DoD awards $52M to Boeing for B-1 Engineering Services, raising concerns about competition and value
Contract Overview
Contract Amount: $52,088,526 ($52.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-01-12
End Date: 2022-01-28
Contract Duration: 1,477 days
Daily Burn Rate: $35.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: B-1 ENGINEERING SERVICES
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $52.1 million to THE BOEING COMPANY for work described as: B-1 ENGINEERING SERVICES Key points: 1. Significant contract value awarded to a single large contractor. 2. Lack of competition raises questions about price discovery and potential overspending. 3. Cost-plus fixed-fee contract type can incentivize higher costs. 4. Focus on aircraft manufacturing suggests specialized, high-value services.
Value Assessment
Rating: questionable
The contract's cost-plus fixed-fee structure, combined with a lack of competition, makes it difficult to assess value. Without benchmarks or competitive bids, it's hard to determine if the $52M price is reasonable for the engineering services provided to the B-1 program.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down the price.
Taxpayer Impact: The lack of competition for this substantial contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers may be overpaying for essential engineering services due to the absence of competition. The long duration of the contract (over 3 years) means sustained potential for inefficient spending. Lack of transparency in pricing due to sole-source award impacts public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
- No small business participation
Positive Signals
- Essential services for a critical defense platform (B-1 bomber)
- Awarded to a major defense contractor with established expertise
Sector Analysis
This contract falls within the Defense sector, specifically related to aircraft manufacturing and associated engineering services. Spending benchmarks in this area are highly variable, but large sole-source awards for specialized engineering on major platforms often carry a premium.
Small Business Impact
The data indicates no small business participation in this contract. This is common for large, specialized sole-source awards to prime contractors, but it represents a missed opportunity for small businesses to contribute and for the government to potentially leverage diverse capabilities.
Oversight & Accountability
The sole-source nature of this award warrants close oversight from the Department of Defense to ensure that costs are reasonable and that the services provided are essential and effectively delivered. Robust auditing and performance monitoring are crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- No small business participation
- Potential for cost overruns
- Limited transparency on specific services
Tags
aircraft-manufacturing, department-of-defense, ok, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $52.1 million to THE BOEING COMPANY. B-1 ENGINEERING SERVICES
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 $52.1 million.
What is the period of performance?
Start: 2018-01-12. End: 2022-01-28.
What specific engineering services were provided under this contract, and how do they directly support the B-1 bomber's operational readiness?
The contract details are limited, but 'B-1 ENGINEERING SERVICES' suggests support for the B-1 Lancer bomber's sustainment, upgrades, or modifications. This could include structural analysis, avionics integration, software development, or maintenance engineering. The specific services are critical for ensuring the aircraft remains combat-capable and meets evolving mission requirements.
Given the sole-source award and cost-plus structure, what mechanisms are in place to prevent cost overruns and ensure fair pricing?
With a sole-source, cost-plus fixed-fee contract, oversight is paramount. The Department of Defense should employ rigorous auditing of Boeing's costs, establish realistic fixed-fee targets based on performance, and conduct regular reviews to ensure the services are necessary and efficiently executed. Independent cost estimates and benchmarking, where possible, are also vital.
Could these engineering services have been competitively procured, and what would be the estimated cost savings if they were?
Without a detailed justification for the sole-source award, it's difficult to definitively say if competition was possible. However, for significant engineering services on a major platform, competition often yields savings. Historically, competitive bidding can reduce costs by 10-30% or more compared to sole-source awards, depending on the market and service complexity.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $58,897,294
Exercised Options: $58,897,294
Current Obligation: $52,088,526
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA810714D0002
IDV Type: IDC
Timeline
Start Date: 2018-01-12
Current End Date: 2022-01-28
Potential End Date: 2022-01-28 00:00:00
Last Modified: 2024-07-24
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