DoD awards $42.4M to Boeing for aircraft manufacturing, with limited competition
Contract Overview
Contract Amount: $42,358,978 ($42.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2004-11-30
End Date: 2008-06-30
Contract Duration: 1,308 days
Daily Burn Rate: $32.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $42.4 million to THE BOEING COMPANY for work described as: Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and value for money. 2. Limited competition suggests potential for higher costs compared to a more open bidding process. 3. Contract duration of 1308 days indicates a long-term commitment for aircraft manufacturing services. 4. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored. 5. Boeing's established role in defense contracting suggests a degree of performance reliability, but also highlights market concentration. 6. The absence of small business set-asides or subcontracting requirements may limit broader economic participation.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable data. The Cost Plus Fixed Fee structure, while common for complex projects, carries inherent risks of cost escalation. Without competitive bids, it's difficult to ascertain if the pricing reflects optimal market value. Further analysis would require access to detailed cost breakdowns and historical performance data for similar aircraft manufacturing contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of multiple bidders means there was no direct price competition, potentially leading to less favorable terms for the government.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher costs for taxpayers. It also reduces opportunities for other capable firms to secure government contracts.
Public Impact
The primary beneficiary is The Boeing Company, which receives significant revenue for aircraft manufacturing services. The contract supports the Department of Defense's operational capabilities through the provision of aircraft. The geographic impact is concentrated around Boeing's manufacturing facilities, likely in Missouri given the 'SN' field. This contract supports a skilled workforce in the aerospace and defense manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost Plus Fixed Fee contract type can lead to cost overruns if not managed stringently.
- Lack of transparency in sole-source justification requires careful review.
- Potential for contractor lock-in due to specialized nature of aircraft manufacturing.
Positive Signals
- Boeing is a major, established defense contractor with significant experience.
- The contract addresses a specific need within the Department of Defense.
- Long contract duration suggests a stable, ongoing requirement.
Sector Analysis
The aerospace and defense manufacturing sector is characterized by high barriers to entry, significant R&D investment, and a concentrated supplier base. This contract falls within the broader defense industrial base, a critical area for national security. Comparable spending benchmarks are difficult to establish without more specific details on the aircraft type and scope of work, but large-scale aircraft production contracts typically represent substantial investments.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting plans for small businesses. The sole-source nature further limits opportunities for small businesses to participate directly or indirectly. This could mean a missed opportunity to foster small business growth within the defense supply chain.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures would be embedded in the contract's terms and conditions, including reporting requirements and performance metrics. Transparency is limited due to the sole-source nature, but contract award details are generally made public.
Related Government Programs
- Aircraft Procurement
- Defense Manufacturing
- Aerospace Industry Contracts
- Department of Defense Major Contracts
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of transparency in competition justification
Tags
defense, department-of-defense, the-boeing-company, aircraft-manufacturing, cost-plus-fixed-fee, sole-source, missouri, major-contract, long-duration
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.4 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 $42.4 million.
What is the period of performance?
Start: 2004-11-30. End: 2008-06-30.
What specific aircraft or aircraft systems are being manufactured under this contract?
The provided data does not specify the exact aircraft or aircraft systems covered by this contract. The 'NA' field indicates '336411', which corresponds to the North American Industry Classification System (NAICS) code for 'Aircraft Manufacturing'. This broad classification suggests the contract could encompass a range of activities from component manufacturing to final assembly of aircraft. Without further details, it is impossible to determine the specific end-item or its strategic importance.
What was the justification for awarding this contract on a sole-source basis?
The data indicates the contract was awarded under 'CT: NOT COMPETED', which aligns with a sole-source or limited competition scenario. The specific justification for this sole-source award is not provided in the abbreviated data. Typically, sole-source justifications are based on factors such as the existence of only one responsible source, urgent and compelling needs, or the requirement for a unique capability or proprietary technology. A thorough review of the contract file and associated documentation would be necessary to understand the official rationale.
How does the contract's Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar aircraft manufacturing projects?
The Cost Plus Fixed Fee (CPFF) contract type is often used for complex projects where the scope of work may evolve or is not fully defined at the outset, such as research and development or aircraft manufacturing. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While this structure can accommodate uncertainties, it places a significant burden on the government to closely monitor costs to prevent overruns. Other contract types like Firm-Fixed-Price (FFP) offer greater cost certainty for the government but may require a more precisely defined scope upfront. For established production runs of standard aircraft, FFP might be preferred, whereas for new development or significant modifications, CPFF or other cost-reimbursement variants are more common.
What is the historical spending trend for aircraft manufacturing by the Department of Defense with The Boeing Company?
The provided data only details a single contract awarded from November 30, 2004, to June 30, 2008, for approximately $42.4 million. To assess historical spending trends, a broader dataset encompassing all contracts between the Department of Defense and The Boeing Company for aircraft manufacturing over an extended period would be required. This would involve analyzing contract databases for multiple award years, contract types, and specific aircraft programs to identify patterns, growth, or shifts in spending.
Are there any performance metrics or key performance indicators (KPIs) associated with this contract?
The abbreviated data does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. In a Cost Plus Fixed Fee (CPFF) contract, performance is typically monitored through regular progress reports, technical reviews, and adherence to delivery schedules. The contract's terms and conditions would outline the specific requirements and expectations. The Defense Contract Management Agency (DCMA) would be responsible for overseeing performance and ensuring compliance with these contractual obligations. Without access to the full contract, detailed KPIs cannot be identified.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $27,747,863
Current Obligation: $42,358,978
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2004-11-30
Current End Date: 2008-06-30
Potential End Date: 2008-06-30 00:00:00
Last Modified: 2013-09-17
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