Navy Acquires Two Boeing C-40A Aircraft for $371.7M, Lacking Competition
Contract Overview
Contract Amount: $371,691,606 ($371.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2012-12-20
End Date: 2020-08-31
Contract Duration: 2,811 days
Daily Burn Rate: $132.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF 2 C-40A CLIPPER AIRCRAFT FOR THE U.S. NAVY
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $371.7 million to THE BOEING COMPANY for work described as: PROCUREMENT OF 2 C-40A CLIPPER AIRCRAFT FOR THE U.S. NAVY Key points: 1. High cost for two aircraft suggests potential for overpayment. 2. Sole-source procurement limits price discovery and competitive advantage. 3. Long contract duration (2012-2020) may indicate schedule overruns or scope creep. 4. Aircraft manufacturing sector is complex, but competition is usually feasible.
Value Assessment
Rating: questionable
The total award of $371.7 million for two C-40A aircraft is substantial. Without competitive bids, it's difficult to benchmark against similar procurements, but the per-unit cost appears high.
Cost Per Unit: $185.85 million per aircraft
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and likely resulted in a higher price than if competition had been pursued.
Taxpayer Impact: Taxpayers may have overpaid due to the lack of competitive bidding, as the government did not leverage market forces to secure the best possible price.
Public Impact
Military readiness potentially impacted by delayed or costly aircraft acquisition. Taxpayer funds allocated to a single vendor without exploring alternative, potentially lower-cost options. Lack of transparency in the procurement process raises questions about efficiency and value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- High total cost
- Lack of competition
- Long contract duration
Positive Signals
- Firm fixed price contract type
- Aircraft acquired for Navy use
Sector Analysis
The acquisition of specialized military aircraft falls within the aerospace and defense sector. Benchmarks for similar large aircraft procurements are often highly variable due to customization and specific mission requirements, but competition is typically sought to ensure value.
Small Business Impact
This procurement was awarded to The Boeing Company, a large prime contractor. There is no indication of small business participation in this specific contract award, suggesting opportunities for subcontracting were not prioritized or disclosed.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the price paid was justified and that future procurements of similar assets explore competitive avenues to maximize taxpayer value.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- High unit cost
- Sole-source award
- Potential for overpayment
- Limited transparency
Tags
aircraft-manufacturing, department-of-defense, ok, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $371.7 million to THE BOEING COMPANY. PROCUREMENT OF 2 C-40A CLIPPER AIRCRAFT FOR THE U.S. NAVY
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $371.7 million.
What is the period of performance?
Start: 2012-12-20. End: 2020-08-31.
What justification was provided for the sole-source award of the C-40A aircraft, and were any market research efforts conducted to assess competitive options?
The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source justification was applied. However, the specific rationale or documentation supporting this decision, such as urgent need or unique capability, is not detailed. Without this information, it's impossible to fully assess if competitive alternatives were genuinely unavailable or if market research was insufficient.
How does the per-unit cost of $185.85 million for the C-40A compare to similar military transport aircraft procured competitively around the same period?
Benchmarking the $185.85 million per-unit cost is challenging without specific comparable aircraft data. However, this figure appears high for transport aircraft. Competitively procured aircraft of similar size and capability, like the C-130J or even commercial derivatives used for military purposes, often come in at lower price points, especially when economies of scale from competition are realized.
What is the long-term operational and maintenance cost associated with these C-40A aircraft, and how does it compare to the initial procurement cost?
The provided data focuses solely on the procurement cost and contract period. Information regarding the total cost of ownership, including sustainment, upgrades, fuel, and personnel, is not available. Understanding these long-term costs is crucial for a complete assessment of the overall value and financial impact on the Navy and taxpayers beyond the initial acquisition.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001912R0023
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $375,344,021
Exercised Options: $371,691,606
Current Obligation: $371,691,606
Subaward Activity
Number of Subawards: 19
Total Subaward Amount: $4,027,227
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2012-12-20
Current End Date: 2020-08-31
Potential End Date: 2020-08-31 00:00:00
Last Modified: 2020-10-07
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