Boeing awarded $37.2M for FMS funded design agent support, a sole-source contract

Contract Overview

Contract Amount: $37,188,770 ($37.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2009-07-02

End Date: 2017-07-28

Contract Duration: 2,948 days

Daily Burn Rate: $12.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DESIGN AGENT SUPPORT (FMS FUNDED)

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $37.2 million to THE BOEING COMPANY for work described as: DESIGN AGENT SUPPORT (FMS FUNDED) Key points: 1. Contract awarded to a single, established provider, raising questions about price competitiveness. 2. Long contract duration (2948 days) suggests a sustained need for these specialized engineering services. 3. The 'NOT COMPETED' status indicates a lack of market exploration for potential cost savings. 4. Services provided under the 'Engineering Services' category are critical for complex defense systems. 5. The contract's value, while significant, needs benchmarking against similar sole-source engineering support. 6. Performance context is limited without specific deliverables or success metrics outlined.

Value Assessment

Rating: questionable

The contract's value of $37.2 million for engineering services, awarded on a Cost Plus Fixed Fee basis, warrants scrutiny due to its sole-source nature. Without competitive bidding, it is difficult to ascertain if the pricing reflects fair market value. Benchmarking against similar sole-source contracts for design agent support within the Department of Defense or for foreign military sales (FMS) would be necessary to assess value for money. The lack of competition inherently limits the ability to identify potential cost efficiencies or innovative solutions that might have emerged from a broader bidder pool.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The 'NOT COMPETED' status suggests that the agency identified a specific reason for not soliciting bids from other companies, such as a unique capability possessed by The Boeing Company or a requirement tied to existing systems. The lack of competition means there were no multiple bidders to drive price discovery through a bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive pressure. Without a bidding process, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

Foreign military sales (FMS) programs benefit from specialized design agent support, ensuring the integrity and functionality of defense systems provided to allied nations. The Department of Defense receives critical engineering services that underpin the sustainment and development of complex aircraft and defense platforms. The contract supports specialized engineering roles, potentially impacting a highly skilled workforce within the aerospace and defense sector. Geographic impact is primarily tied to the contractor's facilities in California, where the services are likely performed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Lack of transparency in the justification for sole-source award.
Long contract duration without clear performance milestones could indicate scope creep or inefficiency.
Cost-plus-fixed-fee contract type can incentivize cost overruns if not closely managed.

Positive Signals

Award to a single, highly experienced contractor (Boeing) suggests a focus on specialized expertise.
Contract supports critical Foreign Military Sales (FMS) programs, contributing to national security alliances.
Engineering services are essential for maintaining and upgrading complex defense systems.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. This contract falls within the Engineering Services sector, specifically supporting complex defense systems and foreign military sales. The market for such specialized support is often dominated by a few large, established prime contractors like Boeing, due to the intricate knowledge and security clearances required. Comparable spending benchmarks for sole-source engineering support contracts within this niche are difficult to establish publicly but are typically substantial given the complexity and criticality of the services.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'sb: false'. Given the sole-source nature and the prime contractor being The Boeing Company, it is unlikely that significant subcontracting opportunities for small businesses were mandated or explored as part of a competitive process. The focus is on direct support from a large, established entity rather than fostering small business participation through set-asides.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'Cost Plus Fixed Fee' (CPFF) contract type requires diligent oversight to manage costs and prevent overruns. Transparency regarding the specific oversight mechanisms and accountability measures employed for this sole-source award would be beneficial, particularly concerning the justification for the non-competitive award and the monitoring of expenditures against the fixed fee.

Related Government Programs

Foreign Military Sales (FMS) Program Support
Defense Engineering Services
Aerospace Systems Design
Aircraft Sustainment Contracts
Department of Defense Procurement

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns in CPFF contract type.
Long contract duration increases risk of scope creep and inflation.
Limited transparency on justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.2 million to THE BOEING COMPANY. DESIGN AGENT SUPPORT (FMS FUNDED)

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.2 million.

What is the period of performance?

Start: 2009-07-02. End: 2017-07-28.

What specific engineering services does The Boeing Company provide under this contract?

Under contract number [Contract Number], The Boeing Company provides 'DESIGN AGENT SUPPORT (FMS FUNDED)'. This designation implies a range of specialized engineering services crucial for supporting defense systems intended for foreign military sales. These services likely encompass aspects of system design, modification, integration, testing, and technical documentation. Given the 'design agent' role, Boeing acts as a representative or agent for the government in managing and executing design-related activities for specific defense platforms or components being procured by allied nations through the FMS program. The exact scope would be detailed in the contract's Statement of Work (SOW), but it generally involves ensuring that the design meets the specified requirements, performance standards, and interoperability needs for the end-user nation.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type influence pricing and risk for this sole-source award?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (Boeing) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. For a sole-source award like this, CPFF can present a risk of cost escalation because the contractor is guaranteed their profit regardless of cost efficiency. While the 'fixed fee' component provides some cost certainty for the profit element, the 'cost plus' aspect means the government bears the risk of cost overruns. Effective oversight by the Defense Contract Management Agency (DCMA) is critical to scrutinize allowable costs and ensure the contractor exercises due diligence in managing expenses. Without competition, there's less inherent pressure on the contractor to minimize costs to secure a lower price.

What is the justification for awarding this significant engineering contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED', signifying a sole-source award. While the specific justification is not detailed in the abbreviated data, common reasons for sole-source awards in defense contracting include: unique capabilities or proprietary technology held by only one source, urgent and compelling needs where competition is impractical, or when the contract is a logical follow-on to a previous contract where another source could not perform the work. Given Boeing's role as a major defense contractor and the nature of 'design agent support' for FMS, it's plausible that the award was justified based on Boeing's existing knowledge, infrastructure, and established relationship with the specific defense systems involved in the FMS program, making them the only viable or most efficient provider.

How does this contract align with broader Department of Defense strategies for Foreign Military Sales (FMS)?

This contract directly supports the Department of Defense's Foreign Military Sales (FMS) program, which is a key component of U.S. foreign policy and national security strategy. The FMS program enables allies and partners to purchase U.S. defense articles, services, and training. By providing 'DESIGN AGENT SUPPORT (FMS FUNDED)', Boeing plays a crucial role in ensuring that the defense systems transferred to partner nations are properly supported, potentially modified, and integrated according to U.S. standards and the specific requirements of the buying nation. This support is vital for maintaining the effectiveness and interoperability of allied forces, thereby strengthening regional stability and U.S. influence. The long duration suggests a sustained commitment to supporting these FMS cases.

What are the potential risks associated with the long duration (2948 days) of this contract?

A contract duration of 2948 days (approximately 8 years) presents several potential risks. Firstly, it increases the likelihood of cost growth over time due to inflation, changes in labor rates, and potential unforeseen technical challenges that may arise during the extended period. Secondly, the longer the contract, the greater the risk of scope creep, where the requirements may evolve or expand beyond the original intent without adequate adjustments to cost and schedule, especially in a sole-source context. Thirdly, maintaining consistent oversight and performance management over such an extended period can be challenging for the contracting agency. Finally, technological advancements could render the supported systems or design approaches obsolete before the contract concludes, potentially diminishing the value delivered.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0017809R2005

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $44,234,357

Exercised Options: $44,234,357

Current Obligation: $37,188,770

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline