DoD awards $17M to Boeing for B-52 Engineering Services, raising questions about competition

Contract Overview

Contract Amount: $17,062,093 ($17.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-06-17

End Date: 2022-05-26

Contract Duration: 708 days

Daily Burn Rate: $24.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-1 B-52 ENGINEERING SERVICES (BBES)

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to THE BOEING COMPANY for work described as: B-1 B-52 ENGINEERING SERVICES (BBES) Key points: 1. Significant contract awarded to a single, large incumbent provider. 2. Lack of competition may lead to suboptimal pricing and innovation. 3. Potential for cost overruns given the Cost Plus Fixed Fee structure. 4. Focus on sustainment of aging aircraft highlights critical defense needs.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, raises concerns about cost efficiency. Benchmarking against similar engineering support contracts for legacy aircraft is difficult without competitive data.

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. The absence of competition limits price discovery and potentially increases costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive bidding for these essential engineering services.

Public Impact

Ensures continued operational readiness of the B-52 bomber fleet. Supports critical maintenance and upgrade programs for a strategic asset. Potential for taxpayer funds to be used inefficiently without competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Sole-source award

Positive Signals

Supports critical defense platform
Incumbent has deep institutional knowledge

Sector Analysis

This contract falls within the Defense sector, specifically supporting aircraft manufacturing and sustainment. Spending on engineering services for legacy platforms like the B-52 is common but requires careful oversight to ensure value.

Small Business Impact

This contract does not appear to involve small business participation. The nature of specialized engineering services for major defense platforms often favors large, established contractors.

Oversight & Accountability

The sole-source nature of this award warrants close oversight by the Department of Defense to ensure costs are reasonable and performance meets requirements. Robust auditing of the Cost Plus Fixed Fee elements is crucial.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency in pricing
Reliance on a single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to THE BOEING COMPANY. B-1 B-52 ENGINEERING SERVICES (BBES)

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 $17.1 million.

What is the period of performance?

Start: 2020-06-17. End: 2022-05-26.

What is the justification for not competing this essential engineering support contract for the B-52?

The justification for not competing this contract likely stems from the specialized knowledge and historical data The Boeing Company possesses regarding the B-52 platform. However, a thorough review should confirm that no other qualified vendors could provide similar services, even with a knowledge transfer period, to ensure the best value for the government.

How can the Department of Defense mitigate cost risks associated with this Cost Plus Fixed Fee, sole-source contract?

Mitigation strategies include rigorous auditing of all incurred costs, establishing clear performance metrics and incentives, and actively seeking opportunities to introduce competition in future contract actions or modifications. Regular reviews of the fixed fee and potential for cost savings should be conducted.

What is the long-term strategic value of awarding this contract without competition?

The immediate value lies in maintaining the operational readiness of the B-52 fleet without interruption. However, the long-term strategic value is diminished by the lack of competitive pressure, which can stifle innovation and potentially lead to higher sustainment costs over the aircraft's extended service life.

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: $17,062,093

Exercised Options: $17,062,093

Current Obligation: $17,062,093

Actual Outlays: $79,446

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