Boeing awarded $25.1M for aircraft manufacturing services, with limited competition and a high benchmarked unit cost
Contract Overview
Contract Amount: $25,149,084 ($25.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-06-01
End Date: 2020-03-31
Contract Duration: 669 days
Daily Burn Rate: $37.6K/day
Competition Type: NOT COMPETED
Pricing Type: TIME AND MATERIALS
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 $25.1 million to THE BOEING COMPANY for work described as: B-1 ENGINEERING SERVICES Key points: 1. The contract's value of over $25 million for aircraft manufacturing services represents a significant investment. 2. Limited competition for this contract may have influenced pricing and potentially reduced value for money. 3. The contract duration of 669 days suggests a substantial period of service delivery. 4. The 'Aircraft Manufacturing' NAICS code indicates a focus on specialized industrial production. 5. The contract was awarded as a delivery order, implying it's part of a larger framework agreement. 6. The contractor, The Boeing Company, is a major player in the aerospace industry.
Value Assessment
Rating: questionable
The contract's total value of $25.1 million is substantial. However, without specific details on the services rendered or comparable contracts for similar aircraft manufacturing tasks, a precise value-for-money assessment is difficult. The reported benchmarked cost of $37,592 per unit appears high when compared to typical manufacturing costs for standard aircraft components, suggesting potential inefficiencies or the specialized nature of the work. Further analysis of the specific deliverables and market rates for comparable specialized manufacturing is needed.
Cost Per Unit: $37,592 per unit (benchmarked)
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically reserved for situations where only one responsible source can provide the required goods or services. While this can ensure specialized capabilities are met, it significantly limits price discovery and may lead to higher costs for the government compared to a fully competed procurement.
Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price due to the absence of competitive pressure. This can result in a higher overall expenditure for the government.
Public Impact
The primary beneficiaries are likely the Department of Defense, which receives critical aircraft manufacturing services. The services delivered are essential for maintaining and potentially enhancing the nation's aircraft fleet. The geographic impact is centered around the contractor's facilities in Oklahoma, supporting local employment and economic activity. The contract supports a highly skilled workforce within the aerospace manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition, potentially increasing costs for taxpayers.
- High per-unit cost benchmark raises concerns about value for money.
- Lack of transparency in the justification for sole-source award.
- Contract duration of nearly two years requires sustained oversight.
- Potential for cost overruns given the time-and-materials pricing structure.
Positive Signals
- Contract awarded to a reputable and experienced aerospace manufacturer (The Boeing Company).
- Services are critical for national defense and aircraft readiness.
- Contract is managed by the Defense Contract Management Agency, indicating established oversight.
- Delivery order structure suggests it aligns with broader strategic defense needs.
Sector Analysis
The aerospace manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant technological innovation. This contract falls within the Aircraft Manufacturing (NAICS 336411) industry, which is a critical component of the defense industrial base. Spending in this sector is often driven by government procurement needs for military aircraft and related components. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the aircraft manufacturing, but large contracts with major defense contractors like Boeing are common.
Small Business Impact
This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses in its supply chain for this specific contract. Further investigation into Boeing's subcontracting plans would be necessary to assess the full impact.
Oversight & Accountability
Oversight for this contract is provided by the Defense Contract Management Agency (DCMA). As a delivery order under a larger contract, the specific oversight mechanisms would depend on the terms of the base agreement. The 'OK' status for 'st' (status) and 'sn' (state) suggests no immediate red flags in the system. However, the sole-source nature and time-and-materials pricing warrant close monitoring of expenditures and performance to ensure accountability and prevent cost overruns.
Related Government Programs
- Aircraft Manufacturing Services
- Defense Procurement
- Aerospace Industry Contracts
- Sole-Source Procurements
- Department of Defense Contracts
Risk Flags
- Sole-source award
- High per-unit cost benchmark
- Time and Materials pricing
Tags
defense, department-of-defense, the-boeing-company, aircraft-manufacturing, sole-source, delivery-order, time-and-materials, oklahoma, large-contract, defense-contract-management-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.1 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 $25.1 million.
What is the period of performance?
Start: 2018-06-01. End: 2020-03-31.
What specific aircraft manufacturing services were provided under this contract?
The provided data indicates the contract is for 'Aircraft Manufacturing Services' under NAICS code 336411. However, the specific nature of these services is not detailed. It could range from the production of new aircraft components, assembly, modification, or repair of existing aircraft. Given the contractor is The Boeing Company, it is likely related to complex aircraft systems or platforms. Without more granular information, it's difficult to pinpoint the exact services. Further details would typically be found in the contract statement of work (SOW) or associated documentation, which are not included in the provided data.
How does the per-unit cost benchmark of $37,592 compare to similar aircraft manufacturing contracts?
The per-unit cost benchmark of $37,592 is considered high for general aircraft manufacturing. However, its appropriateness is highly dependent on the specific type of unit being manufactured. If this refers to a complex sub-assembly, a specialized component, or a prototype part for a cutting-edge aircraft, this cost might be justifiable. For standard, mass-produced components, it would likely be uncompetitive. Benchmarking requires comparing this figure against contracts for identical or highly similar items, considering factors like volume, complexity, materials, and labor involved. Without such specific comparisons, it's difficult to definitively label it as 'high' or 'low' in absolute terms, but it warrants scrutiny.
What are the risks associated with a sole-source award for aircraft manufacturing?
The primary risk of a sole-source award in aircraft manufacturing is the lack of competitive pressure, which can lead to inflated prices and reduced value for taxpayer money. It also limits the government's ability to explore innovative solutions or alternative suppliers that might offer better performance or cost-effectiveness. Furthermore, sole-source awards can create dependency on a single contractor, potentially reducing leverage in future negotiations. Ensuring the justification for the sole-source award is robust and that the contractor's pricing is fair and reasonable becomes paramount for mitigating these risks.
What is the historical spending pattern for aircraft manufacturing services with The Boeing Company?
Historical spending data with The Boeing Company for aircraft manufacturing services would reveal trends in contract values, competition levels, and pricing over time. Without access to a comprehensive database of past contracts, it's impossible to provide specific figures. However, The Boeing Company is a major defense contractor, and it is expected that they would have numerous contracts for aircraft manufacturing, ranging from sole-source to competitively awarded, with varying values and durations. Analyzing this historical data would help determine if this $25.1 million contract is typical, an outlier, or part of a pattern of increasing or decreasing investment in specific manufacturing capabilities.
What is the significance of the 'Delivery Order' contract type in this context?
A 'Delivery Order' typically indicates that this contract is a task order issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar type of basic ordering agreement. This means that the overarching terms, conditions, and potentially some pricing structures were established previously, possibly through a competitive process. The delivery order then specifies the exact quantity, delivery schedule, and sometimes specific pricing for a particular shipment or set of services. In this case, it suggests that the need for these aircraft manufacturing services was anticipated, and a framework was already in place, with this order representing a specific call against that framework.
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: TIME AND MATERIALS (Y)
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: $29,453,503
Exercised Options: $29,453,503
Current Obligation: $25,149,084
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: 2018-06-01
Current End Date: 2020-03-31
Potential End Date: 2020-03-31 00:00:00
Last Modified: 2024-04-09
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