Navy Awards $185M for Aircraft Manufacturing to Boeing, Raising Competition Concerns
Contract Overview
Contract Amount: $185,370,917 ($185.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2019-05-17
End Date: 2022-12-31
Contract Duration: 1,324 days
Daily Burn Rate: $140.0K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NRE/SITE STANDUP AT SAT, SEPM AT STL, AIRCRAFT BUNOS 166448, 166434, 166453, 166465, 166599, 166621 AND 166629.
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $185.4 million to THE BOEING COMPANY for work described as: NRE/SITE STANDUP AT SAT, SEPM AT STL, AIRCRAFT BUNOS 166448, 166434, 166453, 166465, 166599, 166621 AND 166629. Key points: 1. Significant award of $185.4M to a single large contractor, The Boeing Company. 2. Sole-source award for critical aircraft components, potentially limiting competitive pricing. 3. Long performance period of 1324 days suggests complex, long-term requirements. 4. Focus on aircraft manufacturing falls within a high-spending defense sector.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar aircraft manufacturing contracts is difficult without more detailed cost breakdowns, but the overall value is substantial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher prices and reduced innovation compared to a full-and-open competition.
Taxpayer Impact: The lack of competition for this large contract may result in taxpayers paying a premium for aircraft components.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Potential for reduced innovation and efficiency in aircraft manufacturing. Dependence on a single contractor for critical defense components. Long-term nature of the contract impacts budget predictability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long performance duration
- Lack of transparency in pricing
Positive Signals
- Award to established large contractor
- Supports critical defense needs
Sector Analysis
The Department of the Navy's spending on aircraft manufacturing is a significant portion of the defense budget. Benchmarks for similar sole-source aircraft component contracts are often high due to specialized requirements and limited suppliers.
Small Business Impact
This contract was awarded to The Boeing Company, a large aerospace corporation. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and efficient execution. The Department of Defense should provide justification for the lack of competition and monitor cost performance closely.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition
- Cost-plus contract type increases cost risk
- Long contract duration may lead to scope creep or price escalation
- Limited transparency on pricing justification
- Potential for contractor complacency without competitive pressure
Tags
aircraft-manufacturing, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $185.4 million to THE BOEING COMPANY. NRE/SITE STANDUP AT SAT, SEPM AT STL, AIRCRAFT BUNOS 166448, 166434, 166453, 166465, 166599, 166621 AND 166629.
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 $185.4 million.
What is the period of performance?
Start: 2019-05-17. End: 2022-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. To ensure fair pricing, the agency should conduct a thorough price analysis, potentially using historical data, cost realism assessments, and market research to validate the proposed costs against industry benchmarks. Regular audits and performance reviews are also crucial.
What are the potential risks associated with a sole-source, cost-plus fixed fee contract for aircraft manufacturing, and how are they being mitigated?
Risks include potential cost overruns due to the cost-plus nature, lack of competitive pressure leading to inflated prices, and contractor complacency. Mitigation strategies involve stringent cost controls, detailed performance metrics, independent cost reviews, and clear contract milestones with defined deliverables. Robust oversight is essential to manage these risks effectively.
How does this contract contribute to the overall effectiveness and readiness of the U.S. Navy's aircraft capabilities?
This contract directly supports the acquisition or sustainment of specific aircraft by providing essential components or manufacturing services. Its effectiveness hinges on the timely delivery of high-quality parts and the successful integration into the aircraft, ultimately impacting the Navy's operational readiness and mission capabilities. The long duration suggests a sustained need for these components.
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
Pricing Type: COST PLUS FIXED FEE (U)
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: $178,711,731
Exercised Options: $178,711,731
Current Obligation: $185,370,917
Actual Outlays: $24,832,988
Subaward Activity
Number of Subawards: 125
Total Subaward Amount: $37,346,769
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001918D0001
IDV Type: IDC
Timeline
Start Date: 2019-05-17
Current End Date: 2022-12-31
Potential End Date: 2022-12-31 00:00:00
Last Modified: 2026-01-14
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