DoD Awards $69M for E4B Aircraft Spares to Boeing, Raising Concerns Over Limited Competition
Contract Overview
Contract Amount: $69,255,310 ($69.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-09-28
End Date: 2026-09-29
Contract Duration: 731 days
Daily Burn Rate: $94.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST NO FEE
Sector: Defense
Official Description: SPARES ORDER FOR E4B AIRCRAFT ON CONTRACTOR LOGISTICS SUPPORT CONTRACT
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $69.3 million to THE BOEING COMPANY for work described as: SPARES ORDER FOR E4B AIRCRAFT ON CONTRACTOR LOGISTICS SUPPORT CONTRACT Key points: 1. Significant award of $69.2M for critical aircraft spares. 2. Sole-source award to Boeing, limiting competitive pricing. 3. Potential for inflated costs due to lack of competition. 4. Sector: Defense - Aircraft Parts.
Value Assessment
Rating: questionable
The award amount is substantial, but without competition, it's difficult to assess if the pricing is fair or represents good value. Benchmarking against similar sole-source contracts for specialized aircraft parts is recommended.
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 lack of competition likely hindered price discovery and may have resulted in higher costs for taxpayers.
Taxpayer Impact: Taxpayer funds are being spent without the benefit of competitive bidding, potentially leading to overpayment for these essential aircraft spares.
Public Impact
Ensures continued operational readiness for E4B aircraft. Potential for higher costs impacts overall defense budget allocation. Lack of transparency in pricing due to sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
Positive Signals
- Supports critical defense asset readiness
- Award to established contractor
Sector Analysis
This award falls within the Defense sector, specifically for aircraft parts. Spending on specialized aircraft components can be high, especially when sourced from original equipment manufacturers without competitive pressure.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award, which was a sole-source procurement from a large prime contractor.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of the Air Force should conduct a thorough review of the pricing justification.
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
- Lack of competitive bidding
- Potential for price gouging
- Limited transparency in cost justification
- Dependency on a single supplier
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 $69.3 million to THE BOEING COMPANY. SPARES ORDER FOR E4B AIRCRAFT ON CONTRACTOR LOGISTICS SUPPORT CONTRACT
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 $69.3 million.
What is the period of performance?
Start: 2024-09-28. End: 2026-09-29.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of other responsible sources. The Department of the Air Force should have conducted a price analysis, potentially using historical data, cost breakdowns, or commercial price lists, to ensure the pricing was fair and reasonable despite the lack of competition.
What are the risks associated with relying on a single contractor for critical aircraft spares, particularly for a platform like the E4B?
The primary risks include potential supply chain disruptions if the sole contractor faces issues, lack of innovation or cost-saving improvements, and the inability to leverage competitive market forces to secure better pricing. This dependency can also lead to extended lead times and reduced flexibility in procurement.
How does this sole-source award impact the long-term sustainment strategy and cost-effectiveness for the E4B aircraft fleet?
A sole-source award for spares can increase long-term sustainment costs if prices are not rigorously managed. It may also limit opportunities for alternative sustainment solutions or upgrades that could emerge from a competitive environment. Over time, this can strain the defense budget allocated for aircraft maintenance and 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 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: $69,255,310
Exercised Options: $69,255,310
Current Obligation: $69,255,310
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: 2024-09-28
Current End Date: 2026-09-29
Potential End Date: 2026-09-29 00:00:00
Last Modified: 2024-09-28
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