Boeing awarded $91.6M for organizational and intermediate support of NAMP and Kuwait by the Air Force
Contract Overview
Contract Amount: $91,601,171 ($91.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-10-01
End Date: 2024-09-30
Contract Duration: 1,095 days
Daily Burn Rate: $83.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: ORGANIZATIONAL AND INTERMEDIATE (O&I) SUPPORT FOR NAMP AND KUWAIT.
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $91.6 million to THE BOEING COMPANY for work described as: ORGANIZATIONAL AND INTERMEDIATE (O&I) SUPPORT FOR NAMP AND KUWAIT. Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Fixed-price incentive contract type suggests shared risk between government and contractor. 3. Long-term duration of 1095 days indicates a significant, ongoing requirement. 4. Support for NAMP and Kuwait points to critical operational needs in a specific geographic region. 5. The contract's value places it in the mid-to-large range for defense support services. 6. No small business set-aside indicates potential for large prime contractor involvement.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards. The fixed-price incentive structure aims to control costs, but the absence of competition inherently reduces the government's leverage in price negotiation. The $91.6 million award over three years suggests a substantial but not extraordinary per-year cost for specialized support services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means that the government did not benefit from a bidding process that could drive down prices through market forces.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive pricing.
Public Impact
The U.S. Air Force benefits from essential organizational and intermediate support for its operations in Kuwait. This contract ensures the continuity of critical functions related to the NAMP (Naval Aviation Maintenance Program) and support activities in the specified region. The geographic impact is concentrated in Kuwait, supporting U.S. military presence and operations there. Workforce implications may include direct employment by Boeing and potential indirect employment through subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing, potentially increasing costs.
- Lack of transparency in sole-source justification requires careful review.
- Long-term contract duration may reduce flexibility to adapt to changing needs.
Positive Signals
- Fixed-price incentive contract type aligns contractor and government interests in cost control.
- Award to a large, established defense contractor like Boeing suggests a high level of trust and capability.
- Specific support for NAMP and Kuwait indicates a critical, well-defined operational requirement.
Sector Analysis
This contract falls within the broader aerospace and defense sector, specifically focusing on support services for military aviation operations. The market for such specialized support is often dominated by a few large, experienced contractors due to the technical expertise and security clearances required. Comparable spending benchmarks would typically involve other long-term, sole-source support contracts for deployed military assets.
Small Business Impact
The absence of a small business set-aside on this contract indicates that it was not specifically targeted for small business participation. This suggests that the prime contractor, The Boeing Company, is expected to perform the majority of the work. While large prime contractors often utilize small business subcontractors, the direct award to Boeing means that opportunities for direct prime contracting with small businesses are limited in this instance.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded within the fixed-price incentive contract terms, which link contractor profit to performance and cost targets. Transparency is generally lower for sole-source awards compared to competed contracts, but contract details and performance reports should be accessible through federal procurement databases.
Related Government Programs
- Defense Logistics Support
- Aircraft Maintenance and Repair
- Foreign Military Support
- Aerospace Engineering Services
Risk Flags
- Sole-source award may indicate limited competition.
- Lack of specific performance metrics in summary data.
- Geographic concentration of support in Kuwait.
Tags
defense, air-force, sole-source, fixed-price-incentive, organizational-support, intermediate-support, kuwait, aircraft-maintenance, large-contract, dod, middle-east
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $91.6 million to THE BOEING COMPANY. ORGANIZATIONAL AND INTERMEDIATE (O&I) SUPPORT FOR NAMP AND KUWAIT.
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 $91.6 million.
What is the period of performance?
Start: 2021-10-01. End: 2024-09-30.
What is the specific nature of the 'organizational and intermediate support' provided under this contract?
The contract data indicates 'ORGANIZATIONAL AND INTERMEDIATE (O&I) SUPPORT FOR NAMP AND KUWAIT.' While the specific details are not fully elaborated in the provided data, O&I support typically encompasses a range of services essential for the operational readiness and maintenance of military assets. This could include logistical planning, supply chain management, technical assistance, personnel support, and administrative functions necessary to sustain programs like the Naval Aviation Maintenance Program (NAMP) in a deployed environment like Kuwait. The 'intermediate' aspect suggests support beyond basic organizational functions, potentially involving more complex maintenance or sustainment activities.
Why was this contract awarded on a sole-source basis instead of being competed?
Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supply or service. For this contract, the justification for a sole-source award to The Boeing Company likely stems from unique capabilities, proprietary technology, extensive prior experience with the specific systems or operations in Kuwait, or critical security requirements that only Boeing can meet. Without the specific justification documentation, it's presumed that the Air Force determined that competition was not feasible or not in the government's best interest at the time of award.
How does the 'Fixed Price Incentive' (FPI) contract type aim to manage costs and performance?
A Fixed Price Incentive (FPI) contract is designed to share the risks and rewards between the government and the contractor. It establishes an initial target cost, target profit, and target price. The final price is determined after performance is completed based on a formula that adjusts profit and cost. If the final cost is below the target cost, both the government and contractor share in the savings (up to a ceiling price). Conversely, if the final cost exceeds the target cost, the contractor bears a larger portion of the overrun until a ceiling price is reached. This structure incentivizes the contractor to control costs while meeting performance objectives.
What are the potential risks associated with a sole-source contract of this magnitude and duration?
The primary risk with a sole-source contract of this magnitude ($91.6 million) and duration (three years) is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not be securing the best possible value. Additionally, there's a risk of contractor complacency or reduced innovation over the contract's life. The government also has less flexibility to switch providers if performance issues arise or if market conditions change, potentially locking into a less optimal solution for an extended period.
How does this contract fit into the broader context of U.S. Air Force operations in the Middle East?
This contract directly supports U.S. Air Force operations in Kuwait, a key strategic location in the Middle East. The 'organizational and intermediate support for NAMP' suggests a role in maintaining the readiness and operational capability of U.S. Air Force aircraft and associated personnel deployed in or operating through the region. Such support is critical for sustaining ongoing military missions, power projection, and regional stability efforts. The long-term nature of the contract indicates a sustained U.S. commitment to operations in this area.
What is the historical spending trend for similar organizational and intermediate support contracts by the Department of Defense?
Analyzing historical spending trends for 'organizational and intermediate support' requires access to detailed contract databases and specific categorization. However, generally, the Department of Defense (DoD) consistently allocates significant portions of its budget to sustainment, logistics, and operational support services for its global presence. Spending in this category often correlates with geopolitical conditions, deployment levels, and the modernization of military assets. Contracts for specialized support, especially sole-source awards to major defense contractors, can represent substantial, multi-year commitments reflecting the ongoing need for robust operational capabilities.
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: FIXED PRICE INCENTIVE (L)
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: $91,601,171
Exercised Options: $91,601,171
Current Obligation: $91,601,171
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
Start Date: 2021-10-01
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-04-26
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