Boeing awarded $50.3M engineering support contract for multiple aircraft platforms by DoD

Contract Overview

Contract Amount: $50,273,521 ($50.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-02-01

End Date: 2021-01-31

Contract Duration: 365 days

Daily Burn Rate: $137.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: ENGINEERING SUPPORT SERVICES CONTRACT FOR MULTIPLE AIRCRAFT PLATFORMS

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $50.3 million to THE BOEING COMPANY for work described as: ENGINEERING SUPPORT SERVICES CONTRACT FOR MULTIPLE AIRCRAFT PLATFORMS Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. Fixed Price Incentive contract type suggests shared risk between government and contractor. 3. Contract duration of 365 days indicates a short-term need for engineering services. 4. The contract's value is significant, requiring careful oversight of performance and costs. 5. Geographic location of contract performance is Oklahoma. 6. This contract falls under engineering services, a critical support function for defense operations.

Value Assessment

Rating: fair

The contract value of $50.3 million for one year of engineering support services is substantial. Without comparable contract data for similar services on multiple aircraft platforms, a precise value-for-money assessment is difficult. However, the 'NOT COMPETED' nature of the award suggests potential for higher costs than if robust competition had been pursued. The Fixed Price Incentive (FPI) contract type aims to control costs by incentivizing the contractor to meet targets, but requires diligent government oversight to ensure fair pricing and prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential offerors. This approach is typically used when only one contractor possesses the unique capabilities or proprietary knowledge required for the service. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. While sole-source awards can be justified in specific circumstances, they warrant scrutiny to ensure they are not a result of inadequate market research or planning.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the most cost-effective outcome. Without competitive pressure, the awarded price may be higher than what could have been secured through an open bidding process.

Public Impact

The primary beneficiaries are the Department of Defense and its various aircraft platforms, which will receive essential engineering support. Services delivered include engineering expertise crucial for the maintenance, sustainment, and potential upgrades of complex aircraft systems. The geographic impact is concentrated in Oklahoma, where the contract performance is scheduled. Workforce implications include the potential employment of skilled engineers and technical personnel by The Boeing Company in the Oklahoma region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for innovation and efficiency from the contractor.
Fixed Price Incentive contract requires robust government oversight to manage cost risks effectively.

Positive Signals

Award to a single, experienced contractor like Boeing may ensure continuity of essential services.
Fixed Price Incentive contract structure aligns some contractor incentives with government cost objectives.
The contract addresses a critical need for engineering support for multiple aircraft platforms.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government spending. Engineering services are a vital component of this sector, supporting the design, development, sustainment, and modernization of military platforms. The market for such services is often dominated by large, established prime contractors like Boeing, who possess specialized knowledge and extensive experience. This contract represents a portion of the broader defense engineering services market, which is driven by national security needs and technological advancements.

Small Business Impact

This contract was awarded directly to The Boeing Company and does not appear to have a specific small business set-aside component. Given the sole-source nature and the prime contractor's size, the primary impact on small businesses would likely be through subcontracting opportunities. However, without specific subcontracting plans or goals detailed in the award, it is difficult to assess the extent to which small businesses will benefit or be involved in fulfilling this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management authorities, potentially involving the Defense Contract Management Agency (DCMA) given its role in contract administration. The Fixed Price Incentive (FPI) contract type necessitates close monitoring of performance against established targets and cost ceilings. Transparency regarding performance metrics and cost expenditures would be crucial for accountability. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Engineering and Product Development
Defense Logistics Support
Military Aircraft Sustainment Programs

Risk Flags

Sole-source award
Potential for cost overruns with FPI contract type
Lack of detailed performance metrics in award summary

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.3 million to THE BOEING COMPANY. ENGINEERING SUPPORT SERVICES CONTRACT FOR MULTIPLE AIRCRAFT PLATFORMS

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 $50.3 million.

What is the period of performance?

Start: 2020-02-01. End: 2021-01-31.

What is The Boeing Company's track record with similar engineering support contracts for multiple aircraft platforms?

The Boeing Company has an extensive and long-standing track record in providing engineering support services for a wide array of military aircraft platforms. Historically, Boeing has served as a prime contractor for numerous complex defense programs, including the development, sustainment, and upgrade of aircraft such as the F-15, F/A-18, C-17, and various rotorcraft. Their experience encompasses a broad spectrum of engineering disciplines, including systems engineering, avionics, structural engineering, and software development. While specific performance data for individual contracts is often proprietary or aggregated within broader program reviews, Boeing's continued role as a major defense contractor suggests a generally accepted capability to meet the demanding requirements of such support services. However, the specific nature and scale of 'multiple aircraft platforms' in this $50.3M contract would require a deeper dive into the Statement of Work (SOW) to compare directly with past engagements.

How does the $50.3 million contract value compare to industry benchmarks for similar engineering support services?

Benchmarking the $50.3 million contract value for engineering support services on multiple aircraft platforms is challenging without detailed specifics on the scope of work, the types of aircraft involved, and the duration of the services. However, for context, large-scale sustainment and engineering support contracts for major defense platforms can range from tens of millions to billions of dollars annually. Given this contract is for a 365-day period, the daily burn rate is approximately $137,736. This figure needs to be evaluated against the complexity and criticality of the engineering tasks required. If the services involve high-level systems integration, advanced diagnostics, or significant redesign efforts across several complex platforms, the cost might be considered reasonable. Conversely, if it's primarily routine maintenance engineering or support for less complex systems, it could be on the higher side. The sole-source nature also implies that competitive pricing benchmarks are absent, making a direct value-for-money comparison difficult.

What are the primary risks associated with this sole-source, Fixed Price Incentive contract?

This contract presents several key risks. The primary risk stems from its sole-source nature: the absence of competition means the government may not be achieving the most favorable pricing and terms possible. This lack of market pressure can potentially lead to higher costs than if the contract had been competed. Secondly, the Fixed Price Incentive (FPI) contract type, while designed to share risk and incentivize performance, carries inherent risks for both parties. For the government, the risk is that the contractor may not achieve the target cost or performance, leading to higher final prices or reduced quality. Conversely, the contractor risks absorbing cost overruns if they exceed the ceiling price. Effective management and oversight are critical to mitigate these risks, particularly in monitoring cost performance, ensuring realistic targets are set, and verifying the quality of engineering services delivered.

How effective is the Fixed Price Incentive (FPI) contract type in ensuring program effectiveness for engineering support?

The Fixed Price Incentive (FPI) contract type aims to enhance program effectiveness by aligning the interests of the government and the contractor towards achieving specific cost and performance targets. In theory, it encourages the contractor to control costs and meet performance objectives to maximize their profit, while the government benefits from a ceiling price that limits its maximum liability. For engineering support services, this can be effective if the performance metrics are well-defined, measurable, and directly linked to the desired outcomes (e.g., system availability, reduction in maintenance time, successful implementation of modifications). However, the effectiveness hinges heavily on the government's ability to establish realistic targets and ceilings, accurately estimate initial costs, and diligently monitor the contractor's progress and expenditures. If targets are poorly set or oversight is lax, the FPI contract can lead to cost overruns or suboptimal performance, undermining program effectiveness.

What are the historical spending patterns for engineering support services within the Department of Defense for similar aircraft platforms?

Historical spending patterns within the Department of Defense (DoD) for engineering support services related to aircraft platforms are substantial and varied, reflecting the complexity and lifecycle costs of military aviation. The DoD consistently allocates significant portions of its budget to sustainment, modernization, and operational readiness of its vast aircraft inventory. This includes funding for contractor support services that range from depot-level maintenance engineering to advanced systems integration and software updates. Spending can fluctuate based on new platform introductions, major upgrade programs, and geopolitical demands. Contracts for such services often span multiple years and can involve large sums, frequently awarded to major defense contractors like Boeing, Lockheed Martin, and Northrop Grumman. Analyzing specific historical spending requires access to detailed contract databases and budget reports, but it is evident that engineering support is a continuous and significant investment area for the DoD, often involving billions of dollars annually across all platforms.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: $56,357,476

Exercised Options: $56,357,476

Current Obligation: $50,273,521

Actual Outlays: $10,649,220

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $1,914,539

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810617D0002

IDV Type: IDC

Timeline