DoD awards $154M for aircraft structural component repair, with Boeing as prime contractor

Contract Overview

Contract Amount: $154,368,160 ($154.4M)

Contractor: Boeing Aerospace Operations, I

Awarding Agency: Department of Defense

Start Date: 2001-02-14

End Date: 2010-09-30

Contract Duration: 3,515 days

Daily Burn Rate: $43.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200109!001065!1700!AT729 !NAVAL AIR SYSTEMS COMMAND !N0001901C0110 !A!N!*!N! !20010214!20020213!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!24100!001!32!FALLON !CHURCHILL !NEVADA !+000016652011!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1A!AIRFRAMES AND SPARES !2AFE!F-5 FREEDOM FIGHTER !336411!*!*!3! ! ! !*!*!*!B!*!*!A! !A !N!J!2!004!B! !C!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $154.4 million to BOEING AEROSPACE OPERATIONS, I for work described as: 200109!001065!1700!AT729 !NAVAL AIR SYSTEMS COMMAND !N0001901C0110 !A!N!*!N! !20010214!20020213!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!24100!001!32!FALLON !CHURC… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm fixed price, which shifts cost risk to the contractor. 3. The duration of the contract is substantial, spanning over 3500 days. 4. The primary service involves maintenance and repair of aircraft structural components. 5. The contractor, Boeing Aerospace Operations, Inc., has a significant presence in the aerospace sector. 6. The award value is over $154 million, indicating a substantial investment in aircraft sustainment.

Value Assessment

Rating: good

The award value of $154,368,159.60 for aircraft structural component maintenance and repair appears reasonable given the contract's extensive duration of over 3500 days. Benchmarking against similar long-term sustainment contracts for complex aerospace systems is necessary for a definitive value assessment. However, the firm fixed-price nature of the contract suggests that the contractor bears the primary financial risk for cost overruns, which can be a positive indicator for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a healthy level of competition for this requirement. A competitive environment generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the funds expended on aircraft sustainment.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other Department of Defense branches requiring maintenance for specific aircraft structural components. Services delivered include the maintenance and repair of aircraft structural components, ensuring operational readiness. The geographic impact is centered around the contractor's facilities in Midwest City, Oklahoma, and potentially other locations where aircraft are serviced. Workforce implications include employment opportunities for skilled technicians and support staff at Boeing Aerospace Operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential scope creep or evolving maintenance needs not fully captured in initial pricing.
Reliance on a single prime contractor for a significant period may limit flexibility in adopting new technologies or repair methods.
Firm fixed-price contracts can sometimes incentivize contractors to cut corners on quality if not rigorously overseen.

Positive Signals

Full and open competition suggests a robust process for selecting the most capable and cost-effective provider.
The firm fixed-price contract structure transfers significant cost risk to the contractor.
The substantial award value indicates a critical need for these services, suggesting strong program support.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft sustainment and maintenance. The market for aircraft repair and overhaul services is substantial, driven by the continuous need to maintain aging fleets and ensure operational readiness. This contract represents a significant portion of spending dedicated to keeping specific aircraft platforms airworthy, fitting within the larger ecosystem of defense industrial base services.

Small Business Impact

While this contract was awarded to a large prime contractor, Boeing Aerospace Operations, Inc., there is potential for significant subcontracting opportunities for small businesses within the aerospace supply chain. The analysis does not explicitly detail small business set-aside goals or performance, but the nature of aircraft component repair often involves specialized suppliers, many of whom are small businesses. Further investigation into subcontracting plans would clarify the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms, quality standards, and delivery schedules. Accountability measures are inherent in the firm fixed-price structure, where the contractor is financially responsible for meeting performance requirements. Transparency is facilitated through contract award databases, though detailed performance metrics may be less publicly accessible.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Component Manufacturing
Defense Logistics and Sustainment
Airframe Overhaul Services
Naval Aviation Support Contracts

Risk Flags

Long contract duration may require periodic reviews to ensure continued relevance and cost-effectiveness.
Potential for technological advancements impacting repair methods over the contract's lifespan.
Firm fixed-price nature requires robust contractor performance monitoring to ensure quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $154.4 million to BOEING AEROSPACE OPERATIONS, I. 200109!001065!1700!AT729 !NAVAL AIR SYSTEMS COMMAND !N0001901C0110 !A!N!*!N! !20010214!20020213!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!24100!001!32!FALLON !CHURCHILL !NEVADA !+000016652011!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1A!AIRFRAMES AND SPARES !2AFE!F-5 FREEDOM FIGHTER !336411!*!*!3! ! ! !*!*!*!B!*!*!A!

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $154.4 million.

What is the period of performance?

Start: 2001-02-14. End: 2010-09-30.

What is the historical spending trend for aircraft structural component maintenance and repair by the Naval Air Systems Command?

Analyzing historical spending trends for aircraft structural component maintenance and repair by the Naval Air Systems Command (NAVAIR) requires examining contract awards over multiple fiscal years. While this specific contract award of $154M is a significant data point, a comprehensive trend analysis would involve aggregating data on similar contracts, including their values, durations, and the specific aircraft platforms supported. Generally, spending in this category fluctuates based on fleet age, operational tempo, and modernization programs. Periods of high operational tempo or the aging of major aircraft platforms often correlate with increased spending on maintenance and repair. NAVAIR's budget allocation for sustainment is a critical factor, and shifts in strategic priorities or funding levels can directly impact the volume and value of such contracts awarded.

How does the per-unit cost of repair for structural components compare to industry benchmarks for similar aircraft?

Determining the precise per-unit cost of repair for structural components under this contract is challenging without detailed task orders and specific repair itemization. The contract's value of $154M over its extended duration suggests an average annual spend, but this does not equate to a per-unit cost. To benchmark effectively, one would need to identify specific components repaired, the nature of the repairs (e.g., minor patching vs. major structural replacement), and the labor/material costs associated with each. Industry benchmarks for aircraft component repair vary widely based on the complexity of the component, the aircraft type (e.g., fighter jet vs. transport aircraft), and the specific repair techniques employed. Comparing this contract's implied average cost to industry averages would require a granular breakdown of services rendered, which is typically not available in high-level contract award data.

What is Boeing Aerospace Operations, Inc.'s track record with similar sustainment contracts for the Department of Defense?

Boeing Aerospace Operations, Inc. has a substantial track record with the Department of Defense, particularly in areas of aircraft manufacturing, sustainment, and support services. As a major aerospace prime contractor, Boeing routinely manages large, complex contracts involving maintenance, repair, and overhaul (MRO) for various military platforms. Their experience likely encompasses a wide range of aircraft types and sustainment requirements, including structural repairs. Evaluating their specific performance on similar contracts would involve reviewing past performance evaluations, any documented issues or successes, and their history of meeting delivery schedules and quality standards. Given Boeing's scale and long-standing relationship with the DoD, it is probable they possess extensive experience relevant to this contract's scope.

What are the key performance indicators (KPIs) used to measure the success of this aircraft structural component repair contract?

Key Performance Indicators (KPIs) for an aircraft structural component repair contract typically focus on ensuring aircraft availability, safety, and cost-effectiveness. Common KPIs would likely include: Turnaround Time (TAT) for repairs, ensuring components are returned to service within specified deadlines; Quality Acceptance Rate, measuring the percentage of repairs that meet all specifications without defects; Aircraft Availability/Mission Capable Rates, reflecting the impact of timely repairs on overall fleet readiness; and Cost Performance, monitoring expenditures against budgeted amounts, especially relevant under a firm fixed-price contract. Adherence to safety protocols and compliance with technical orders are also critical, though often measured through audits and inspections rather than direct quantitative KPIs.

Are there any identified risks associated with the long duration of this contract and potential technological obsolescence?

The long duration of this contract (over 3500 days) presents several potential risks, including technological obsolescence and evolving maintenance requirements. As aircraft platforms age and new technologies emerge, the methods and materials used for structural repair may become outdated. There's a risk that the contract's scope might not adequately account for advancements in repair techniques or materials that could offer improved performance or cost savings. Furthermore, long-term contracts can sometimes lead to a degree of complacency or reduced incentive for innovation if not structured with appropriate review and adjustment mechanisms. Managing this risk would involve periodic reviews of the contract's technical requirements and potentially incorporating clauses for incorporating new technologies or adapting repair methodologies as needed.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2601 LIBERTY PKWY, MIDWEST CITY, OK, 73110

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $155,080,309

Exercised Options: $155,080,309

Current Obligation: $154,368,160

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline