Air Force awards $18.7M to Boeing for recurring engineering services in FY25
Contract Overview
Contract Amount: $18,680,397 ($18.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2025-01-01
End Date: 2025-12-31
Contract Duration: 364 days
Daily Burn Rate: $51.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: OPTION YEAR 6 BBES RECURRING ENGINEERING SERVICES
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $18.7 million to THE BOEING COMPANY for work described as: OPTION YEAR 6 BBES RECURRING ENGINEERING SERVICES Key points: 1. The contract is a sole-source award to The Boeing Company. 2. This award represents recurring engineering services for aircraft manufacturing. 3. The fixed-price incentive contract type aims to balance cost and performance. 4. The contract duration is 364 days, aligning with a typical option year.
Value Assessment
Rating: fair
The fixed-price incentive contract type suggests an attempt to control costs while ensuring performance. However, without a competitive benchmark, assessing the pricing's true value is difficult. The provided benchmark of $5,132,000 for this type of service is significantly lower than the awarded amount, raising concerns.
Cost Per Unit: $5,132,000
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and may result in higher costs for taxpayers compared to a competitively bid contract.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for these recurring engineering services.
Public Impact
Taxpayers may be overpaying due to the lack of competition. The specific engineering services provided are critical for aircraft maintenance and upgrades. This contract supports a major defense contractor, impacting the aerospace and defense sector. The recurring nature of the services suggests ongoing reliance on Boeing's expertise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Potential for overpayment due to lack of competitive bidding.
- Benchmark cost is significantly lower than awarded amount.
Positive Signals
- Contract type (FPI) aims to incentivize performance.
- Award supports critical recurring engineering services.
- Long-term relationship with a key defense contractor.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically supporting aircraft manufacturing through recurring engineering services. Spending in this area is often characterized by long-term relationships with prime contractors and specialized technical requirements, which can sometimes lead to sole-source awards.
Small Business Impact
This contract was awarded directly to The Boeing Company and does not indicate any subcontracting opportunities for small businesses. Further analysis would be needed to determine if small businesses are involved in the supply chain for these services.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and effective service delivery. Oversight should focus on performance metrics and justification for continued sole-source procurement.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award.
- Significant difference between award amount and benchmark.
- Lack of transparency in price justification.
- Potential for contractor lock-in.
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 $18.7 million to THE BOEING COMPANY. OPTION YEAR 6 BBES RECURRING 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $18.7 million.
What is the period of performance?
Start: 2025-01-01. End: 2025-12-31.
What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for continuity of service where only one source can reasonably provide the required goods or services. To ensure fair and reasonable pricing, the procuring agency would likely conduct a price analysis based on historical data, cost proposals, and potentially comparisons to similar, albeit not identical, services. However, without competition, the rigor of this analysis is inherently limited.
How does the awarded amount compare to the benchmark of $5,132,000, and what factors contribute to this significant difference?
The awarded amount of $18,680,396.90 is substantially higher than the provided benchmark of $5,132,000. This significant difference could be attributed to various factors, including the specific scope of recurring engineering services, the complexity of the aircraft systems involved, the duration of the contract, or potentially an outdated or incomparable benchmark. A detailed cost breakdown and justification from the contractor would be necessary to understand this discrepancy.
What is the long-term strategy for obtaining these recurring engineering services, and will future requirements be competed?
The long-term strategy for these recurring engineering services is unclear from the provided data. While this is an option year, indicating a continuation of services, the plan for future procurements is not specified. Agencies should ideally move towards competitive procurements when feasible to ensure best value for the government. A review of the acquisition plan would reveal whether future competition is anticipated or if continued sole-source awards are planned.
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: FIXED PRICE INCENTIVE (L)
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: $18,680,397
Exercised Options: $18,680,397
Current Obligation: $18,680,397
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
Start Date: 2025-01-01
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-07-23
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