DoD awards Boeing $44.3M for Rotary Switch, raising concerns over sole-source procurement
Contract Overview
Contract Amount: $44,353,860 ($44.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-03-09
End Date: 2028-09-05
Contract Duration: 3,833 days
Daily Burn Rate: $11.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ROTARY SWITCH
Place of Performance
Location: HEATH, LICKING County, OHIO, 43056
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $44.4 million to THE BOEING COMPANY for work described as: ROTARY SWITCH Key points: 1. Significant contract value awarded to a single large business. 2. Lack of competition raises questions about price reasonableness. 3. Long contract duration (2028) may indicate ongoing need or limited alternatives. 4. Specialty item suggests a niche market with potentially few suppliers.
Value Assessment
Rating: questionable
The contract value of $44.3M over its duration is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to potential market alternatives for similar specialized parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there's no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for the rotary switch, as the government did not leverage market forces to secure the best possible price.
Public Impact
Taxpayers may be overpaying for essential defense components due to non-competitive awards. Reliance on a single supplier can create supply chain vulnerabilities for critical defense systems. Lack of transparency in sole-source contracts hinders public trust in government spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
- No small business participation
Positive Signals
- Awarded to a major defense contractor
- Supports Department of the Air Force needs
Sector Analysis
The aerospace and defense sector often involves specialized components where competition can be limited. However, the 'Other Guided Missile and Space Vehicle Parts' category suggests a niche within this sector, making competitive benchmarking challenging.
Small Business Impact
This contract was awarded to The Boeing Company, a large business, and there is no indication of small business participation. This represents a missed opportunity to support small businesses in the defense supply chain.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the price paid is fair and reasonable and that future procurements explore competitive options where feasible.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing due to no competitive pressure.
- Long contract duration (10 years) increases long-term risk.
- No small business participation noted.
- Specific part classification may limit alternative suppliers.
- Cost Plus Fixed Fee contract type can incentivize cost overruns.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, oh, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.4 million to THE BOEING COMPANY. ROTARY SWITCH
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 $44.4 million.
What is the period of performance?
Start: 2018-03-09. End: 2028-09-05.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure price reasonableness?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of adequate competition. The government should have conducted a price analysis, potentially using historical data, cost breakdowns, or market research, to validate the reasonableness of the Cost Plus Fixed Fee pricing structure and the overall contract value.
What are the risks associated with relying on a single supplier for this critical component over a 10-year period?
The primary risks include supply chain disruption if the sole supplier faces production issues, financial instability, or geopolitical challenges. There's also the risk of price escalation over time without competitive pressure. Furthermore, the government's leverage in negotiations diminishes significantly, potentially leading to unfavorable terms or quality compromises.
How effective is this contract in meeting the long-term needs of the Department of the Air Force for this rotary switch?
The contract's effectiveness hinges on the supplier's ability to consistently deliver the required quantity and quality of rotary switches throughout its 10-year duration. While the long term suggests a sustained need, the lack of competition raises questions about whether alternative, potentially more cost-effective or technologically advanced solutions, were adequately explored to ensure optimal long-term value.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA812818R0001
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 801 IRVING WICK DR W, NEWARK, OH, 43056
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: $44,353,860
Exercised Options: $44,353,860
Current Obligation: $44,353,860
Actual Outlays: $1,067,278
Subaward Activity
Number of Subawards: 33
Total Subaward Amount: $12,047,732
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-03-09
Current End Date: 2028-09-05
Potential End Date: 2028-09-05 00:00:00
Last Modified: 2025-12-01
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