Boeing awarded $128.9M contract for defense logistics support, spanning over 8 years
Contract Overview
Contract Amount: $128,946,551 ($128.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2002-10-01
End Date: 2010-07-20
Contract Duration: 2,849 days
Daily Burn Rate: $45.3K/day
Sector: Defense
Place of Performance
Location: Missouri, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $128.9 million to THE BOEING COMPANY for work described as: Key points: 1. Contract value suggests significant long-term commitment to logistics services. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Long duration indicates a need for stable, ongoing support for defense operations. 4. Performance period spans a substantial timeframe, requiring robust contractor management. 5. The contract's focus on logistics is critical for maintaining military readiness. 6. Boeing's established role in defense contracting suggests familiarity with requirements.
Value Assessment
Rating: fair
The contract value of $128.9 million over nearly 8 years averages to approximately $16.1 million annually. Without specific deliverables or performance metrics, a direct value-for-money assessment is challenging. However, given the sole-source nature, it's difficult to benchmark against competitive bids. The duration suggests a potentially stable, albeit uncompeted, pricing structure. Further analysis would require understanding the scope of services provided and comparing them to industry standards for similar logistics support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was considered. This approach is typically used when a specific capability is required that only one contractor can provide, or in situations where competition is deemed not feasible or not in the government's best interest. The lack of competition limits price discovery and may result in higher costs compared to a fully competed contract.
Taxpayer Impact: Sole-source awards can mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding processes. This necessitates strong government oversight to ensure fair pricing and effective service delivery.
Public Impact
The primary beneficiaries are the Department of Defense units relying on the contracted logistics services. Services delivered likely include supply chain management, transportation, maintenance, and warehousing. Geographic impact is likely widespread, supporting military operations globally. Workforce implications include potential job creation within Boeing and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
- Long contract duration requires sustained government oversight to ensure performance and prevent complacency.
- Lack of transparency in the sole-source justification could obscure potential alternatives.
- Dependence on a single contractor for critical logistics functions poses a risk if performance falters.
Positive Signals
- Boeing's extensive experience in defense contracting suggests a high likelihood of meeting performance requirements.
- A long-term contract can foster stability and predictability in essential logistics support.
- The significant value indicates a critical need being met by the award.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically supporting the complex logistics requirements of military operations. The defense logistics market is substantial, characterized by long-term contracts and a mix of large prime contractors and specialized subcontractors. Boeing, as a major defense contractor, is well-positioned to provide these services, leveraging its existing infrastructure and expertise. Comparable spending benchmarks would typically involve analyzing other large-scale, long-duration logistics support contracts awarded by the DoD.
Small Business Impact
Information regarding small business set-asides or subcontracting plans for this sole-source award is not provided in the available data. Typically, sole-source contracts may have less emphasis on small business participation compared to competed contracts. However, large prime contractors like Boeing often have established subcontracting programs that may include small businesses, depending on the specific nature of the services required.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures would be defined in the contract's performance work statement (PWS) and include monitoring of delivery schedules, quality standards, and financial reporting. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases.
Related Government Programs
- Defense Logistics Agency (DLA) contracts
- Military Sealift Command contracts
- Air Force sustainment contracts
- Naval supply chain management contracts
Risk Flags
- Sole-source award
- Long contract duration
- Lack of detailed service scope in summary data
Tags
defense, department-of-defense, logistics, contract-award, sole-source, the-boeing-company, long-term, support-services, procurement, federal-spending
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $128.9 million to THE BOEING COMPANY. See the official description on USAspending.
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 $128.9 million.
What is the period of performance?
Start: 2002-10-01. End: 2010-07-20.
What specific logistics services are encompassed by this $128.9 million contract?
The provided data does not detail the specific logistics services covered under this contract. However, given the contractor (The Boeing Company) and the awarding agency (Department of Defense), these services likely include a broad range of support functions critical to military operations. This could encompass supply chain management, inventory control, warehousing, transportation coordination, maintenance support, and potentially technical assistance for defense equipment. The duration of the contract (over 8 years) suggests a comprehensive and ongoing need for these services, rather than a short-term or project-specific requirement. Further details would typically be found in the contract's Performance Work Statement (PWS).
How does the $128.9 million value compare to similar defense logistics contracts awarded by the DoD?
The $128.9 million contract value, spread over approximately 8 years, represents an average annual spend of roughly $16.1 million. This figure is substantial but needs context within the vast landscape of Department of Defense logistics spending. The DoD awards numerous contracts for logistics support, ranging from small, specialized services to massive, enterprise-wide sustainment programs. Without knowing the specific scope and scale of services provided by Boeing under this contract, direct comparison is difficult. However, contracts of this magnitude often support major weapon systems, large operational units, or critical supply chain functions, indicating a significant requirement. Benchmarking would require identifying contracts with similar service scopes and durations.
What are the primary risks associated with a sole-source award of this magnitude and duration?
The primary risks associated with a sole-source award of this magnitude and duration include potential lack of cost-effectiveness due to the absence of competitive pressure, reduced incentive for innovation from the contractor, and a potential for vendor lock-in. Taxpayers may bear higher costs than if the contract had been competed. Furthermore, the government's leverage in negotiating terms and ensuring optimal performance can be diminished. Dependence on a single provider for critical functions also introduces supply chain risk if the contractor faces financial difficulties, operational disruptions, or strategic shifts. Robust contract management and oversight are crucial to mitigate these risks.
What is Boeing's track record in fulfilling large defense logistics contracts?
The Boeing Company has an extensive and long-standing track record in fulfilling large and complex defense contracts for the U.S. Department of Defense and international allies. While primarily known for aircraft manufacturing, Boeing also provides significant support services, including logistics, sustainment, training, and readiness support for its platforms and other defense systems. Their experience spans decades and covers a wide array of military equipment and operational needs. Given their established presence and capabilities, it is reasonable to assume they possess the infrastructure, expertise, and security clearances necessary to manage substantial logistics contracts effectively. However, specific performance metrics for past contracts would be needed for a detailed assessment.
How has historical spending on defense logistics support evolved, and where does this contract fit?
Historical spending on defense logistics support has consistently represented a significant portion of the Department of Defense's overall budget, driven by the need to maintain global readiness and operational capability. Spending has evolved with technological advancements, shifts in geopolitical strategy (e.g., from large-scale conventional warfare to counter-insurgency and readiness for peer competition), and the increasing complexity of military platforms. Contracts for logistics, sustainment, and maintenance are crucial for ensuring the availability and effectiveness of defense assets. This $128.9 million contract, awarded over an extended period, fits within the ongoing trend of outsourcing or contracting specialized support functions to industry partners like Boeing, allowing the DoD to focus on core warfighting missions. It reflects a commitment to ensuring the operational readiness of specific defense capabilities.
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