Navy Awards $1.5B for Aircraft Manufacturing to McDonnell Douglas Corporation

Contract Overview

Contract Amount: $503,775,938 ($503.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2004-01-09

End Date: 2009-12-31

Contract Duration: 2,183 days

Daily Burn Rate: $230.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200408!000011!1700!AC5G1 !NAVAL AIR SYSTEMS COMMAND !N0001904C0013 !A!N! !N! ! !20040109!20070928!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000013048981!N!N!000018487028!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !240 !T 45TS !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !D!Y!J!1!001!N!1A!A!W!F! ! !N!C!N! ! ! !A!A!A!A!000!A!D!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 $503.8 million to THE BOEING COMPANY for work described as: 200408!000011!1700!AC5G1 !NAVAL AIR SYSTEMS COMMAND !N0001904C0013 !A!N! !N! ! !20040109!20070928!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. … Key points: 1. The contract, valued at $1.5 billion, is for aircraft fixed wing airframes and spares. 2. The primary contractor is McDonnell Douglas Corporation, now part of The Boeing Company. 3. This award was made under full and open competition after exclusion of sources. 4. The contract duration is over 5 years, from January 2004 to December 2009. 5. The sector is Defense, specifically Aircraft Manufacturing.

Value Assessment

Rating: good

The total contract value is $1.5 billion. Without specific unit pricing or comparison data for similar airframes and spares, a precise per-unit cost assessment is difficult. However, the value suggests a significant procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition after exclusion of sources, indicating a competitive bidding process. This method generally promotes price discovery and potentially better pricing for the government.

Taxpayer Impact: The competitive nature of the award suggests efforts to secure favorable pricing, ultimately benefiting taxpayers through efficient use of defense funds.

Public Impact

Significant investment in military aircraft production, supporting national defense capabilities. Potential job creation and economic impact in the aerospace manufacturing sector. Ensures the availability of critical aircraft components for naval aviation. Highlights the role of major defense contractors in supplying the U.S. military.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in long-term, large-value contracts.
Dependence on a single prime contractor for critical components.
Risk associated with the integration of McDonnell Douglas into Boeing.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Long-term contract provides stability for production and supply chain.
Supports a key sector of the defense industrial base.

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is critical for maintaining military readiness and technological superiority. Benchmarks for such large-scale aircraft production contracts are typically in the billions.

Small Business Impact

The data indicates the prime contractor is McDonnell Douglas Corporation (now Boeing). There is no explicit information regarding the involvement or subcontracting to small businesses within this specific award data.

Oversight & Accountability

The contract was awarded by the Naval Air Systems Command, a component of the Department of Defense. Oversight would typically involve contract management and performance monitoring by the Defense Contract Management Agency to ensure compliance and quality.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Contract awarded to a single large corporation, potentially limiting broader economic distribution.
Long contract duration (over 5 years) increases exposure to market and technological changes.
Specific reasons for 'exclusion of sources' are not detailed, warranting further investigation.
Lack of detailed cost breakdown makes granular value assessment challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $503.8 million to THE BOEING COMPANY. 200408!000011!1700!AC5G1 !NAVAL AIR SYSTEMS COMMAND !N0001904C0013 !A!N! !N! ! !20040109!20070928!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000013048981!N!N!000018487028!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !240 !T 45TS !336411!E! !3! ! ! ! ! !999

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 $503.8 million.

What is the period of performance?

Start: 2004-01-09. End: 2009-12-31.

What was the specific breakdown of costs for airframes versus spares, and how did this compare to initial estimates?

The provided data does not detail the cost breakdown between airframes and spares, nor does it include initial estimates for comparison. Further analysis would require access to the detailed contract line item numbers (CLINs) and any associated cost proposals or baseline estimates to assess value effectively.

What were the key factors that led to the exclusion of other sources in this 'full and open competition after exclusion of sources' award?

The 'exclusion of sources' clause typically implies that while the competition was intended to be open, specific circumstances or requirements may have limited the pool of eligible bidders. This could be due to proprietary technology, unique capabilities, or specific national security considerations that only certain companies could meet.

How has the performance of this contract impacted the operational readiness of naval aviation assets?

The impact on operational readiness is not directly quantifiable from this data. However, a contract of this magnitude for airframes and spares suggests a strategic effort to maintain or enhance the fleet's capabilities. Successful delivery and quality of components are crucial for ensuring aircraft availability and mission effectiveness.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline