Boeing awarded $43M for Air Force contractor support, raising questions about competition and value

Contract Overview

Contract Amount: $42,984,377 ($43.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-01-01

End Date: 2021-10-31

Contract Duration: 669 days

Daily Burn Rate: $64.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B-1 INTERIM CONTRACTOR SUPPORT (ICS) 2020/2021

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $43.0 million to THE BOEING COMPANY for work described as: B-1 INTERIM CONTRACTOR SUPPORT (ICS) 2020/2021 Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of 669 days suggests a long-term need for these services. 3. The contract type is Firm Fixed Price, which shifts some risk to the contractor. 4. No small business set-aside was utilized, potentially impacting opportunities for smaller firms. 5. The contract falls under Aircraft Manufacturing, a critical sector for defense readiness. 6. The award was a Delivery Order, indicating it's part of a larger contract vehicle.

Value Assessment

Rating: questionable

Benchmarking the value of this $43 million contract is challenging due to its sole-source nature and the specific nature of contractor support services. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The duration of nearly two years suggests a substantial commitment, and the absence of comparative contract data makes a direct value-for-money assessment difficult. Further analysis would be needed to understand the specific services rendered and their necessity to determine if the cost aligns with expected outcomes.

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 can provide the required goods or services, or in cases of urgent need. The lack of competition means there were no other bidders to compare against, which can limit the government's ability to secure the most favorable pricing and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiations and may result in paying a premium for the services.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving essential contractor support services. Services likely include technical assistance, maintenance, logistics, or program management related to aircraft. The geographic impact is centered around the Air Force installations where these services are performed, potentially in Oklahoma. Workforce implications may involve specialized technical personnel provided by Boeing, supplementing military or civilian staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the justification for sole-source award.
Contract duration of nearly two years without clear performance metrics is a concern.
No indication of performance monitoring or evaluation mechanisms.
Potential for cost overruns if not closely managed due to lack of competition.

Positive Signals

Firm Fixed Price contract shifts some financial risk to the contractor.
Boeing is a well-established aerospace and defense contractor with significant experience.
Contract supports critical Air Force operations, indicating a necessary service.
Delivery Order structure may indicate adherence to a pre-negotiated contract vehicle.

Sector Analysis

The Aircraft Manufacturing sector is a cornerstone of the defense industrial base, encompassing the design, production, and support of military aircraft. This contract for contractor support services fits within the broader ecosystem of maintaining and operating complex aerospace assets. Spending in this sector is often characterized by long-term relationships, high R&D investment, and significant government oversight due to national security implications. Comparable spending benchmarks are difficult to establish without knowing the specific services, but large-scale support contracts for major weapon systems can run into hundreds of millions or billions of dollars.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to a large prime contractor like Boeing means that opportunities for small businesses would likely be through subcontracting channels, if any are established by Boeing. The absence of a set-aside or explicit subcontracting goals suggests that the primary focus was on securing the required services from the most capable provider, rather than specifically fostering small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, it may receive heightened scrutiny. Transparency regarding the justification for the sole-source award and the performance metrics would be key areas for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Accountability measures would depend on the specific terms and conditions outlined in the delivery order and the overarching contract vehicle.

Related Government Programs

Aircraft Maintenance Services
Logistics Support Services
Defense Contractor Support
Air Force Operations & Maintenance
Aerospace Manufacturing Support

Risk Flags

Sole Source Justification
Lack of Competition
Value for Money Assessment
Performance Metrics Unclear

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.0 million to THE BOEING COMPANY. B-1 INTERIM CONTRACTOR SUPPORT (ICS) 2020/2021

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $43.0 million.

What is the period of performance?

Start: 2020-01-01. End: 2021-10-31.

What specific services does 'INTERIM CONTRACTOR SUPPORT (ICS)' entail for the B-1 program?

The provided data does not detail the specific services encompassed by 'INTERIM CONTRACTOR SUPPORT (ICS)' for the B-1 program. Typically, such support can include a wide range of activities such as aircraft maintenance, repair, overhaul, logistics management, technical assistance, training, and program management. Given the 'INTERIM' nature, it might suggest a temporary need to fill a gap in organic Air Force capabilities or during a transition period for a different support structure. Without further documentation or a detailed statement of work, the precise nature and scope of these services remain undefined, making it difficult to assess their necessity and value.

What was the justification for awarding this contract on a sole-source basis to The Boeing Company?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. The specific justification for this sole-source determination is not included in the data. Common reasons for sole-source awards include unique capabilities possessed by only one contractor, urgent and compelling needs where competition is impractical, or when the award is a follow-on to a previously competed contract where only one source is deemed capable. For a contract of this value and duration, a detailed justification citing specific circumstances, such as proprietary technology, specialized expertise, or critical operational requirements, would typically be required by federal acquisition regulations to ensure fair and reasonable pricing and to demonstrate that competition was truly not feasible.

How does the $43 million contract value compare to historical spending on B-1 contractor support?

The provided data includes a 'br' (base rate or benchmark) value of 64252, but its context is unclear and it's not directly comparable to the total contract value. To assess how the $43 million contract value compares to historical spending on B-1 contractor support, one would need access to historical contract databases and procurement records for the B-1 program. This would involve identifying previous contracts for similar support services, noting their values, durations, and the scope of work. Without this historical context, it is impossible to determine if $43 million represents an increase, decrease, or is in line with past expenditures for similar services. The 'INTERIM' nature of this contract also suggests it might be a temporary or transitional funding mechanism, making direct historical comparisons potentially misleading.

What are the potential risks associated with a sole-source award for critical aircraft support?

Sole-source awards for critical aircraft support carry several potential risks. Firstly, the lack of competition can lead to inflated pricing, as the government does not benefit from the price discovery mechanisms inherent in a competitive bidding process. This can result in a higher cost to the taxpayer. Secondly, there's a risk of reduced innovation and service quality, as the sole provider may face less pressure to improve their offerings. Thirdly, it can create vendor lock-in, making it difficult and costly to switch providers in the future. Finally, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or inefficiency if not properly justified and managed.

What performance metrics or oversight mechanisms are typically in place for such contractor support contracts?

While the specific performance metrics and oversight mechanisms for this particular contract are not detailed in the provided data, federal regulations typically require robust oversight for significant contracts. For contractor support, performance metrics often revolve around timeliness of service delivery, quality of work (e.g., defect rates, adherence to standards), cost control, and responsiveness to Air Force needs. Oversight mechanisms usually include regular progress reviews, site visits, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and contract finance management. For sole-source contracts, oversight is often intensified to ensure the government is receiving fair value and that the contractor is meeting all obligations. The Contracting Officer's Representative (COR) plays a crucial role in day-to-day oversight.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA810718R0002

Pricing Type: FIRM FIXED PRICE (J)

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: $47,193,103

Exercised Options: $43,224,016

Current Obligation: $42,984,377

Actual Outlays: $792,796

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