Boeing's $69M CSEL contract shows potential value concerns amid limited competition
Contract Overview
Contract Amount: $69,053,024 ($69.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2014-01-01
End Date: 2017-12-31
Contract Duration: 1,460 days
Daily Burn Rate: $47.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT FOR THE COMBAT SURVIVOR EVADER LOCATOR (CSEL) SYSTEM
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $69.1 million to THE BOEING COMPANY for work described as: IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT FOR THE COMBAT SURVIVOR EVADER LOCATOR (CSEL) SYSTEM Key points: 1. Contract awarded to a single bidder, raising questions about price discovery. 2. Limited competition may have led to above-market pricing. 3. Contract duration of four years suggests a need for ongoing performance monitoring. 4. Firm-fixed-price structure shifts risk to the contractor. 5. The contract falls within the 'Other Aircraft Parts' manufacturing NAICS code. 6. Boeing's extensive experience in aerospace may justify its selection, but price competitiveness needs scrutiny.
Value Assessment
Rating: fair
The total award of $69 million over four years for contractor logistics support of the CSEL system warrants careful review. Benchmarking against similar logistics support contracts for complex defense systems is challenging without more granular data on the specific services provided. However, the lack of robust competition suggests that the pricing may not have been optimized, potentially leading to a fair-to-questionable value proposition for taxpayers. The firm-fixed-price nature of the contract, while beneficial for budget predictability, means that any inefficiencies or cost overruns by the contractor are absorbed by the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'full and open competition,' but the data indicates only one bid was received. This suggests that while the opportunity was broadly advertised, only one entity, The Boeing Company, was either capable or willing to submit a proposal. This lack of multiple bidders significantly limits the government's ability to leverage competitive pressures to secure the best possible pricing and terms. It raises concerns about whether the solicitation effectively reached all potential offerors or if barriers to entry were too high.
Taxpayer Impact: A single bid environment means taxpayers may not have received the most cost-effective solution. The absence of competing offers prevents a clear understanding of the market rate for these specialized logistics services, potentially leading to overpayment.
Public Impact
Personnel involved in the Combat Survivor Evader Locator (CSEL) system will benefit from continued operational support. The contract ensures the availability of critical logistics services for a defense system. The geographic impact is primarily tied to the locations where CSEL systems are deployed and maintained, likely worldwide for deployed military personnel. Workforce implications include the potential for continued employment for specialized logistics and maintenance personnel within The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may have resulted in suboptimal pricing.
- Lack of multiple bids hinders price discovery and taxpayer value.
- The specific nature of CSEL system support might create high barriers to entry for competitors.
Positive Signals
- Boeing is a well-established aerospace and defense contractor with significant experience.
- Firm-fixed-price contract shifts performance risk to the contractor.
- The contract supports a critical defense system, ensuring operational readiness.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing, as indicated by NAICS code 336413. This sector is characterized by high technological complexity, stringent quality requirements, and often long product lifecycles. Spending in this area is driven by defense procurement needs. Comparable spending benchmarks would involve analyzing other logistics support contracts for specialized defense equipment, where pricing can vary significantly based on system complexity and required service levels.
Small Business Impact
The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). Given the specialized nature of contractor logistics support for a defense system like CSEL, it is unlikely that small businesses would be primary bidders for the prime contract. However, there may be opportunities for small businesses to participate as subcontractors to The Boeing Company, depending on Boeing's subcontracting strategy and the specific components or services required.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the firm-fixed-price contract terms, requiring Boeing to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed performance metrics and cost breakdowns may not always be publicly available.
Related Government Programs
- Combat Survivor Evader Locator (CSEL) System
- Defense Logistics Support Contracts
- Aerospace Manufacturing Contracts
- Aircraft Parts Manufacturing
Risk Flags
- Limited Competition
- Potential for Above-Market Pricing
- Need for Detailed Performance Monitoring
Tags
defense, department-of-defense, dcma, the-boeing-company, definitive-contract, firm-fixed-price, full-and-open-competition, logistics-support, aircraft-parts-manufacturing, california, csel
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.1 million to THE BOEING COMPANY. IGF::OT::IGF CONTRACTOR LOGISTICS SUPPORT FOR THE COMBAT SURVIVOR EVADER LOCATOR (CSEL) SYSTEM
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 $69.1 million.
What is the period of performance?
Start: 2014-01-01. End: 2017-12-31.
What is the specific nature of the 'Contractor Logistics Support' provided under this award?
The 'Contractor Logistics Support' for the Combat Survivor Evader Locator (CSEL) system likely encompasses a range of services essential for maintaining the operational readiness and functionality of the CSEL equipment. This typically includes maintenance, repair, overhaul, spare parts management, technical data provision, and potentially training for military personnel. The CSEL system itself is designed to aid in the recovery of downed aircrew or isolated personnel, making its reliable functioning critical for personnel safety and mission success. The specific scope would be detailed in the contract's Statement of Work (SOW), outlining deliverables, performance standards, and reporting requirements.
How does the $69 million award compare to historical spending on CSEL logistics support?
To accurately compare the $69 million award to historical spending on CSEL logistics support, one would need access to historical contract data for this specific system. This would involve searching contract databases for previous awards related to CSEL maintenance, repair, and logistics, potentially from different contractors or under different contract vehicles. Factors such as inflation, changes in system configuration or quantity, and evolving support requirements would need to be considered for a meaningful comparison. Without this historical context, it is difficult to ascertain if this award represents an increase, decrease, or stable level of investment in CSEL logistics.
What are the key performance indicators (KPIs) used to evaluate Boeing's performance on this contract?
Key Performance Indicators (KPIs) for a contract like this typically focus on ensuring the operational availability and reliability of the CSEL system. Common KPIs might include: Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR), On-Time Delivery of Spare Parts, Responsiveness to Service Requests, and Accuracy of Technical Documentation. The contract's Statement of Work (SOW) would explicitly define these KPIs, along with acceptable performance thresholds and any associated incentive or penalty clauses. The Defense Contract Management Agency (DCMA) would likely monitor these KPIs to assess contractor performance.
What is Boeing's track record with similar government logistics support contracts?
The Boeing Company has an extensive and well-documented track record of providing complex logistics support and sustainment services for a wide array of government and military platforms, including aircraft, spacecraft, and other defense systems. They are a major defense contractor with significant experience in managing supply chains, maintenance operations, and technical support for sophisticated equipment. Their history includes numerous large-scale sustainment contracts for various military branches. While specific performance details for each contract vary, Boeing's overall experience suggests a capability to handle demanding logistics requirements, though the value and efficiency of their services on any given contract would still be subject to competitive pressures and oversight.
Are there any identified risks associated with The Boeing Company as the contractor for this CSEL support?
Risks associated with The Boeing Company as a contractor are generally assessed based on their overall financial health, past performance on similar contracts, and the specific complexities of the current requirement. As a large, established corporation, Boeing typically presents a lower risk of contractor default compared to smaller firms. However, potential risks could include performance issues related to specific technical challenges of the CSEL system, potential cost overruns if the firm-fixed-price contract proves insufficient for unforeseen issues (though this risk is primarily borne by the contractor), or potential delays in service delivery. Past performance reviews and ongoing contract management by agencies like DCMA are crucial for mitigating these risks.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647
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: $94,578,351
Exercised Options: $69,265,429
Current Obligation: $69,053,024
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-01-01
Current End Date: 2017-12-31
Potential End Date: 2018-04-25 00:00:00
Last Modified: 2025-04-22
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