Boeing awarded $5.58M for C-32/C-40 aircraft logistics support, highlighting full and open competition

Contract Overview

Contract Amount: $5,576,664 ($5.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-07-01

End Date: 2024-09-12

Contract Duration: 439 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT FOR C-32/C-40 AIRCRAFT FLEETS.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $5.6 million to THE BOEING COMPANY for work described as: CONTRACTOR LOGISTICS SUPPORT FOR C-32/C-40 AIRCRAFT FLEETS. Key points: 1. Contract awarded to a single, established prime contractor with extensive experience in aircraft support. 2. Pricing structure is firm-fixed-price, which shifts cost risk to the contractor. 3. Performance is rated 'OK', suggesting no significant issues to date. 4. Contract duration is approximately 14 months, indicating a short-term support need. 5. The contract falls under 'Other Support Activities for Air Transportation', a niche but critical sector. 6. Awarded via full and open competition, suggesting a robust bidding process.

Value Assessment

Rating: good

The contract value of $5.58 million for approximately 14 months of logistics support for C-32/C-40 aircraft appears reasonable given the specialized nature of the services. Benchmarking against similar, highly technical aviation support contracts suggests that pricing is likely competitive, especially considering the firm-fixed-price structure which incentivizes contractor efficiency. The award to a sole, highly experienced provider like Boeing, while potentially limiting immediate price reduction opportunities, ensures access to specialized knowledge and parts critical for these specific aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The specific number of bidders is not provided, but the designation suggests a competitive process was employed. This approach is generally favored as it allows for a wider range of potential suppliers to offer their services, theoretically leading to better price discovery and value for the government.

Taxpayer Impact: Full and open competition maximizes the potential for the government to secure the best possible pricing and service terms, ultimately benefiting taxpayers by ensuring funds are used efficiently.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who rely on the operational readiness of the C-32 and C-40 aircraft fleets. Services delivered include essential logistics support, ensuring the continued functionality and availability of these critical air transport assets. The geographic impact is likely concentrated around operational bases and maintenance facilities where these aircraft are stationed or serviced. Workforce implications may include the utilization of specialized technicians and support staff, both within the contractor's organization and potentially government personnel overseeing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single prime contractor for specialized parts and expertise could create supply chain vulnerabilities.

Positive Signals

Firm-fixed-price contract structure transfers cost overrun risk to the contractor.
Awarded through full and open competition, suggesting a competitive initial pricing environment.
Contractor has a strong track record in aerospace and defense, implying reliable service delivery.
Performance is currently rated 'OK', indicating satisfactory execution of contract requirements.

Sector Analysis

This contract operates within the aerospace and defense sector, specifically focusing on aviation support services. The market for specialized aircraft logistics, particularly for government fleets, is characterized by high barriers to entry due to technical expertise, security clearances, and established relationships. Spending in this area is driven by the need to maintain the operational readiness of military and government aircraft, which often have unique configurations and demanding operational requirements. Comparable spending benchmarks would typically involve other government contracts for fleet maintenance, repair, and overhaul (MRO) services for similar aircraft types.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor is The Boeing Company, a large aerospace corporation. While the prime contract is not set aside for small businesses, there is potential for subcontracting opportunities to small businesses within the broader logistics and support network. However, the direct analysis of small business participation requires further data on subcontracting plans and actual awards.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractors meet contract requirements, including quality, delivery schedules, and cost controls. The firm-fixed-price nature of the contract shifts some financial risk to the contractor, but government oversight remains crucial for performance monitoring and compliance. Transparency is facilitated through contract databases like FPDS, and potential issues could be addressed by the contracting officer and potentially the Inspector General if fraud or significant mismanagement is suspected.

Related Government Programs

Aircraft Maintenance and Repair
Air Transportation Services
Defense Logistics Support
Government Aircraft Operations
Aerospace Contractor Services

Risk Flags

Potential for sole-source dependency in future renewals if competition is not maintained.
Risk of performance degradation if contractor resources are reallocated to higher-priority contracts.
Dependence on specific, potentially limited, supply chains for aircraft parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.6 million to THE BOEING COMPANY. CONTRACTOR LOGISTICS SUPPORT FOR C-32/C-40 AIRCRAFT FLEETS.

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 $5.6 million.

What is the period of performance?

Start: 2023-07-01. End: 2024-09-12.

What is The Boeing Company's track record with similar government aviation support contracts?

The Boeing Company has an extensive and long-standing track record of providing a wide array of aviation-related services to the U.S. government, including logistics support, maintenance, repair, and overhaul (MRO) for various military and civilian aircraft platforms. Their experience spans decades and includes complex systems like the C-17, KC-46, and various fighter and bomber aircraft. This history suggests a deep understanding of government contracting requirements, regulatory compliance, and the technical demands of maintaining specialized fleets. While specific performance metrics for past contracts would require detailed analysis, Boeing's continued success in securing large-scale aviation support contracts indicates a generally positive performance history and a strong capability to meet government needs.

How does the awarded value compare to historical spending on C-32/C-40 aircraft logistics?

Analyzing historical spending requires access to detailed contract data over multiple years for these specific aircraft. However, the current award of approximately $5.58 million for a period of roughly 14 months provides a snapshot. To establish a comparative benchmark, one would need to aggregate spending on similar logistics support contracts for the C-32 and C-40 fleets over previous fiscal years. Factors such as inflation, changes in operational tempo, fleet size, and evolving support requirements would influence year-over-year comparisons. Without that granular historical data, it's challenging to definitively state if this award represents an increase or decrease in spending trends. However, the firm-fixed-price nature suggests an effort to control costs within this specific award period.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential supply chain disruptions for specialized parts, the risk of contractor performance issues impacting aircraft availability, and the possibility of cost overruns if the firm-fixed-price structure is not adequately managed by the contractor. Mitigation strategies are embedded within the contract and oversight processes. The government benefits from the firm-fixed-price structure, which places the financial risk of cost overruns on Boeing. The Defense Contract Management Agency (DCMA) provides oversight to monitor performance and ensure compliance. Furthermore, Boeing's established position and experience in this sector suggest a lower probability of performance failure. Contingency planning for parts sourcing and robust communication channels between the government and contractor are also implicit mitigation measures.

How effective is the firm-fixed-price (FFP) contract type in ensuring value for money for this type of service?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money for services where the scope of work is well-defined and risks can be reasonably anticipated, such as logistics support for established aircraft fleets. Under an FFP contract, the contractor, Boeing, assumes the primary risk of cost overruns. This incentivizes Boeing to manage its resources efficiently and control costs to maximize profit. For the government, FFP provides cost certainty, as the total price is fixed regardless of the contractor's actual costs. This predictability is valuable for budgeting. The effectiveness hinges on the accuracy of the initial cost estimate and the contractor's ability to execute within that budget. Given Boeing's expertise, FFP is a suitable choice for this contract, promoting efficiency and cost control.

What is the significance of the contract being awarded under 'full and open competition' for taxpayer value?

Awarding this contract under 'full and open competition' is significant for taxpayer value because it theoretically maximizes the opportunity for the government to obtain the best possible price and terms. This process allows any qualified source to submit a bid, fostering a competitive environment. Competition drives down prices as bidders strive to offer the most attractive proposals to win the contract. It also encourages innovation and efficiency among potential bidders, as they seek to differentiate their offerings. While the specific number of bidders isn't detailed, the designation implies that the government actively sought multiple proposals, reducing the risk of awarding a contract at an inflated price due to a lack of alternatives. This competitive approach is a cornerstone of responsible government procurement.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

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: $5,576,664

Exercised Options: $5,576,664

Current Obligation: $5,576,664

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $3,400,274

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA813423DB004

IDV Type: IDC

Timeline