Date: 2019-10-31 00:00:00
Last Modified: 2022-08-18
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