Boeing awarded $73.9M for aircraft manufacturing services, with contract performance rated as OK

Contract Overview

Contract Amount: $73,881,510 ($73.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-04-18

End Date: 2023-12-24

Contract Duration: 1,711 days

Daily Burn Rate: $43.2K/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 $73.9 million to THE BOEING COMPANY for work described as: B-1 ENGINEERING SERVICES Key points: 1. Contract value of $73.9M over nearly four years suggests significant investment in aircraft manufacturing. 2. The 'OK' performance rating indicates satisfactory but not exceptional delivery, warranting closer monitoring. 3. Sole-source award raises questions about potential cost efficiencies and market competition. 4. The contract's duration of over 1700 days points to a long-term need for these specialized services. 5. The use of a Cost Plus Fixed Fee (CPFF) pricing structure requires careful oversight to manage costs. 6. The absence of small business participation suggests a focus on large, specialized prime contractors.

Value Assessment

Rating: fair

The contract value of $73.9M for aircraft manufacturing services over 1711 days appears substantial. Benchmarking this against similar sole-source contracts for specialized aircraft components or manufacturing support would be necessary for a precise value-for-money assessment. The 'OK' performance rating suggests that while services were delivered, there may be room for improvement in efficiency or quality, which could impact overall value. The CPFF contract type necessitates rigorous cost tracking to ensure the fixed fee remains appropriate for the work performed and to prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, security clearances, or proprietary technology. While it ensures a specific capability is met, it limits the potential for price discovery through competition, which could lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards can result in higher prices for taxpayers as the government does not benefit from competitive bidding to drive down costs. This necessitates strong negotiation and oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are likely the Department of Defense, receiving critical aircraft manufacturing services. The services delivered are essential for maintaining and potentially producing aircraft, supporting military readiness. The geographic impact is centered around the contractor's facilities in Oklahoma, supporting local employment and industry. Workforce implications include the employment of skilled labor in aircraft manufacturing and related engineering fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to control costs and prevent overruns.
The 'OK' performance rating suggests potential areas for improvement in service delivery or quality.
Lack of small business involvement may indicate missed opportunities for broader economic participation.

Positive Signals

Contract awarded to a major defense contractor (Boeing) with established expertise in aircraft manufacturing.
Performance rating of 'OK' indicates that contractual obligations were met, albeit without exceptional performance.
The contract duration suggests a stable, long-term requirement being addressed.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality and regulatory requirements. Spending in this area is often driven by defense procurement needs, with major players like Boeing dominating the landscape. Comparable spending benchmarks would typically involve other large-scale aircraft production or sustainment contracts within the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have significant subcontracting plans for them (SB participation is false). This is common for large, complex sole-source awards where the prime contractor possesses unique capabilities. While this ensures the primary requirement is met by a specialized entity, it limits opportunities for small businesses to participate directly in this specific contract, potentially impacting the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, potentially involving the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures are embedded within the CPFF contract terms, requiring detailed cost reporting and performance metrics. Transparency may be limited due to the sole-source nature, but contract awards and basic performance information are typically publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Production and Sustainment Programs
Defense Manufacturing Industrial Base
Aerospace Engineering Services
Military Aircraft Procurement

Risk Flags

Sole-source award may limit price competition.
CPFF contract type requires diligent cost oversight.
Performance rating of 'OK' indicates room for improvement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.9 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 $73.9 million.

What is the period of performance?

Start: 2019-04-18. End: 2023-12-24.

What is the historical spending trend for aircraft manufacturing services provided by The Boeing Company to the Department of Defense?

Analyzing historical spending requires access to a broader dataset of contracts. However, given Boeing's status as a primary defense contractor, it is reasonable to assume significant and consistent spending over many years for aircraft manufacturing and related services. This specific $73.9M contract, spanning from April 2019 to December 2023, represents a substantial but potentially episodic investment. To understand trends, one would need to examine contract awards over a longer period, looking for patterns in contract types (e.g., sole-source vs. competitive), durations, and total values to identify shifts in procurement strategies or demand for Boeing's services.

How does the 'OK' performance rating compare to other contracts awarded to The Boeing Company for similar services?

A performance rating of 'OK' signifies that the contractor met the minimum requirements of the contract but did not exceed expectations. Without access to a database of all Boeing's contract performance ratings for similar aircraft manufacturing services, a direct comparison is difficult. However, 'OK' ratings generally suggest satisfactory performance that warrants attention but may not trigger immediate corrective actions unless trends emerge. If Boeing typically receives 'Exceptional' or 'Very Good' ratings on comparable contracts, this 'OK' rating could be a signal for closer scrutiny of this specific engagement's management and execution. Conversely, if 'OK' is a common rating for complex, long-term projects, it might be considered standard.

What are the specific risks associated with a Cost Plus Fixed Fee (CPFF) contract for aircraft manufacturing?

The primary risk with a CPFF contract for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as costs are reimbursed. While the 'fixed fee' provides a ceiling on the contractor's profit, there's still a risk of cost overruns that increase the total contract price. For the contractor, the risk lies in accurately estimating the costs to ensure the fixed fee is sufficient. Effective oversight is crucial to monitor costs, ensure efficiency, and verify that the fee remains fair for the work performed. In aircraft manufacturing, where technical complexity and material costs can fluctuate, managing these risks requires robust auditing and program management.

What is the strategic importance of this contract within the broader context of DoD's aircraft manufacturing capabilities?

This contract, valued at $73.9M and awarded to Boeing, likely supports a specific, critical need within the DoD's aircraft portfolio. Given its sole-source nature and the contractor's specialization, it probably addresses a unique manufacturing requirement, such as for a particular aircraft type, a specialized component, or sustainment services for an aging fleet. Such contracts are vital for maintaining the DoD's technological edge and operational readiness, ensuring that essential aircraft are produced or maintained to exacting standards. The duration and value suggest a significant, ongoing requirement that underpins a larger strategic objective, possibly related to fleet modernization, specific platform support, or readiness assurance.

What are the implications of this contract being awarded as sole-source rather than through full and open competition?

A sole-source award implies that the DoD determined only Boeing could fulfill this specific requirement, likely due to proprietary technology, unique manufacturing capabilities, or specialized expertise essential for the aircraft involved. The primary implication for the government is the potential lack of competitive pricing, which could lead to higher overall costs compared to a competed contract. It also reduces the opportunity for market research and innovation that often arises from competitive bidding. For taxpayers, this means less assurance of achieving the best possible price. However, in cases where unique capabilities are essential for national security, a sole-source award may be deemed necessary despite the cost implications.

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: $79,162,229

Exercised Options: $79,162,229

Current Obligation: $73,881,510

Actual Outlays: $11,059,369

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810719D0001

IDV Type: IDC

Timeline