DoD awards Boeing $29.9M for E4B Engine Overhauls, raising concerns about competition and value
Contract Overview
Contract Amount: $29,895,870 ($29.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2019-09-30
End Date: 2021-02-15
Contract Duration: 504 days
Daily Burn Rate: $59.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST NO FEE
Sector: Defense
Official Description: E4B ENGINE OVERHAULS AND HEAVY MAINTENANCE
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $29.9 million to THE BOEING COMPANY for work described as: E4B ENGINE OVERHAULS AND HEAVY MAINTENANCE Key points: 1. Significant contract value for specialized aircraft maintenance. 2. Sole reliance on Boeing for E4B engine overhauls limits competitive pricing. 3. Potential for inflated costs due to lack of competition. 4. Sector context: Defense aviation maintenance is critical but often consolidated.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of competition, makes it difficult to assess value. Without benchmarks or competitive bids, it's hard to determine if the $29.9M price is reasonable for the services rendered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers as the government lacks leverage to negotiate a lower price.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for these engine overhauls, as competitive pressures were absent.
Public Impact
Taxpayers may be overpaying for essential aircraft maintenance due to a lack of competition. The E4B fleet's operational readiness could be impacted if maintenance costs escalate significantly. Lack of transparency in pricing for specialized defense contracts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competitive bidding
- Limited transparency in pricing
Positive Signals
- Essential maintenance for critical aircraft
- Contract awarded to established defense contractor
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on heavy maintenance for specialized aircraft. Spending in this area is critical for national security but often involves high costs and limited vendor pools.
Small Business Impact
This contract was awarded to a large prime contractor, The Boeing Company. There is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the cost-plus contract terms are being managed effectively and that the government is receiving fair value for its investment.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Sole-source award justification
- Potential for cost overruns
- Limited price transparency
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ok, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.9 million to THE BOEING COMPANY. E4B ENGINE OVERHAULS AND HEAVY MAINTENANCE
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 $29.9 million.
What is the period of performance?
Start: 2019-09-30. End: 2021-02-15.
What is the justification for awarding this contract sole-source to The Boeing Company, and were alternative solutions or vendors explored?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or essential integration requirements that only one vendor can meet. For the E4B aircraft, Boeing's role as the original manufacturer and maintainer likely plays a significant factor. However, a thorough review should confirm that no other qualified entities could perform the work or that the cost premium for sole-source is justified by the unique circumstances.
How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and taxpayer value in this specific engine overhaul contract?
The CPFF structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it incentivizes the contractor to control costs to maximize their fee, it can also lead to cost overruns if initial estimates are inaccurate. Without competitive pressure, the government has less leverage to negotiate costs, potentially resulting in a higher overall price for the taxpayer compared to fixed-price contracts.
What are the potential risks to the E4B fleet's operational readiness if maintenance costs continue to rise due to a lack of competition?
Rising maintenance costs without competitive justification could strain the defense budget, potentially leading to deferred maintenance or reduced operational tempo for the E4B fleet. This could impact national security readiness. Furthermore, a lack of competitive engagement might disincentivize innovation in maintenance techniques, leading to less efficient or more costly future overhauls.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST NO FEE (S)
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: $29,895,870
Exercised Options: $29,895,870
Current Obligation: $29,895,870
Actual Outlays: $3,684,820
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA810616D0002
IDV Type: IDC
Timeline
Start Date: 2019-09-30
Current End Date: 2021-02-15
Potential End Date: 2021-02-15 00:00:00
Last Modified: 2024-09-23
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