DoD Awards Boeing $11.6M for Aircraft Engine Parts, Raising Oversight Concerns
Contract Overview
Contract Amount: $11,586,930 ($11.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-09-02
End Date: 2027-10-31
Contract Duration: 2,250 days
Daily Burn Rate: $5.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: KITS KUWAIT
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $11.6 million to THE BOEING COMPANY for work described as: KITS KUWAIT Key points: 1. Significant contract value for specialized aircraft engine components. 2. Sole-source award to Boeing limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Long performance period (2021-2027) warrants close monitoring.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a sole-source award, raises concerns about potential cost inefficiencies and the government's ability to secure the best possible price. Benchmarking against similar sole-source engine part contracts would be beneficial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning competition was not sought. This significantly limits price discovery and may lead to higher costs for taxpayers compared to a competitively bid contract.
Taxpayer Impact: The lack of competition in this sole-source award could result in higher taxpayer costs for essential aircraft engine parts.
Public Impact
Ensures continued operational readiness for critical naval aircraft. Supports a key defense contractor, potentially impacting the aerospace supply chain. Long-term nature of the contract may affect budget predictability for the Navy.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Long duration
- Lack of small business participation
Positive Signals
- Essential for aircraft maintenance
- Supports critical defense capabilities
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often characterized by high technical requirements and limited supplier options, making competitive sourcing challenging but crucial.
Small Business Impact
The data indicates no small business participation in this contract. Given the specialized nature of aircraft engine parts and the sole-source award to a large prime contractor, opportunities for small businesses appear limited in this specific procurement.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure cost reasonableness and prevent potential waste. The Department of the Navy should actively monitor expenditures and performance throughout the contract's duration.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee structure can lead to cost overruns.
- Lack of small business participation.
- Long contract duration increases risk exposure.
- Potential for price escalation without competitive pressure.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $11.6 million to THE BOEING COMPANY. KITS KUWAIT
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 $11.6 million.
What is the period of performance?
Start: 2021-09-02. End: 2027-10-31.
What specific justification was provided for the sole-source award, and how does it align with federal procurement regulations for limiting competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one source can fulfill. Federal regulations (like FAR Part 6) outline specific criteria for sole-sourcing. A thorough review of the justification document is needed to assess its validity and ensure it wasn't a missed opportunity for competition.
How will the Cost Plus Fixed Fee structure be managed to control costs and ensure value for money, given the absence of competition?
Managing a CPFF contract without competition requires stringent oversight. The government must closely monitor the contractor's costs, ensuring they are reasonable and allowable. Establishing clear performance metrics and milestones, along with regular audits and reviews, are crucial to incentivize efficiency and prevent cost overruns.
What is the projected total cost of ownership for these aircraft engine parts over the contract's lifespan, and how does it compare to potential alternatives?
Determining the total cost of ownership involves analyzing the initial award amount, potential cost growth under the CPFF structure, sustainment costs, and the lifespan of the parts. Without competitive bids, establishing a benchmark for comparison is difficult. However, the Navy should conduct internal cost analyses and explore potential long-term sustainment strategies to estimate the overall financial impact.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JAMES S 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: $11,586,930
Exercised Options: $11,586,930
Current Obligation: $11,586,930
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $4,273,158
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001921G0006
IDV Type: BOA
Timeline
Start Date: 2021-09-02
Current End Date: 2027-10-31
Potential End Date: 2027-10-31 00:00:00
Last Modified: 2025-09-04
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