Boeing awarded $147M for aircraft structural component repair, raising value-for-money questions

Contract Overview

Contract Amount: $14,716,360 ($14.7M)

Contractor: Boeing Aerospace Operations, I

Awarding Agency: Department of Defense

Start Date: 2005-01-06

End Date: 2009-01-29

Contract Duration: 1,484 days

Daily Burn Rate: $9.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Defense

Official Description: 200512!150064!1700!M00146!RECEIVING OFFICER !M0014605C9004 !A!N! !N! ! !20050106!20060201!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!00000! !IZ!* !* !IRAQ !+000003919283!N!N!000013977973!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !S1 !SERVICES !000 !* !488190!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!Y!1!001!N!1A!Z!Y!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! !Y!Y!1727!V09167!0001! !

Plain-Language Summary

Department of Defense obligated $14.7 million to BOEING AEROSPACE OPERATIONS, I for work described as: 200512!150064!1700!M00146!RECEIVING OFFICER !M0014605C9004 !A!N! !N! ! !20050106!20060201!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!00000! !IZ!* !* … Key points: 1. Contract awarded without competition, limiting price discovery and potentially increasing costs. 2. Significant duration of contract (over 4 years) suggests a long-term need for these services. 3. The 'Other Support Activities for Air Transportation' category indicates a specialized service area. 4. Contract awarded by the Department of the Navy, part of broader Department of Defense spending. 5. No small business set-aside noted, potentially impacting opportunities for smaller enterprises. 6. The contractor, Boeing Aerospace Operations, is a major defense industry player.

Value Assessment

Rating: questionable

The contract's value of $147 million for aircraft structural component repair warrants scrutiny due to the lack of competitive bidding. Without a competitive process, it's difficult to benchmark the pricing against market rates or other similar contracts. The long duration of the contract (over 4 years) also means that taxpayers are committed to this level of spending for an extended period, making the absence of competition a more significant concern. Further analysis would be needed to determine if the pricing is reasonable given the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one source is capable of providing the required goods or services. However, the lack of competition means that potential alternative providers were not considered, and the government did not benefit from the price reductions that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive price. This limits the government's ability to secure the best possible value for public funds.

Public Impact

The primary beneficiaries are likely military personnel and operations relying on well-maintained aircraft. Services delivered include maintenance and repair of aircraft structural components, ensuring airworthiness. Geographic impact is tied to the deployment locations of the aircraft being serviced, with 'IRAQ' noted as a location. Workforce implications include employment for skilled technicians and engineers at Boeing Aerospace Operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Long contract duration without competition increases long-term cost risk.
Limited transparency into the justification for sole-source award.
Potential for contractor lock-in due to specialized nature of services.

Positive Signals

Contract awarded to a known, established aerospace company.
Services are critical for maintaining operational readiness of aircraft.
Contract duration suggests a stable, ongoing requirement.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance and repair. The market for such specialized services is often dominated by a few large, established players like Boeing due to the high technical expertise and certifications required. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft maintenance services across different branches of the military or even allied nations, though direct comparisons are difficult without knowing the specific aircraft and scope of work.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the available data. The award to a large prime contractor like Boeing suggests that the primary focus was on capability and existing relationships rather than promoting small business participation. This could limit the flow of federal dollars to the small business ecosystem within the aerospace maintenance sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would include performance reviews, adherence to contract terms, and quality control. Transparency is limited by the sole-source nature of the award; the justification for this procurement method would be a key area for review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Operations Support
Department of Defense Aviation Contracts
Logistics and Sustainment Services

Risk Flags

Sole-source award
Lack of competition
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to BOEING AEROSPACE OPERATIONS, I. 200512!150064!1700!M00146!RECEIVING OFFICER !M0014605C9004 !A!N! !N! ! !20050106!20060201!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!00000! !IZ!* !* !IRAQ !+000003919283!N!N!000013977973!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !S1 !SERVICES !000 !* !488190!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is BOEING AEROSPACE OPERATIONS, I.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $14.7 million.

What is the period of performance?

Start: 2005-01-06. End: 2009-01-29.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded on a 'SOLE-SOURCE' basis. While the specific justification is not detailed in the snippet, common reasons for sole-source awards include the existence of only one responsible source, urgent and compelling needs where competition is not feasible, or specific national security requirements. For a contract of this magnitude and duration, the Department of the Navy would typically have a formal justification document (e.g., a Justification and Approval - J&A) outlining why full and open competition was not practicable. Without access to this document, it's impossible to definitively state the reason, but it likely relates to specialized capabilities or existing systems integration that only Boeing could provide at the time of award.

How does the $147 million contract value compare to similar aircraft structural repair contracts?

Directly comparing the $147 million contract value to similar contracts is challenging without more specific details about the scope of work, the type of aircraft, and the duration. However, the value suggests a substantial and long-term requirement for maintenance and repair of aircraft structural components. Contracts of this size are common within the Department of Defense for major platforms. To benchmark effectively, one would need to identify contracts with similar service descriptions (e.g., structural repair, depot-level maintenance) awarded by the Navy or other military branches for comparable aircraft fleets. The lack of competition for this specific award makes external benchmarking even more critical to assess value for money.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of $147 million is the potential for overpayment due to the absence of competitive pressure. Without competing bids, the contractor may not be incentivized to offer the lowest possible price. Other risks include a lack of innovation, as there's less pressure to improve processes or offer new solutions. There's also a risk of contractor lock-in, where the government becomes dependent on a single provider, making future transitions difficult and potentially costly. Furthermore, the lack of transparency inherent in sole-source justifications can raise concerns about fairness and efficiency in public spending.

What is Boeing Aerospace Operations' track record with similar contracts?

Boeing Aerospace Operations, as a subsidiary of The Boeing Company, has an extensive track record in providing a wide range of aerospace services, including maintenance, repair, and overhaul (MRO) for military and commercial aircraft. They are a major defense contractor with deep experience in supporting complex aviation systems for the U.S. military. While specific performance details for this particular $147 million contract are not provided, Boeing's history suggests they possess the technical capabilities and infrastructure required for such work. However, past performance on other contracts, especially sole-source ones, would need to be reviewed to fully assess their reliability and cost-effectiveness in this instance.

What historical spending patterns exist for aircraft structural component repair within the Department of the Navy?

Historical spending patterns for aircraft structural component repair within the Department of the Navy are substantial, reflecting the significant investment required to maintain a large and complex air fleet. The Navy procures billions of dollars worth of aviation maintenance and repair services annually. This includes everything from routine servicing to major structural overhauls. Spending can fluctuate based on fleet readiness requirements, modernization programs, and the introduction of new aircraft types. Analyzing historical data would reveal trends in contract types (competitive vs. sole-source), average contract values, and key service providers. This specific $147 million contract represents one component of that broader spending picture.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

Address: 2601 LIBERTY PKWY, MIDWEST CITY, OK, 04

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline