DoD awards Boeing $383.8M C-17 Labor Sustainment contract, raising concerns about competition
Contract Overview
Contract Amount: $383,845,444 ($383.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2019-10-01
End Date: 2020-09-30
Contract Duration: 365 days
Daily Burn Rate: $1.1M/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: C-17 LABOR SUSTAINMENT
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $383.8 million to THE BOEING COMPANY for work described as: C-17 LABOR SUSTAINMENT Key points: 1. Significant contract value for aircraft sustainment. 2. Sole-source award to Boeing limits competitive pricing. 3. Potential risk of inflated costs due to lack of competition. 4. Defense sector spending on critical aircraft maintenance.
Value Assessment
Rating: questionable
The contract value of $383.8M for one year of sustainment is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar services.
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 may lead to higher costs for taxpayers as there is no competitive pressure to reduce prices.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for C-17 labor sustainment services.
Public Impact
Ensures continued operational readiness of the C-17 fleet. Supports critical military airlift capabilities. Potential for taxpayer funds to be used inefficiently due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Ensures critical aircraft sustainment
- Supports national defense
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing and sustainment. Spending benchmarks for similar sustainment contracts can vary widely based on aircraft type, age, and required services.
Small Business Impact
There is no indication of small business participation in this sole-source award. Future contracts should explore opportunities for small businesses in sustainment and support roles.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, oversees this contract. Robust oversight is crucial to ensure fair pricing and performance, especially in sole-source situations.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency in pricing
- No clear small business participation
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $383.8 million to THE BOEING COMPANY. C-17 LABOR SUSTAINMENT
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 $383.8 million.
What is the period of performance?
Start: 2019-10-01. End: 2020-09-30.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of other responsible sources. For the C-17, Boeing is the original manufacturer, which often leads to sole-source sustainment contracts due to specialized knowledge and tooling required.
What are the potential risks associated with a sole-source contract of this magnitude?
The primary risks include inflated pricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and potential for vendor lock-in. Without competitive pressure, the government has less leverage to negotiate favorable terms and costs.
How can the government ensure value for money on future sole-source sustainment contracts?
The government can ensure value by conducting thorough market research to identify potential competitors, negotiating firm-fixed-price elements where possible, implementing robust performance metrics and incentives, and performing detailed cost analyses. Independent government cost estimates are also crucial.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
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: 14441 ASTRONAUTICS LN, HUNTINGTON BEACH, CA, 92647
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: $396,466,260
Exercised Options: $396,466,260
Current Obligation: $383,845,444
Actual Outlays: $47,933,223
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852612D0001
IDV Type: IDC
Timeline
Start Date: 2019-10-01
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2025-09-17
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