DoD's $14.8M Boeing Contract for Aircraft Manufacturing: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $14,798,266 ($14.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-09-30
End Date: 2026-09-30
Contract Duration: 1,096 days
Daily Burn Rate: $13.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY23 MATERIAL IMPROVEMENT PROGRAM MATERIAL
Place of Performance
Location: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90808
Plain-Language Summary
Department of Defense obligated $14.8 million to THE BOEING COMPANY for work described as: FY23 MATERIAL IMPROVEMENT PROGRAM MATERIAL Key points: 1. Significant contract value of $14.8 million awarded to a major defense contractor. 2. Sole-source award raises questions about price discovery and potential for overpayment. 3. Long contract duration (1096 days) requires ongoing oversight for performance and cost control. 4. Focus on Aircraft Manufacturing within the Defense sector, a critical area for national security.
Value Assessment
Rating: questionable
The contract's firm fixed price structure provides some cost certainty. However, without competitive bidding, it's difficult to benchmark the pricing against similar contracts to ensure optimal value for taxpayer dollars.
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 the government's ability to leverage market forces to achieve the best possible price and terms.
Taxpayer Impact: The absence of competition may lead to higher costs for taxpayers compared to a scenario where multiple vendors vied for the contract.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The long-term nature of the contract necessitates vigilant monitoring by the Air Force. Dependence on a single contractor for critical aircraft manufacturing components could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for inflated pricing
- Long contract duration
Positive Signals
- Firm fixed price contract type
- Awarded to a known, established contractor
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a key component of the Defense industry. Spending in this area is substantial, and ensuring competitive pricing is crucial for efficient allocation of defense budgets.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The long duration of this contract requires robust oversight from the Department of the Air Force to ensure performance standards are met and costs remain justified throughout its lifecycle. Regular performance reviews and audits are essential.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Lack of transparency in justification for sole-sourcing
- Potential for overpayment due to lack of competition
- Long contract duration increases risk exposure
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.8 million to THE BOEING COMPANY. FY23 MATERIAL IMPROVEMENT PROGRAM MATERIAL
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 $14.8 million.
What is the period of performance?
Start: 2023-09-30. End: 2026-09-30.
What specific justification was provided for awarding this contract on a sole-source basis, and how does it align with federal procurement regulations for non-competitive awards?
The provided data does not include the specific justification for the sole-source award. Federal regulations typically require detailed documentation for sole-source contracts, such as the unavailability of a comparable product from another source or urgent and compelling circumstances. Without this justification, it's difficult to assess the necessity and appropriateness of bypassing the competitive bidding process.
How will the Department of Defense ensure cost reasonableness and value for money throughout the 1096-day contract period, given the absence of competitive pricing benchmarks?
Despite the sole-source nature, the DoD can employ several strategies to ensure cost reasonableness. This includes conducting thorough cost analyses, negotiating profit margins, establishing clear performance metrics tied to payment, and potentially incorporating economic price adjustment clauses if market volatility is a significant concern. Regular performance reviews and audits will be critical.
What are the potential risks associated with a long-term, sole-source contract for critical aircraft manufacturing, and what mitigation strategies are in place?
Risks include potential price escalation over time, reduced incentive for the contractor to innovate or improve efficiency, and vulnerability to supply chain disruptions if Boeing faces issues. Mitigation strategies could involve strong contract management, performance-based incentives, clear termination clauses, and potentially exploring alternative sources for future procurements once the current contract expires.
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: FA852622R0009
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: $14,798,266
Exercised Options: $14,798,266
Current Obligation: $14,798,266
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $591,197
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: 2023-09-30
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-12-11
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