DoD Awards Boeing $63.8M for E4B Contractor Logistic Services, Raising Oversight Concerns
Contract Overview
Contract Amount: $63,824,748 ($63.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-09-18
End Date: 2025-07-14
Contract Duration: 665 days
Daily Burn Rate: $96.0K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: PURCHASE OF CONTRACTOR LOGISTIC SERVICES FOR THE E4B
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $63.8 million to THE BOEING COMPANY for work described as: PURCHASE OF CONTRACTOR LOGISTIC SERVICES FOR THE E4B Key points: 1. Significant contract value of $63.8M for specialized logistic services. 2. Sole-source award to Boeing highlights potential lack of competition. 3. Contract duration of 665 days requires careful monitoring for effectiveness. 4. The 'Other Aircraft Parts' NAICS code suggests a niche but critical sector.
Value Assessment
Rating: questionable
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar logistic support contracts is difficult due to the specialized nature of the E4B aircraft.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially increases costs for taxpayers.
Taxpayer Impact: The lack of competition for this substantial contract raises concerns about whether the government achieved the best possible price for these essential services.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The critical nature of E4B support means any disruption could have significant national security implications. Long-term reliance on a single contractor for specialized support could stifle innovation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of small business participation
Positive Signals
- Essential support for critical aircraft
- Experienced contractor
Sector Analysis
This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, which is vital for national defense. Spending benchmarks for specialized logistic services on unique platforms like the E4B are difficult to establish due to their limited number and specific requirements.
Small Business Impact
The data indicates no small business participation in this contract. Given the specialized nature of the services, it's possible that opportunities for small businesses were limited, or not actively sought.
Oversight & Accountability
The sole-source nature of this award warrants increased oversight to ensure cost control and performance standards are met. Regular reviews of contractor performance and cost justification are crucial for accountability.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type increases risk of cost overruns.
- Lack of small business participation.
- Long contract duration requires sustained oversight.
- Potential for contractor lock-in due to specialized services.
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 $63.8 million to THE BOEING COMPANY. PURCHASE OF CONTRACTOR LOGISTIC SERVICES FOR THE E4B
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 $63.8 million.
What is the period of performance?
Start: 2023-09-18. End: 2025-07-14.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single contractor. For the E4B, this could relate to specific modifications, maintenance procedures, or intellectual property essential for its operation. Alternative competitive strategies might have been explored but deemed infeasible due to these unique requirements, though a thorough review of such considerations is vital for ensuring taxpayer value.
How will the Cost Plus Incentive Fee structure be managed to prevent cost overruns and ensure contractor efficiency?
Effective management of a Cost Plus Incentive Fee (CPIF) contract requires clearly defined performance metrics and achievable target costs. The government must establish robust monitoring mechanisms to track expenditures, verify costs, and ensure the contractor meets or exceeds agreed-upon performance goals. Incentive fees should be structured to reward efficiency and cost savings, while penalties should be in place for failing to meet critical objectives, ensuring alignment between contractor and government interests.
What is the long-term strategy for E4B contractor logistic support to ensure continued availability and explore potential cost savings?
The long-term strategy should involve periodic re-evaluation of the sole-source justification and exploration of competitive opportunities as technology or market conditions evolve. This could include breaking down services into smaller, more competitive packages or encouraging contractor innovation for cost reduction. Developing organic government capabilities or fostering a broader industrial base for E4B support could also be considered to mitigate long-term sole-source risks and ensure sustained operational readiness.
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: $63,824,748
Exercised Options: $63,824,748
Current Obligation: $63,824,748
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: 2023-09-18
Current End Date: 2025-07-14
Potential End Date: 2025-07-14 00:00:00
Last Modified: 2025-05-28
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