Boeing awarded $11.6M for aircraft manufacturing, with contract performance extending into FY24

Contract Overview

Contract Amount: $11,636,823 ($11.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-12-14

End Date: 2024-10-31

Contract Duration: 1,052 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: A/C FY22 SAT (NEW ORDER)-1 JET #649 FEBRUARY INDUCTION

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: A/C FY22 SAT (NEW ORDER)-1 JET #649 FEBRUARY INDUCTION Key points: 1. Contract awarded to a single, established provider, suggesting potential for limited competition. 2. The contract type (Cost Plus Incentive Fee) may incentivize performance but requires careful oversight to manage costs. 3. Delivery order issued under a larger contract vehicle, indicating a need for ongoing aircraft support. 4. Performance period spans multiple fiscal years, requiring sustained budget allocation and oversight. 5. The specific aircraft model or service is not detailed, limiting granular performance assessment. 6. Focus on aircraft manufacturing points to a critical defense supply chain component.

Value Assessment

Rating: fair

The total award amount of $11.6 million for this delivery order appears to be within a reasonable range for specialized aircraft manufacturing and support services. However, without specific details on the aircraft model, scope of work, or comparison to similar recent awards for identical services, a precise value-for-money assessment is challenging. The Cost Plus Incentive Fee (CPIF) structure suggests that the government aims to control costs while incentivizing contractor performance, but it necessitates robust monitoring to ensure the government does not overpay.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, indicating that it was not competed. This approach is typically used when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the requirement. While efficient for specific needs, it bypasses the competitive process, potentially leading to higher prices than if multiple bidders were involved.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding, potentially resulting in a higher overall cost for this requirement.

Public Impact

The Department of the Navy benefits from the continued availability of critical aircraft manufacturing and support services. This contract ensures the operational readiness and maintenance of specific aircraft assets vital to national defense. The geographic impact is centered around the contractor's facilities in Missouri, supporting local employment and economic activity. Workforce implications include the continued employment of skilled labor in aircraft manufacturing and related technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
CPIF contract type requires diligent oversight to prevent cost overruns.
Limited public information on the specific services rendered hinders transparency.
Contract duration extends over multiple fiscal years, requiring sustained budget commitment.

Positive Signals

Award to a major defense contractor with established capabilities.
Delivery order issued under a potentially pre-negotiated contract vehicle.
Contract aims to ensure continued support for critical defense assets.
Performance period extends to late 2024, providing long-term support.

Sector Analysis

The aircraft manufacturing sector is a cornerstone of the defense industrial base, characterized by high barriers to entry, significant R&D investment, and long production cycles. This contract falls within the broader aerospace and defense industry, which is heavily influenced by government procurement. Spending in this sector is often driven by modernization efforts, sustainment of existing fleets, and development of next-generation platforms. Benchmarks for similar aircraft manufacturing contracts can vary widely based on the complexity and scale of the aircraft involved.

Small Business Impact

This contract was not competed and there is no indication of small business set-aside or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless the prime contractor voluntarily includes them in their supply chain. Further analysis would be needed to determine if subcontracting opportunities exist within the broader contract vehicle under which this delivery order was issued.

Oversight & Accountability

Oversight for this delivery order would primarily fall under the Department of the Navy's contracting and program management offices. The Cost Plus Incentive Fee (CPIF) structure necessitates rigorous financial and performance monitoring to ensure adherence to contract terms and cost controls. Transparency is limited due to the sole-source nature and lack of detailed public information. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Procurement, Navy
Aircraft Maintenance and Repair
Defense Production Act Investments
Aerospace Manufacturing Contracts
Naval Aviation Support Programs

Risk Flags

Sole-source award limits competitive pricing.
CPIF contract requires robust cost and performance oversight.
Limited public detail on specific services and aircraft.
Potential for supply chain dependencies impacting delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to THE BOEING COMPANY. A/C FY22 SAT (NEW ORDER)-1 JET #649 FEBRUARY INDUCTION

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: 2021-12-14. End: 2024-10-31.

What is the specific aircraft model or system this delivery order pertains to, and what is the scope of work involved?

The provided data indicates the contract is for 'A/C FY22 SAT (NEW ORDER)-1 JET #649 FEBRUARY INDUCTION' and falls under NAICS code 336411 (Aircraft Manufacturing). However, the specific aircraft model, its role, and the precise nature of the manufacturing or support services (e.g., new production, modification, repair, sustainment) are not detailed in the summary data. This lack of specificity makes it difficult to benchmark the value or assess the strategic importance of this particular award beyond its general classification within aircraft manufacturing.

How does the Cost Plus Incentive Fee (CPIF) structure compare to other contract types used for similar aircraft manufacturing services?

Cost Plus Incentive Fee (CPIF) contracts are used when the final costs are uncertain but can be reasonably estimated, and the government wants to incentivize the contractor to control costs and meet performance targets. In this case, the government pays the actual allowable costs plus a target fee, with adjustments to the fee based on performance against pre-determined targets (e.g., cost, schedule, performance). Compared to Fixed Price contracts, CPIF offers more flexibility for the contractor but requires more government oversight. Compared to Cost Plus Fixed Fee (CPFF), CPIF provides a stronger incentive for cost control. For aircraft manufacturing, especially for complex or developmental systems, CPIF can be appropriate, but it necessitates robust government cost analysis and performance monitoring to ensure fair pricing and value.

What is the historical spending pattern for aircraft manufacturing services provided by The Boeing Company to the Department of the Navy?

The provided data only details a single delivery order valued at $11.6 million. To assess historical spending patterns, a broader analysis of past contracts between The Boeing Company and the Department of the Navy for aircraft manufacturing and related services would be required. This would involve examining contract databases for similar awards over several fiscal years, noting trends in contract types, values, and performance periods. Such an analysis could reveal whether this award represents a typical level of spending, an increase, or a decrease, and whether there's a consistent reliance on Boeing for specific aircraft programs.

What are the key performance indicators (KPIs) or metrics associated with this CPIF contract, and how are they measured?

The provided data does not specify the key performance indicators (KPIs) or metrics associated with this Cost Plus Incentive Fee (CPIF) contract. Typically, for aircraft manufacturing or support, KPIs could include delivery schedules, quality standards (e.g., defect rates), technical performance specifications, or cost-saving initiatives. The incentive portion of the fee would be tied to the contractor's achievement of these pre-defined targets. Without this information, it is impossible to assess how contractor performance is being measured or how the incentive fee is being calculated, which is crucial for understanding the value proposition of a CPIF contract.

Are there any known risks or challenges associated with The Boeing Company's performance on defense contracts, particularly in aircraft manufacturing?

The Boeing Company, as a major defense contractor, has a long history of performance on complex aircraft programs. However, like any large manufacturer, it has faced challenges, including production delays, quality control issues, and cost overruns on certain high-profile programs in the past. These challenges can stem from supply chain disruptions, technical complexities, or program management issues. For this specific contract, the risks would depend on the particular aircraft and the scope of work. The CPIF structure is designed to mitigate some cost risks for the government, but performance risks related to schedule and quality still require diligent oversight from the Department of the Navy.

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 INCENTIVE FEE (V)

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: $11,636,823

Exercised Options: $11,636,823

Current Obligation: $11,636,823

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,520,000

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