DoD awards Boeing $20M for aircraft parts, a sole-source contract with time and materials terms
Contract Overview
Contract Amount: $20,059,687 ($20.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2009-09-25
End Date: 2014-10-31
Contract Duration: 1,862 days
Daily Burn Rate: $10.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: PROGRAM MANAGEMENT
Place of Performance
Location: WICHITA, SEDGWICK County, KANSAS, 67210
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $20.1 million to THE BOEING COMPANY for work described as: PROGRAM MANAGEMENT Key points: 1. Contract awarded to a single vendor suggests potential for higher pricing due to lack of competition. 2. Time and Materials pricing structure can lead to cost overruns if not closely managed. 3. The contract's duration of over 5 years indicates a long-term need for these aircraft parts. 4. Awarded by the Defense Contract Management Agency, highlighting a focus on defense procurement. 5. The specific part category, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' points to specialized needs within the aerospace sector.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without specific details on the aircraft parts procured and their market rates. However, the 'NOT COMPETED' status and 'TIME AND MATERIALS' pricing model raise concerns about potential overspending compared to a competitively bid fixed-price contract. The total value of over $20 million over its lifespan suggests a significant investment where price scrutiny is warranted.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not open to competition from other 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 limits the government's ability to leverage market forces to secure the best possible price.
Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust oversight to ensure fair pricing.
Public Impact
The primary beneficiaries are likely the U.S. military branches relying on these aircraft parts for operational readiness. Services delivered include the manufacturing and supply of specialized aircraft components. The geographic impact is centered around the contractor's location in Kansas (KS) and the deployment locations of the affected aircraft. Workforce implications include employment at The Boeing Company and its supply chain partners.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potentially increases costs.
- Time and Materials contract type carries inherent risk of cost escalation without strict oversight.
- Lack of competition may reduce incentives for innovation or efficiency improvements from the contractor.
Positive Signals
- Award to a major defense contractor like Boeing suggests a focus on established capabilities and reliability.
- The long contract duration indicates a stable, ongoing requirement, potentially leading to economies of scale if managed well.
- Specific part designation implies a critical role in maintaining defense aviation assets.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for such components is characterized by high technical barriers to entry, stringent quality requirements, and significant government procurement. Spending in this area is driven by the need to maintain and modernize military aviation fleets, with major players like Boeing dominating a substantial portion of the market.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information on subcontracting plans for small businesses. The sole-source nature of the award further reduces opportunities for small businesses to participate directly in this specific contract, though they may be part of Boeing's broader supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contract compliance and performance. The 'TIME AND MATERIALS' pricing structure necessitates rigorous monitoring of labor hours and material costs to prevent overcharging. Transparency would be enhanced through detailed reporting requirements from the contractor on expenditures.
Related Government Programs
- Aircraft Component Manufacturing
- Defense Logistics Support
- Aerospace Parts Procurement
- Military Aircraft Maintenance
Risk Flags
- Sole-source award
- Time and Materials pricing
- Lack of competition
Tags
defense, department-of-defense, the-boeing-company, aircraft-parts, manufacturing, not-competed, sole-source, time-and-materials, definitive-contract, kansas, program-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.1 million to THE BOEING COMPANY. PROGRAM MANAGEMENT
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 $20.1 million.
What is the period of performance?
Start: 2009-09-25. End: 2014-10-31.
What is the specific type of aircraft these parts are intended for, and what is the criticality of these components to the aircraft's function?
The provided data does not specify the exact aircraft model or the criticality of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' components. However, given the award by the Department of Defense and the contractor's specialization, it is highly probable that these parts are essential for the operational readiness and safety of military aircraft. Criticality could range from structural integrity components to vital engine or avionics parts. Further investigation into the contract's statement of work would be required to ascertain the precise nature and importance of these parts.
What justification was provided for the sole-source award, and were any alternatives considered?
The data indicates the contract was 'NOT COMPETED,' implying a sole-source justification was made. Common reasons for sole-sourcing include unique capabilities of a single provider, urgent and compelling needs where competition is impractical, or follow-on work to an existing system where only the original manufacturer can provide compatible parts. Without access to the specific justification documentation (e.g., Justification and Approval - J&A), it's impossible to detail the exact reasoning or confirm if alternatives were rigorously explored. The lack of competition suggests that either no other vendor could meet the technical requirements, or the perceived cost/time savings of sole-sourcing outweighed the benefits of a competitive process.
How does the Time and Materials (T&M) pricing structure compare to industry standards for similar aircraft parts, and what controls are in place to manage costs?
Time and Materials (T&M) contracts are generally considered higher risk for the government due to their open-ended nature, allowing costs to fluctuate based on actual labor hours and material expenses. For specialized aircraft parts, T&M might be used when the scope of work is uncertain or difficult to estimate upfront. However, industry best practices and government regulations (like the FAR) mandate strict controls for T&M contracts. These typically include establishing ceiling prices, requiring detailed timesheets and material cost documentation, and conducting regular audits. Comparing T&M rates to market benchmarks for similar parts and labor requires detailed knowledge of the specific components and skill sets involved, which is not available in the provided summary data.
What is Boeing's historical performance record with the Department of Defense for similar 'Other Aircraft Parts' contracts, particularly regarding cost overruns or delivery issues?
The provided data does not include historical performance metrics for Boeing on similar contracts. However, as a major defense contractor, Boeing has a long and extensive history of supplying various components and platforms to the DoD. Performance can vary across contracts. Assessing Boeing's track record for this specific category would necessitate a review of past performance evaluations, contract close-out data, and any documented disputes or quality issues related to 'Other Aircraft Parts' over the contract's lifespan (2009-2014). Generally, large contractors are expected to meet stringent quality and delivery standards, but occasional deviations can occur.
What was the total spending on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the DoD during the contract period (2009-2014), and how does this Boeing contract compare?
The provided data only details this specific $20 million contract awarded to Boeing. It does not offer a broader picture of the DoD's total spending on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' during the 2009-2014 period. To understand how this contract fits into the larger spending landscape, one would need access to comprehensive DoD procurement databases or budget reports. This would allow for comparison of the total market size, average contract values, and the proportion of spending allocated to sole-source versus competitively awarded contracts within this category.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,059,687
Exercised Options: $20,059,687
Current Obligation: $20,059,687
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-09-25
Current End Date: 2014-10-31
Potential End Date: 2014-10-31 00:00:00
Last Modified: 2020-10-05
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