DoD's $47.6M Boeing Contract for Depot Maintenance: A Sole-Source Award with Potential Cost Overruns
Contract Overview
Contract Amount: $47,578,823 ($47.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-06-11
End Date: 2023-12-31
Contract Duration: 933 days
Daily Burn Rate: $51.0K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: DEPOT MAINTENANCE
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $47.6 million to THE BOEING COMPANY for work described as: DEPOT MAINTENANCE Key points: 1. The contract awarded to The Boeing Company for depot maintenance is a significant expenditure. 2. Lack of competition raises concerns about price discovery and potential overpayment. 3. The Cost Plus Incentive Fee structure introduces risk for taxpayers if costs escalate. 4. The sector is 'Other Aircraft Parts and Auxiliary Equipment Manufacturing', indicating specialized needs.
Value Assessment
Rating: questionable
The Cost Plus Incentive Fee (CPIF) contract type can lead to higher costs than fixed-price contracts, especially without strong competition to drive down prices. The lack of a benchmark price (br: 50996) makes it difficult to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may result in the government paying a premium for the services provided by The Boeing Company.
Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may be overpaying for depot maintenance services, as there was no market pressure to ensure the lowest possible price.
Public Impact
Taxpayers may be footing a higher bill due to the lack of competitive bidding. The long duration of the contract (933 days) increases the potential for cost escalation. Dependence on a single contractor for critical depot maintenance could pose a risk to Air Force readiness if issues arise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of price benchmark
Positive Signals
- Contract awarded to a major defense contractor
- Addresses critical depot maintenance needs
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, which is crucial for maintaining the operational readiness of Air Force aircraft. Spending in this area is often high due to the specialized nature of the work and the complexity of modern aircraft.
Small Business Impact
This contract was awarded to The Boeing Company, a large prime contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large, sole-source sole-source contracts.
Oversight & Accountability
The contract's sole-source nature warrants close oversight to ensure costs are managed effectively and that the services provided meet the required standards. The Department of the Air Force should actively monitor performance and expenditures.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Incentive Fee structure carries inherent cost escalation risks.
- Lack of a price benchmark makes value assessment difficult.
- Long contract duration increases exposure to cost increases.
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 $47.6 million to THE BOEING COMPANY. DEPOT 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $47.6 million.
What is the period of performance?
Start: 2021-06-11. End: 2023-12-31.
What is the justification for awarding this depot maintenance contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs that cannot be met by other vendors. Without specific details on the justification, it's difficult to assess fairness. However, the Department of the Air Force should be employing robust cost analysis techniques and potentially negotiating incentive structures to mitigate the risks associated with non-competitive awards and ensure taxpayer value.
What are the potential risks associated with a Cost Plus Incentive Fee contract for depot maintenance, particularly when awarded sole-source?
CPIF contracts can incentivize cost savings, but when awarded sole-source, the government lacks the leverage of competition to drive down the base cost. This increases the risk of cost overruns if the contractor's efficiency is low or if unforeseen issues arise. The incentive fee structure might not be sufficient to offset potentially inflated base costs, leading to higher overall expenditure for the taxpayer.
How does this contract contribute to the overall effectiveness and readiness of the Air Force's aircraft fleet?
Depot maintenance is critical for ensuring aircraft are mission-capable and safe. By contracting with a major manufacturer like Boeing, the Air Force likely aims to leverage specialized expertise and parts availability. However, the effectiveness is directly tied to the quality of the maintenance performed and the timeliness of the repairs, which should be closely monitored under this contract.
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 PLUS INCENTIVE FEE (V)
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: $47,578,823
Exercised Options: $47,578,823
Current Obligation: $47,578,823
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: 2021-06-11
Current End Date: 2023-12-31
Potential End Date: 2023-12-31 00:00:00
Last Modified: 2024-12-20
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