Boeing awarded $29.4M for critical landing gear components, raising questions about competition and value

Contract Overview

Contract Amount: $29,396,312 ($29.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-12-21

End Date: 2024-02-26

Contract Duration: 1,162 days

Daily Burn Rate: $25.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ECPS 1121C1 & 1122C1: MAIN LANDING GEAR AND NOSE LANDING GEAR CRITICAL COMPONENTS RETROFIT PARTS.

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $29.4 million to THE BOEING COMPANY for work described as: ECPS 1121C1 & 1122C1: MAIN LANDING GEAR AND NOSE LANDING GEAR CRITICAL COMPONENTS RETROFIT PARTS. Key points: 1. Contract awarded to a single source, limiting price discovery and potentially increasing costs. 2. The contract duration of over three years suggests a long-term need for these components. 3. Focus on critical components highlights the importance of supply chain reliability for defense readiness. 4. The firm-fixed-price structure aims to control costs, but the lack of competition is a concern. 5. This award represents a significant investment in maintaining the operational readiness of naval aircraft.

Value Assessment

Rating: questionable

The awarded amount of $29.4 million for landing gear components appears substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition raises concerns about whether the government secured the best possible value. Further analysis would be needed to compare this to historical pricing for similar retrofits or components from other manufacturers, if available.

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 bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances, such as when only one entity possesses the required capabilities or intellectual property, it significantly reduces the opportunity for price negotiation and market-driven cost efficiencies.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective pricing. Without competing offers, there's a risk of overpayment compared to what could have been achieved in an open market scenario.

Public Impact

Naval aviation readiness is enhanced through the maintenance and upgrade of critical aircraft components. The U.S. Navy's fleet of aircraft will benefit from improved landing gear reliability. This contract supports specialized manufacturing jobs within The Boeing Company. The geographic impact is primarily centered around Boeing's facilities in Missouri, where the work is performed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value for taxpayers.
Lack of transparency in pricing due to no competitive bids.
Potential for cost overruns if not closely monitored due to single-source nature.

Positive Signals

Focus on critical components ensures operational readiness of naval aircraft.
Firm-fixed-price contract provides cost certainty for the government.
Long-term contract indicates a sustained need and potential for stable supply.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Aircraft manufacturing, specifically, involves specialized engineering and production capabilities. This contract for critical landing gear components fits within the broader defense industrial base, supporting the sustainment and modernization of military aviation assets. Spending in this area is crucial for maintaining national security and operational readiness.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting opportunities for small businesses based on the provided data. The award to a large prime contractor like Boeing typically means that any small business involvement would be through lower-tier subcontracts, the details of which are not specified here. This limits the direct economic benefit to the small business sector from this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. The firm-fixed-price nature of the contract provides a degree of cost control. However, the sole-source award necessitates robust oversight to ensure that the pricing remains fair and reasonable throughout the contract's duration. Transparency could be enhanced by making more detailed justifications for the sole-source award publicly available.

Related Government Programs

Aircraft Parts and Auxiliary Equipment
Aircraft Component Manufacturing
Defense Logistics and Sustainment

Risk Flags

Sole-source award raises concerns about fair pricing and value for money.
Lack of competition limits transparency in cost determination.
Potential for over-reliance on a single supplier for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.4 million to THE BOEING COMPANY. ECPS 1121C1 & 1122C1: MAIN LANDING GEAR AND NOSE LANDING GEAR CRITICAL COMPONENTS RETROFIT PARTS.

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 $29.4 million.

What is the period of performance?

Start: 2020-12-21. End: 2024-02-26.

What is The Boeing Company's track record with the Department of Defense for similar landing gear contracts?

The Boeing Company has a long-standing and extensive track record of supplying aircraft and components to the Department of Defense, including the U.S. Navy. They are a primary manufacturer for many naval aircraft platforms. While specific data on past landing gear retrofit contracts is not detailed here, Boeing's history suggests a deep familiarity with military aviation requirements and production. However, the absence of competition on this specific award means that past performance alone does not guarantee optimal value for this particular procurement. A review of historical contract data for similar retrofits, if available, would be necessary to assess if their pricing has been competitive in the past.

How does the $29.4 million value compare to similar landing gear retrofit contracts?

Benchmarking the $29.4 million value of this contract is challenging without access to a competitive bidding process or a database of comparable sole-source awards. Landing gear retrofits can vary significantly in cost depending on the aircraft type, the complexity of the upgrade, the number of aircraft involved, and the specific components required. Given that this is a sole-source award to Boeing for critical components, the price is likely influenced by proprietary designs and specialized manufacturing capabilities. To assess value, one would ideally compare this to previous contracts for similar retrofits on the same or comparable aircraft platforms, or to bids received in competitive solicitations for analogous work. Without such comparisons, it's difficult to definitively state if this represents good or fair value.

What are the primary risks associated with a sole-source award for critical aircraft components?

The primary risks associated with a sole-source award for critical aircraft components include: 1. **Higher Costs:** Without competition, the contractor has less incentive to offer the lowest possible price, potentially leading to overpayment by the government. 2. **Reduced Innovation:** A lack of competitive pressure may stifle innovation in product development or service delivery. 3. **Dependency:** The government becomes reliant on a single supplier, which can create vulnerabilities in the supply chain if the supplier faces production issues, financial instability, or changes its business strategy. 4. **Limited Oversight Effectiveness:** While oversight mechanisms exist, the absence of competing proposals makes it harder to validate the reasonableness of the contractor's proposed costs and technical approach.

What is the expected program effectiveness or outcome of this contract?

The expected outcome of this contract is the successful retrofit and upgrade of critical landing gear components on U.S. Navy aircraft. This is intended to enhance the safety, reliability, and operational readiness of the affected aircraft fleet. By ensuring these critical parts are up-to-date and functioning correctly, the Navy can maintain its operational capabilities, reduce the risk of in-flight or ground incidents related to landing gear failure, and potentially extend the service life of the aircraft. The effectiveness will be measured by the timely delivery of quality components and their successful integration into the aircraft, leading to sustained mission capability.

How does this $29.4 million award fit into historical spending patterns for aircraft component sustainment by the Navy?

This $29.4 million award for landing gear components represents a specific investment within the broader category of aircraft sustainment and modernization spending by the U.S. Navy. The Navy, like other branches of the military, allocates significant portions of its budget to maintaining the readiness and extending the lifespan of its complex aviation assets. Spending on critical components, such as landing gear, is essential for operational availability. While this single award is substantial, it must be viewed in the context of the Navy's overall annual spending on aircraft maintenance, repair, and overhaul (MRO), which can run into billions of dollars. Analyzing historical spending trends would reveal the proportion allocated to component retrofits versus other sustainment activities and whether spending on such critical parts has been increasing or decreasing.

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

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: $29,396,312

Exercised Options: $29,396,312

Current Obligation: $29,396,312

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $20,891,254

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