DoD's $365M Boeing Contract for Time Critical Parts: A Sole-Source Analysis
Contract Overview
Contract Amount: $365,057,686 ($365.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2007-02-16
End Date: 2015-12-28
Contract Duration: 3,237 days
Daily Burn Rate: $112.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TIME CRITICAL PARTS (TCP)
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $365.1 million to THE BOEING COMPANY for work described as: TIME CRITICAL PARTS (TCP) Key points: 1. Significant spending on specialized aircraft parts highlights a critical supply chain component. 2. Sole-source award to Boeing raises questions about competition and potential cost efficiencies. 3. Long contract duration (2007-2015) suggests a sustained need, but also potential for price escalation. 4. Lack of small business participation noted, potentially limiting broader economic impact. 5. The 'Other Aircraft Parts' NAICS code indicates a specialized, potentially high-barrier-to-entry market.
Value Assessment
Rating: questionable
The contract's value of $365M over its duration is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar specialized parts contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery mechanisms and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition likely led to a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Ensures availability of critical components for defense platforms, maintaining operational readiness. Supports a major aerospace manufacturer, contributing to the defense industrial base. Lack of transparency in pricing due to sole-source nature may lead to public scrutiny. Limited opportunities for smaller, innovative suppliers to enter the market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Long duration
Positive Signals
- Ensures supply of critical parts
- Supports major defense contractor
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on manufacturing specialized aircraft parts. Spending benchmarks in this area are often high due to complex engineering and stringent quality requirements.
Small Business Impact
The contract data indicates no specific set-aside for small businesses (sb: false). This suggests that opportunities for small businesses in this specific procurement were either non-existent or not prioritized.
Oversight & Accountability
The sole-source nature of this contract warrants scrutiny regarding the justification for not seeking competitive bids. Oversight should focus on ensuring the price paid was reasonable and that future procurements explore competitive options.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Potential for inflated costs due to lack of competition.
- Long contract duration may not reflect current market conditions.
- Limited visibility into cost drivers and profit margins.
- No indication of small business participation.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, mo, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $365.1 million to THE BOEING COMPANY. TIME CRITICAL PARTS (TCP)
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 $365.1 million.
What is the period of performance?
Start: 2007-02-16. End: 2015-12-28.
What was the justification for awarding this contract on a sole-source basis, and were alternative sourcing strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent requirements that only one source can meet. For this contract, the specific rationale needs to be documented by the Department of Defense. Without this documentation, it's impossible to definitively state if alternative sourcing was considered or if the sole-source decision was fully justified, potentially impacting value for money.
How does the per-unit cost of these Time Critical Parts compare to industry benchmarks, given the lack of competitive pricing?
Assessing the per-unit cost against industry benchmarks is challenging without competitive data. Sole-source contracts often lack the transparency needed for direct comparison. The government likely relied on cost-plus analysis or historical pricing, but without competition, there's inherent risk that the price paid exceeded what a competitive market would yield. Further analysis would require access to detailed cost breakdowns and market research.
What measures were in place to ensure the effectiveness and timely delivery of these critical parts under a long-term, sole-source agreement?
Effectiveness and timely delivery under sole-source contracts often rely on robust contract management, performance metrics, and clear delivery schedules. The Department of Defense would have oversight mechanisms through the Defense Contract Management Agency (DCMA) to monitor Boeing's performance. However, the long duration and sole-source nature could potentially reduce the contractor's incentive for continuous improvement or cost reduction compared to a competitive environment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001906R0091
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $365,057,686
Exercised Options: $365,057,686
Current Obligation: $365,057,686
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-02-16
Current End Date: 2015-12-28
Potential End Date: 2015-12-28 00:00:00
Last Modified: 2020-05-08
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