DoD's $241M C-17 Labor Sustainment Contract Awarded to Boeing, Raising Competition Concerns

Contract Overview

Contract Amount: $240,985,204 ($241.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-10-01

End Date: 2022-09-30

Contract Duration: 364 days

Daily Burn Rate: $662.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY22 VIRTUAL-FLEET-COMMON AND UNIQUE LABOR SUSTAINMENT FOR C17 FLEET.

Place of Performance

Location: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90808

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $241.0 million to THE BOEING COMPANY for work described as: FY22 VIRTUAL-FLEET-COMMON AND UNIQUE LABOR SUSTAINMENT FOR C17 FLEET. Key points: 1. Significant contract value of $241 million for C-17 fleet labor sustainment. 2. Sole awardee, Boeing, raises questions about competitive pricing and innovation. 3. Potential risk of overpayment due to lack of competition. 4. Sector focus on Aircraft Manufacturing within the Defense industry.

Value Assessment

Rating: questionable

The contract's value of $241 million is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar sustainment contracts for large aircraft fleets.

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 limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: The absence of competition could result in taxpayers paying a premium for these labor sustainment services.

Public Impact

Taxpayers may be overpaying for essential C-17 aircraft maintenance. The long-term reliance on a single contractor could stifle technological advancements in fleet sustainment. The Department of Defense's procurement strategy warrants scrutiny regarding competitive practices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost overruns
Sole-source award

Positive Signals

Essential service for critical aircraft
Established contractor with existing knowledge

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending benchmarks for similar sustainment contracts are difficult to establish without competitive data, but $241 million is a significant investment.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The focus appears to be on the prime contractor, Boeing.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight to ensure the government receives value for its investment and that contract terms are strictly adhered to.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits price competition.
Potential for inflated costs due to lack of market pressure.
Limited transparency in cost justification.
Dependency on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $241.0 million to THE BOEING COMPANY. FY22 VIRTUAL-FLEET-COMMON AND UNIQUE LABOR SUSTAINMENT FOR C17 FLEET.

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 $241.0 million.

What is the period of performance?

Start: 2021-10-01. End: 2022-09-30.

What is the justification for awarding this 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 circumstances. Without competitive bidding, the Department of Defense must implement rigorous price analysis and potentially engage independent cost estimators to validate the reasonableness of Boeing's pricing for the C-17 labor sustainment services.

What are the long-term risks associated with relying solely on Boeing for C-17 labor sustainment?

The primary long-term risks include potential price escalation without competitive pressure, reduced incentive for innovation in sustainment practices, and a lack of alternative providers should issues arise with the current contractor. This could lead to increased costs and potential disruptions to fleet readiness over time.

How does this contract contribute to the overall effectiveness and readiness of the C-17 fleet?

This contract is crucial for maintaining the operational effectiveness and readiness of the C-17 fleet by ensuring the availability of specialized labor for sustainment. However, the lack of competition raises concerns about the long-term cost-effectiveness of this approach, potentially impacting the overall value derived from the investment.

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

Solicitation ID: FA852620R0005

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4060 N LAKEWOOD BLVD, LONG BEACH, CA, 90808

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: $425,047,002

Exercised Options: $425,047,002

Current Obligation: $240,985,204

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852621D0001

IDV Type: IDC

Timeline