Boeing awarded $76M for Aileron Assembly, AI, with no competition

Contract Overview

Contract Amount: $75,968,766 ($76.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2022-01-28

End Date: 2025-12-31

Contract Duration: 1,433 days

Daily Burn Rate: $53.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AILERON ASSEMBLY,AI

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $76.0 million to THE BOEING COMPANY for work described as: AILERON ASSEMBLY,AI Key points: 1. The contract's value of $76M for a specific aircraft part raises questions about cost-effectiveness without competitive bidding. 2. The sole-source nature of this award limits price discovery and potentially increases the financial burden on the government. 3. The duration of the contract (over 3 years) suggests a long-term need, but the lack of competition throughout this period is a concern. 4. Performance context is limited as this is a delivery order, implying it's part of a larger, potentially established, contract vehicle. 5. The award falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the aerospace industry. 6. The absence of small business set-aside flags indicates this award did not prioritize small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this specific 'AILERON ASSEMBLY,AI' is challenging without detailed specifications and market comparisons. However, a $76M award for a single component, especially when procured sole-source, warrants scrutiny. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if there's an opportunity for cost savings through alternative sourcing or negotiation. The fixed-price nature provides some cost certainty, but the initial price point is the primary concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), they inherently reduce price competition and may lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for this aileron assembly, as there was no market pressure to drive down the price. This could represent a less efficient use of taxpayer funds compared to a competitively awarded contract.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive the critical aileron assemblies for its aircraft. The services delivered are the manufacturing and supply of specialized aircraft components, essential for maintaining naval aviation readiness. The geographic impact is primarily centered around the contractor's facilities in Missouri, where the manufacturing is likely to occur. Workforce implications include the potential for skilled manufacturing jobs at Boeing and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Lack of transparency in the justification for sole-sourcing.
Potential for cost overruns if pricing was not adequately scrutinized.
Dependency on a single supplier for a critical component.

Positive Signals

Award to a known, established aerospace manufacturer (Boeing).
Fixed-price contract type offers some cost predictability.
Delivery order mechanism suggests integration into existing procurement vehicles.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a vital segment of the broader aerospace industry, characterized by high technological demands and stringent quality requirements. This contract for aileron assemblies fits squarely within this domain, supplying a critical component for aircraft. The market is often dominated by a few large, established players like Boeing, especially for specialized parts tied to specific platforms. Benchmarking spending in this niche is difficult without knowing the exact aircraft platform, but significant investments are typical for defense aerospace components.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from this specific award. The absence of a small business set-aside suggests that the procurement was either not suitable for small business participation or that opportunities for small businesses were not prioritized in this instance.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to internal review and potentially oversight by the Government Accountability Office (GAO) if protested. Transparency is limited due to the non-competitive nature, but contract modifications and performance reports would be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Aerospace Components
Sole-Source Contracts
Department of the Navy Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to lack of competition.
Supply chain risk associated with single-source dependency.
Limited transparency in procurement justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.0 million to THE BOEING COMPANY. AILERON ASSEMBLY,AI

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 $76.0 million.

What is the period of performance?

Start: 2022-01-28. End: 2025-12-31.

What is the specific aircraft platform for which these aileron assemblies are intended, and how does this influence the sole-source justification?

The provided data does not specify the exact aircraft platform for which the 'AILERON ASSEMBLY,AI' is intended. However, the sole-source justification for such a critical and specialized component often relates to proprietary designs, unique manufacturing processes, or integration requirements specific to a particular military aircraft. For instance, if these aileron assemblies are designed for a unique or legacy platform where only Boeing possesses the necessary tooling, technical data, and expertise, a sole-source award might be deemed necessary to ensure compatibility and operational readiness. Without this specific platform information, it is difficult to definitively assess the validity of the sole-source justification beyond general principles.

How does the $76 million contract value compare to historical spending on similar aileron assemblies or related aircraft components?

Direct comparison of the $76 million contract value for 'AILERON ASSEMBLY,AI' to historical spending on similar components is challenging without more granular data. The term 'AILERON ASSEMBLY,AI' is specific, and its cost is highly dependent on the aircraft platform, materials, complexity, and quantity. Historical data for 'other aircraft parts' can be broad. However, a $76 million award for a single component type, especially when procured sole-source, suggests a significant investment. To provide a meaningful comparison, one would need to identify contracts for aileron assemblies for comparable military aircraft, analyze their unit costs, and consider inflation and market trends. The lack of competition here makes direct benchmarking against market rates difficult.

What are the key performance indicators (KPIs) or metrics used to evaluate Boeing's performance under this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or metrics for this contract. However, for aircraft component manufacturing contracts, typical KPIs often include on-time delivery rates, adherence to quality specifications (e.g., defect rates, compliance with technical drawings), material conformity, and overall production efficiency. For a fixed-price contract, meeting delivery schedules and quality standards without exceeding the agreed-upon price are paramount. The Department of the Navy would likely monitor these aspects through regular reporting from Boeing and potentially through source inspections or acceptance testing of the delivered aileron assemblies.

What is the risk assessment associated with relying on a single supplier (Boeing) for this critical aircraft component?

The primary risk associated with relying on a single supplier for a critical aircraft component like an aileron assembly is supply chain disruption. If Boeing faces production issues, labor strikes, natural disasters, or other unforeseen events, the delivery of these essential parts could be halted, impacting naval aviation readiness. Furthermore, the lack of competition can lead to price escalation over time, as the government has limited leverage to negotiate better terms. There's also a risk of technological obsolescence if the sole-source supplier does not invest in modernization or if alternative, superior technologies emerge that cannot be easily integrated due to the existing sole-source relationship.

Can the government terminate this contract for convenience or default, and what are the implications?

Yes, federal contracts typically include clauses allowing the government to terminate for convenience or default. Termination for convenience allows the government to end the contract for any reason, usually with compensation to the contractor for work performed and reasonable termination costs. Termination for default occurs if the contractor fails to meet contract requirements (e.g., delivery, quality). In such cases, the government may seek damages. For this sole-source contract, terminating for convenience would likely involve finding an alternative source, which could be complex and costly given the specialized nature of the component. Termination for default would necessitate a rigorous process to ensure justification and could lead to significant delays and potential reprocurement costs.

What is the historical spending trend for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Navy?

Historical spending trends for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Navy are substantial, reflecting the significant investment required to maintain a modern naval aviation fleet. While specific figures fluctuate annually based on defense budgets, modernization programs, and operational tempo, this category consistently represents a multi-billion dollar segment of the Navy's procurement. The Navy relies heavily on specialized components for its diverse range of aircraft, from fighter jets to transport planes and helicopters. Spending in this area is influenced by factors such as the service life of existing platforms, the introduction of new technologies, and readiness requirements. Analyzing trends requires access to detailed historical contract databases to identify patterns in specific part categories and overall sector investment.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038320RN487

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $75,968,766

Exercised Options: $75,968,766

Current Obligation: $75,968,766

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,082,326

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038317GA301

IDV Type: BOA

Timeline