Boeing awarded $28.5M for aircraft manufacturing, a sole-source contract with a long performance period

Contract Overview

Contract Amount: $28,529,498 ($28.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-07-19

End Date: 2023-02-28

Contract Duration: 1,685 days

Daily Burn Rate: $16.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RETROFIT DESIGN&DEVELOPMENT

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to THE BOEING COMPANY for work described as: RETROFIT DESIGN&DEVELOPMENT Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Long performance duration of over 4 years suggests a need for ongoing services. 3. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 4. Delivery Order indicates this is part of a larger contract vehicle. 5. No small business set-aside, potentially limiting opportunities for smaller firms. 6. High dollar value contract warrants close scrutiny of performance and cost.

Value Assessment

Rating: fair

The contract value of $28.5 million over approximately 1685 days (roughly 4.6 years) represents a significant investment. Without specific benchmarks for this type of retrofit design and development for aircraft, it's challenging to definitively assess value for money. However, the sole-source nature of the award means there was no direct price competition to establish a market-based rate. The firm fixed-price structure provides cost predictability for the government, but the absence of competitive bidding suggests potential for overpayment compared to a fully competed scenario.

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 solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of competition means there was no opportunity for other qualified companies to bid, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not leverage the market to find the most cost-effective solution.

Public Impact

The primary beneficiaries are likely the Department of the Navy, receiving critical aircraft retrofit design and development services. The contract supports the maintenance and modernization of naval aviation assets. The geographic impact is centered around the contractor's facilities in Missouri. This contract likely supports a specialized workforce within The Boeing Company, including engineers and technical staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration may indicate potential for scope creep or evolving requirements.
Lack of small business participation could be a missed opportunity for economic inclusion.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to a large, established contractor like Boeing may indicate a need for specialized expertise and reliability.
Delivery Order structure suggests integration into a broader acquisition strategy.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft manufacturing and modification. The market for such specialized design and development services is often dominated by a few large, established prime contractors due to the high barriers to entry, including technical expertise, security clearances, and existing relationships with government agencies. The $28.5 million value is substantial but within the typical range for significant aircraft modification programs. Comparable spending benchmarks would ideally involve looking at other retrofit or upgrade programs for similar naval aircraft.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large prime contractor like Boeing suggests that the primary focus was on leveraging the contractor's direct capabilities. This could mean fewer opportunities for small businesses to participate directly or indirectly through subcontracting on this specific award, potentially impacting the small business ecosystem in this specialized area.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Aviation Modernization Programs
Aircraft Systems Development Contracts
Defense Logistics Agency (DLA) Support Contracts
Air Force Aircraft Retrofit Programs

Risk Flags

Sole-source award
Long contract duration
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to THE BOEING COMPANY. RETROFIT DESIGN&DEVELOPMENT

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 $28.5 million.

What is the period of performance?

Start: 2018-07-19. End: 2023-02-28.

What is the specific nature of the 'retrofit design and development' being performed under this contract?

The provided data indicates the contract is for 'RETROFIT DESIGN & DEVELOPMENT' (NAICS 336411 - Aircraft Manufacturing). While the specific details of the retrofit are not itemized, this typically involves modifying existing aircraft to improve performance, add new capabilities, extend service life, or comply with new regulations. For the Department of the Navy, this could range from avionics upgrades, structural enhancements, weapons system integration, or modifications to meet evolving mission requirements. The 'Aircraft Manufacturing' NAICS code suggests the work may involve significant engineering, design, and potentially some level of fabrication or integration related to the aircraft structure or major systems.

How does the $28.5 million contract value compare to similar aircraft retrofit contracts awarded by the Department of Defense?

Comparing the $28.5 million value requires context on the scope and complexity of the retrofit. For major aircraft platforms (e.g., fighter jets, large transport, or maritime patrol aircraft), this value could represent a mid-tier modernization effort for a specific system or a smaller-scale upgrade across a limited number of airframes. Larger, comprehensive upgrades involving extensive redesign or modernization of multiple systems on numerous aircraft can easily reach hundreds of millions or even billions of dollars. Conversely, smaller, targeted modifications or design studies might be in the single-digit millions. Without knowing the specific aircraft type and the extent of the 'design and development,' a precise benchmark is difficult, but $28.5M suggests a significant, but not program-defining, level of investment.

What are the primary risks associated with a sole-source award of this magnitude and duration?

The primary risk with a sole-source award of this magnitude ($28.5M) and duration (over 4 years) is the potential for inflated pricing due to the lack of competitive pressure. The government may not be achieving the best possible value for its investment. Another risk is contractor performance; while Boeing is a reputable firm, any sole-source contract warrants close monitoring to ensure the contractor meets all technical specifications, quality standards, and delivery schedules. Scope creep is also a risk, where requirements may expand beyond the original intent, potentially leading to cost overruns if not managed carefully, although the firm fixed-price nature offers some protection. Finally, reliance on a single source can create a dependency, making future transitions or alternative solutions more complex.

What does the long performance period (1685 days) imply about the nature of the work and the contractor's role?

A performance period of 1685 days (approximately 4.6 years) for 'retrofit design and development' implies that the work is not a simple, short-term task. It suggests a complex, multi-faceted project that likely involves extensive research, iterative design processes, prototyping, testing, and potentially integration support. This duration indicates that the contractor, The Boeing Company, is expected to be a long-term partner in evolving or modernizing specific aircraft capabilities. It could also imply that the underlying aircraft platform is expected to remain in service for a considerable period, necessitating these ongoing upgrades or modifications.

Are there any indications of past performance issues or successes with The Boeing Company on similar Department of the Navy contracts?

The provided data does not include specific past performance ratings or details for this contract. However, The Boeing Company is a major defense contractor with a long history of working with the Department of the Navy and other military branches. Generally, large contractors like Boeing have extensive track records, which include both successes and challenges on various programs. Agencies typically review past performance data (often from sources like the Contractor Performance Assessment Reporting System - CPARS) when making award decisions, especially for sole-source or high-value contracts. Without access to that specific data for this award action, it's presumed the Navy had sufficient confidence in Boeing's ability to execute this work based on their overall performance history.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918S2654

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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,529,498

Exercised Options: $28,529,498

Current Obligation: $28,529,498

Actual Outlays: $2,575,157

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $8,713,888

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001916G0001

IDV Type: BOA

Timeline