DoD Awards Boeing $594M for LRIP Lot 1 Long Lead Materials for Aircraft Manufacturing

Contract Overview

Contract Amount: $59,447,000 ($59.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2022-09-28

End Date: 2029-11-29

Contract Duration: 2,619 days

Daily Burn Rate: $22.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LRIP LOT 1 LONG LEAD MATERIALS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $59.4 million to THE BOEING COMPANY for work described as: LRIP LOT 1 LONG LEAD MATERIALS Key points: 1. Significant investment in aircraft manufacturing materials. 2. Sole-source award to Boeing raises competition concerns. 3. Long contract duration (2029) presents potential for cost escalation. 4. Focus on long-lead materials suggests future production ramp-up.

Value Assessment

Rating: questionable

The contract value of $594.47 million for long-lead materials is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible price for these critical long-lead materials.

Public Impact

Impacts future production schedules for naval aircraft. Potential for job creation within Boeing and its supply chain. Ensures availability of specialized components for defense needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Secures critical long-lead materials
Supports established defense contractor

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often characterized by high R&D costs, complex supply chains, and significant government oversight due to national security implications.

Small Business Impact

The data does not indicate any specific provisions or subcontracting goals for small businesses in this sole-source award to a large prime contractor.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant close oversight to ensure cost controls and adherence to delivery schedules, particularly given the significant taxpayer investment.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competition.
Long contract duration increases risk.
Potential for cost escalation.
Lack of transparency in pricing justification.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.4 million to THE BOEING COMPANY. LRIP LOT 1 LONG LEAD MATERIALS

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 $59.4 million.

What is the period of performance?

Start: 2022-09-28. End: 2029-11-29.

What is the justification for the sole-source award, and what steps were taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without competitive bidding, the government must rely on robust negotiation and cost analysis to ensure fair pricing. Further documentation would be needed to detail the specific justification and the price negotiation process employed.

What are the specific risks associated with the long lead time and potential for cost overruns?

The extended duration increases the risk of market fluctuations in material costs, labor rate changes, and unforeseen production challenges. Without competitive pressure, there's less incentive for the contractor to aggressively manage costs. This necessitates strong contract management and contingency planning to mitigate potential overruns.

How does this procurement align with the Navy's long-term aircraft modernization and readiness goals?

This procurement of long-lead materials is crucial for ensuring the timely production and delivery of future aircraft, directly supporting the Navy's modernization efforts and maintaining operational readiness. The investment signals a commitment to upcoming platforms and their sustainment.

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: N0001922R0048

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $59,447,000

Exercised Options: $59,447,000

Current Obligation: $59,447,000

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $6,498,655

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline