DoD's $12.5M Boeing Contract for Aircraft Manufacturing: Over and Above Spending Raises Concerns
Contract Overview
Contract Amount: $12,490,425 ($12.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2019-05-30
End Date: 2023-11-30
Contract Duration: 1,645 days
Daily Burn Rate: $7.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: OVER AND ABOVE (O&A)
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $12.5 million to THE BOEING COMPANY for work described as: OVER AND ABOVE (O&A) Key points: 1. Significant spending on 'Over and Above' modifications suggests potential scope creep or unforeseen issues. 2. Sole-source nature of the contract limits competitive pricing and transparency. 3. High value contract with Boeing, a major defense contractor, warrants close scrutiny. 4. Aircraft manufacturing sector is complex, making cost comparisons challenging but essential.
Value Assessment
Rating: questionable
The 'Over and Above' designation indicates spending beyond the original contract scope. Without detailed justification and comparison to similar modification costs, it's difficult to assess if this pricing is reasonable. Benchmarking against industry standards for aircraft modifications is crucial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning pricing was determined through negotiation with a single vendor, The Boeing Company. This lack of competition can lead to higher prices and reduced incentive for cost efficiency.
Taxpayer Impact: The absence of competition for a significant contract value raises concerns about potential overpayment by taxpayers.
Public Impact
Taxpayers may be paying premium prices due to lack of competition. The 'Over and Above' spending could indicate issues with initial contract planning or execution. Transparency in how these additional funds were justified and allocated is limited.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Over and Above spending
- Lack of competition
- Potential for cost overruns
Positive Signals
- Contract awarded to a major, experienced defense contractor
- Firm Fixed Price contract type can limit cost risk if scope is well-defined
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical but often complex area of defense spending. Benchmarks for modifications can vary widely based on the aircraft type and the nature of the work, making direct comparisons difficult without specific details.
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 'Over and Above' designation suggests that the initial contract scope may have been insufficient or that significant changes occurred during performance. Robust oversight is needed to ensure these additional costs are justified and that future contracts are better scoped.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Significant 'Over and Above' spending
- Lack of transparency in cost justification
- Potential for uncompetitive pricing
- Contract duration and value
Tags
aircraft-manufacturing, department-of-defense, wa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.5 million to THE BOEING COMPANY. OVER AND ABOVE (O&A)
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 $12.5 million.
What is the period of performance?
Start: 2019-05-30. End: 2023-11-30.
What specific justification was provided for the 'Over and Above' spending, and how does it compare to typical modification costs for similar aircraft?
The provided data does not include the specific justification for the 'Over and Above' (O&A) spending. Typically, O&A funds are used for unforeseen work not included in the original contract. A thorough review would require access to the contract modifications, technical assessments, and cost proposals to determine if the pricing is reasonable compared to industry benchmarks and the complexity of the modifications.
What are the primary risks associated with awarding a sole-source contract of this magnitude in the aircraft manufacturing sector?
The primary risks of a sole-source contract include inflated pricing due to lack of competition, reduced incentive for the contractor to innovate or control costs, and potential for vendor lock-in. In aircraft manufacturing, this could mean taxpayers bear a higher cost for essential upgrades or maintenance, and the government has limited leverage if performance issues arise.
How effectively does the 'Firm Fixed Price' contract type mitigate risk given the 'Over and Above' spending designation?
A Firm Fixed Price (FFP) contract is intended to provide cost certainty. However, the 'Over and Above' spending indicates that the original scope, which the FFP was based on, was insufficient. While the FFP protects against cost increases within the defined scope, the O&A spending itself represents an uncontrolled cost increase, potentially negating the intended risk mitigation if not rigorously managed and justified.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
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: $12,490,425
Exercised Options: $12,490,425
Current Obligation: $12,490,425
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $228,230
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA860919D0007
IDV Type: IDC
Timeline
Start Date: 2019-05-30
Current End Date: 2023-11-30
Potential End Date: 2023-11-30 00:00:00
Last Modified: 2026-01-05
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