DoD's $25M Boeing R&D Contract for AAR PHASE II INTEGRATOR Raises Questions on Value and Competition
Contract Overview
Contract Amount: $25,006,448 ($25.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2008-11-19
End Date: 2013-02-19
Contract Duration: 1,553 days
Daily Burn Rate: $16.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: AAR PHASE II INTEGRATOR
Place of Performance
Location: HAZELWOOD, SAINT LOUIS County, MISSOURI, 63042
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $25.0 million to THE BOEING COMPANY for work described as: AAR PHASE II INTEGRATOR Key points: 1. Significant R&D investment with Boeing, a major defense contractor. 2. Full and open competition was cited, but the specific impact on price is unclear. 3. Contract duration of over 4 years suggests a complex project. 4. Potential for cost overruns given the Cost Plus Fixed Fee structure.
Value Assessment
Rating: questionable
The contract value of $25M over 4 years for R&D is substantial. Without specific deliverables or performance metrics, assessing value for money is difficult. Benchmarking against similar R&D contracts in the aerospace sector would be necessary for a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which theoretically allows for the best pricing. However, the specific details of the bidding process and the number of bidders are not provided, making it hard to gauge the effectiveness of price discovery.
Taxpayer Impact: The $25M expenditure represents taxpayer funds allocated to defense research. While R&D can yield long-term benefits, the immediate taxpayer impact is the direct cost of the contract.
Public Impact
Taxpayers fund advanced defense research and development. Potential for technological advancements that could enhance national security. Boeing, a large aerospace company, benefits from this government contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure can incentivize cost overruns.
- Lack of specific performance metrics makes value assessment difficult.
- Long contract duration increases risk of scope creep or changing requirements.
Positive Signals
- Awarded under full and open competition.
- Supports R&D in a critical defense sector.
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Defense R&D spending is a significant portion of the federal budget, often characterized by long development cycles and high costs, with varying degrees of success in translating research into deployable technologies.
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, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
Oversight would typically be managed by the Department of Defense's contract management agencies. The effectiveness of this oversight in ensuring cost control and performance against the Cost Plus Fixed Fee structure is not detailed in the provided information.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Fixed Fee structure can lead to cost overruns.
- Lack of detailed performance metrics hinders value assessment.
- Long contract duration increases risk.
- Limited visibility into the competitive bidding process.
- Potential for contractor to prioritize profit over efficiency.
Tags
research-and-development-in-the-physical, department-of-defense, mo, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.0 million to THE BOEING COMPANY. AAR PHASE II INTEGRATOR
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 $25.0 million.
What is the period of performance?
Start: 2008-11-19. End: 2013-02-19.
What specific research objectives and expected outcomes were defined for this $25M contract to justify the investment?
The provided data lacks specific details on the research objectives and expected outcomes for the AAR PHASE II INTEGRATOR contract. A thorough review of the contract's statement of work and performance metrics would be necessary to determine if the $25M investment was justified by clearly defined, achievable goals and potential technological advancements.
How did the 'full and open competition' process ensure the most cost-effective solution was selected for this complex R&D project?
While 'full and open competition' suggests multiple bidders could participate, the provided data does not detail the number of bids received or the evaluation criteria used. To assess cost-effectiveness, one would need to examine the competitive landscape, the technical proposals submitted, and the final negotiated price against the scope of work.
What mechanisms are in place to monitor and control costs under the Cost Plus Fixed Fee (CPFF) structure for this long-term R&D contract?
CPFF contracts carry inherent risks of cost escalation. Effective oversight for this contract would involve rigorous monitoring of Boeing's incurred costs, regular audits, and strict adherence to the fixed fee. The Department of Defense's contract management team would be responsible for ensuring that costs remain reasonable and that the contractor does not excessively inflate expenses to maximize profit.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $25,114,599
Exercised Options: $25,114,599
Current Obligation: $25,006,448
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-11-19
Current End Date: 2013-02-19
Potential End Date: 2013-02-19 00:00:00
Last Modified: 2016-08-19
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