DoD Awards $782.7M for AV-8 Harrier Aircraft Fixed Wing Support to McDonnell Douglas

Contract Overview

Contract Amount: $344,576,825 ($344.6M)

Contractor: Mcdonnell Douglas Corporation

Awarding Agency: Department of Defense

Start Date: 1999-11-30

End Date: 2005-07-31

Contract Duration: 2,070 days

Daily Burn Rate: $166.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200009!1700!000423!AC5G0 !NAVAL AIR SYSTEMS COMMAND !N0001997C0046 !A!*!P00036 !19991130!20021231!782719819!006265946!009256819!N!96301!MCDONNELL DOUGLAS CORPORATION !P.O. BOX 516 !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !0001!+000158859523!N!Y!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AVG!AV-8 HARRIER !3721!3!*!*!H!B!A!*!D !N!L!1!001!N!1A!A!Y!A!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134, UNITED STATES OF AMERICA

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $344.6 million to MCDONNELL DOUGLAS CORPORATION for work described as: 200009!1700!000423!AC5G0 !NAVAL AIR SYSTEMS COMMAND !N0001997C0046 !A!*!P00036 !19991130!20021231!782719819!006265946!009256819!N!96301!MCDONNELL DOUGLAS CORPORATION !P.O. BOX 516 !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST.… Key points: 1. Significant contract value for aircraft sustainment. 2. Sole-source award raises questions about competition and pricing. 3. Potential for cost overruns given the long duration and fixed-price nature. 4. Defense sector spending on aircraft maintenance is substantial.

Value Assessment

Rating: questionable

The contract value of $782.7 million over approximately 6.5 years suggests a substantial investment. Without specific per-unit cost data or benchmarks for similar sustainment contracts, it's difficult to definitively assess value. However, the lack of competition is a red flag for potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This significantly limits price discovery and may lead to higher costs for taxpayers as the government did not explore alternative vendors or negotiate based on multiple offers.

Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium due to the absence of competitive pressure to reduce costs.

Public Impact

Taxpayers fund critical defense systems, including aircraft maintenance. Lack of competition can lead to inflated prices for essential services. Long-term contracts require ongoing oversight to ensure value for money. The specific aircraft model (AV-8 Harrier) is a key component of naval aviation readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Potential for cost creep

Positive Signals

Supports critical defense asset
Firm fixed price contract

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment. Spending in this area is crucial for maintaining military readiness but can be prone to high costs, especially for specialized platforms like the AV-8 Harrier.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors. The award went to a large corporation, McDonnell Douglas.

Oversight & Accountability

The long duration of this contract necessitates robust oversight from the Department of Defense and the Defense Contract Management Agency to ensure performance standards are met and costs remain justified, especially given the sole-source nature.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Long contract duration increases risk of cost escalation and performance issues.
Lack of detailed cost data hinders value assessment.
Potential for contractor lock-in due to specialized nature of aircraft sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $344.6 million to MCDONNELL DOUGLAS CORPORATION. 200009!1700!000423!AC5G0 !NAVAL AIR SYSTEMS COMMAND !N0001997C0046 !A!*!P00036 !19991130!20021231!782719819!006265946!009256819!N!96301!MCDONNELL DOUGLAS CORPORATION !P.O. BOX 516 !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !0001!+000158859523!N!Y!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AVG!AV-8 HARRIER !3721!3!*!*!H!B!A!*!D !N!L!

Who is the contractor on this award?

The obligated recipient is MCDONNELL DOUGLAS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $344.6 million.

What is the period of performance?

Start: 1999-11-30. End: 2005-07-31.

What was the justification for awarding this contract on a sole-source basis, and were any alternatives considered?

The provided data indicates a sole-source award, meaning competitive bidding was not utilized. The specific justification for this approach is not detailed here. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services, or in cases of urgent need. Without further documentation, it's unclear if these conditions were met or if other potential vendors were evaluated.

How does the per-unit cost of sustainment for the AV-8 Harrier compare to similar aircraft platforms within the DoD's inventory?

The provided data does not include specific per-unit cost breakdowns for the sustainment services rendered under this contract. Benchmarking against similar aircraft platforms would require access to detailed cost data for other contracts, which is not available here. A comprehensive analysis would involve comparing maintenance hours, parts replacement rates, and labor costs across different aircraft types.

What mechanisms are in place to ensure the effectiveness and efficiency of McDonnell Douglas's sustainment services throughout the contract's duration?

While the contract is firm fixed price, which incentivizes the contractor to control costs, the long duration and sole-source nature necessitate active government oversight. This likely involves performance monitoring, quality assurance checks, and regular reviews by the Defense Contract Management Agency to ensure the services provided are effective and meet the required military standards for the AV-8 Harrier.

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: P.O. BOX 516, SAINT LOUIS, MO, 63166

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline