DoD awards Boeing $165.5M for C-130 AMP LRIP, raising concerns about competition and value
Contract Overview
Contract Amount: $165,453,692 ($165.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2008-09-30
End Date: 2014-05-30
Contract Duration: 2,068 days
Daily Burn Rate: $80.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: C-130 AMP LRIP LETTER CONTRACT
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $165.5 million to THE BOEING COMPANY for work described as: C-130 AMP LRIP LETTER CONTRACT Key points: 1. The contract awarded to The Boeing Company for C-130 AMP LRIP is a significant expenditure. 2. Lack of competition is a major concern, potentially leading to inflated prices. 3. The firm fixed price contract type offers some cost control, but the absence of competition limits price discovery. 4. The sector is Defense, specifically aircraft parts manufacturing.
Value Assessment
Rating: questionable
The $165.5 million contract value is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to similar aircraft modernization programs.
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 significantly limits price discovery and potentially increases costs for taxpayers.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for this C-130 modernization effort.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The C-130 aircraft is a critical asset for military operations, making its modernization essential. The long duration of the contract (2008-2014) suggests a significant, multi-year investment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award
Positive Signals
- Firm fixed price contract type
Sector Analysis
This contract falls within the Defense sector, specifically related to aircraft parts and auxiliary equipment manufacturing. Spending benchmarks for similar sole-source aircraft modernization programs are difficult to establish without competitive data.
Small Business Impact
The data does not indicate any specific provisions or considerations for small business participation in this contract.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Further oversight would be needed to ensure fair pricing and effective execution given the sole-source nature.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on justification
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ok, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $165.5 million to THE BOEING COMPANY. C-130 AMP LRIP LETTER CONTRACT
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 $165.5 million.
What is the period of performance?
Start: 2008-09-30. End: 2014-05-30.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award is not provided in the data. Typically, such awards are made when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without this information, it's impossible to fully assess the necessity of bypassing competition.
How can the Department of Defense ensure fair pricing on sole-source contracts like this one?
Ensuring fair pricing on sole-source contracts often involves rigorous cost analysis, price negotiation, and independent government cost estimates. Agencies may also require detailed cost breakdowns from the contractor and conduct audits to verify the reasonableness of proposed costs. Benchmarking against historical data or similar commercial items can also provide some reference points.
What is the long-term impact of relying on sole-source contracts for critical defense systems like the C-130 modernization?
A long-term reliance on sole-source contracts can stifle innovation, reduce competition, and potentially lead to higher costs for taxpayers. It can also create vendor lock-in, making it difficult to switch providers or negotiate better terms in the future. This can impact the overall affordability and modernization of critical defense assets.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $176,185,320
Exercised Options: $176,185,320
Current Obligation: $165,453,692
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-09-30
Current End Date: 2014-05-30
Potential End Date: 2014-05-30 00:00:00
Last Modified: 2020-10-05
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