Boeing awarded $89.4M for aircraft parts, raising questions about competition and value
Contract Overview
Contract Amount: $89,351,118 ($89.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2022-09-27
End Date: 2026-06-30
Contract Duration: 1,372 days
Daily Burn Rate: $65.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FLAP,WING LANDING
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $89.4 million to THE BOEING COMPANY for work described as: FLAP,WING LANDING Key points: 1. The contract's value, while substantial, warrants scrutiny given the lack of competitive bidding. 2. Sole-source awards can lead to inflated prices and reduced innovation. 3. The duration of the contract (over 4 years) suggests a long-term need for these parts. 4. Performance context is limited without details on specific parts or their criticality. 5. This contract falls within the 'Other Aircraft Parts' manufacturing sector. 6. The absence of small business set-asides or subcontracting plans is noted.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without knowing the specific parts and their market rates. However, the absence of competition for an $89.4 million award is a significant red flag. Typically, competitive bidding drives down costs and ensures fair market pricing. Without this process, there's a higher risk of overpayment. Further analysis would require comparing the unit prices of these parts to similar procurements or commercial equivalents, if available.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple qualified vendors. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they significantly limit price discovery and can reduce the government's leverage in negotiations.
Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as competition is a key driver for cost savings in government contracting.
Public Impact
The Department of the Navy is the primary beneficiary, receiving essential aircraft parts. This contract supports the operational readiness of naval aviation fleets. The geographic impact is primarily centered around Boeing's facilities in Missouri. The contract supports jobs within the aerospace manufacturing sector, specifically at Boeing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition for a large dollar award increases risk of overpayment.
- Sole-source awards can stifle innovation by not encouraging new market entrants.
- Limited transparency into the justification for sole-source award.
- No indication of small business participation or subcontracting goals.
Positive Signals
- Award to a major, established aerospace manufacturer suggests a degree of reliability.
- Firm Fixed Price contract type provides cost certainty for the government.
- Long-term contract (over 4 years) indicates a sustained need and potential for stable supply.
Sector Analysis
This contract falls within the aerospace manufacturing sector, specifically focusing on aircraft parts. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category (NAICS 336413) encompasses a wide range of components. The total federal spending in this sector can be substantial, driven by defense and civilian aviation needs. Benchmarking this specific award against broader sector spending requires detailed analysis of comparable parts and quantities, but the $89.4 million figure indicates a significant procurement.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans. This suggests that the primary awardee, The Boeing Company, will likely fulfill the contract requirements directly, with limited or no direct benefit to the small business ecosystem through subcontracting opportunities on this specific award.
Oversight & Accountability
Oversight for this contract would typically 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 by the sole-source nature, but contract award details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Parts Procurement
- Naval Aviation Support
- Aerospace Manufacturing Contracts
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award for a significant dollar amount.
- Lack of transparency regarding justification for sole-source.
- No indication of small business participation.
Tags
defense, department-of-the-navy, the-boeing-company, sole-source, firm-fixed-price, aircraft-parts, missouri, other-aircraft-parts-and-auxiliary-equipment-manufacturing, large-contract, non-competitive
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $89.4 million to THE BOEING COMPANY. FLAP,WING LANDING
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 $89.4 million.
What is the period of performance?
Start: 2022-09-27. End: 2026-06-30.
What specific aircraft parts are being procured under this contract, and what is their criticality to naval operations?
The provided data does not specify the exact aircraft parts covered by this $89.4 million contract. The NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' is broad and can include everything from complex engine components to smaller structural elements or electronic systems. The criticality of these parts to naval operations is also not detailed. Understanding the specific components and their role in maintaining aircraft readiness is crucial for assessing the true value and necessity of this sole-source award. Without this information, it's difficult to determine if alternative suppliers or parts could have been sourced competitively.
What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The justification for this sole-source award is not provided in the data. Typically, sole-source procurements are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. For a contract of this magnitude ($89.4 million), a detailed justification document would normally be required, outlining why competition was not feasible or practicable. Without this justification, it raises concerns about whether the government adequately explored competitive options or if there were specific proprietary or technical reasons that precluded competition.
How does the pricing structure (Firm Fixed Price) and duration of this contract compare to similar sole-source awards for aircraft parts?
The contract is awarded under a Firm Fixed Price (FFP) type, which is generally favorable for the government as it shifts cost risk to the contractor and provides budget certainty. However, without knowing the specific parts and their market value, it's difficult to benchmark the FFP against similar sole-source awards. Sole-source contracts, by their nature, lack the price discovery mechanism of competition, potentially leading to higher prices than if multiple bids were received. The duration of over four years (September 2022 to June 2026) is substantial for an aircraft parts contract. A comparative analysis would require access to data on other sole-source FFP contracts for comparable aircraft components procured by the Department of Defense or other agencies.
What is the historical spending pattern for aircraft parts from The Boeing Company by the Department of the Navy?
The provided data focuses on a single contract award and does not offer historical spending patterns. To assess historical spending, one would need to query federal procurement databases for all contracts awarded to The Boeing Company by the Department of the Navy for aircraft parts (or under NAICS code 336413) over several fiscal years. Analyzing this historical data would reveal trends in contract volume, average award values, and the proportion of competitive versus sole-source awards. This context is essential to understand if this $89.4 million sole-source award is an anomaly or part of a larger pattern of non-competitive procurements from Boeing for these types of parts.
Are there any performance risks associated with The Boeing Company's ability to deliver these aircraft parts on time and to specification?
The data provided does not include specific performance risk indicators for The Boeing Company on this contract. However, as a major, established aerospace manufacturer with a long history of government contracts, Boeing generally possesses significant capabilities. The primary risk factor highlighted by the data is the sole-source nature of the award, which, while not a direct performance risk, can indirectly impact value and potentially lead to complacency if not managed rigorously. Standard contract oversight, including monitoring delivery schedules and quality control, would be in place. Any specific performance concerns would typically be documented in past performance reviews or contract administration records, which are not available here.
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: N0038322RT103
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: $119,134,832
Exercised Options: $119,134,832
Current Obligation: $89,351,118
Subaward Activity
Number of Subawards: 18
Total Subaward Amount: $2,091,660
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0038322GYY01
IDV Type: BOA
Timeline
Start Date: 2022-09-27
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2024-08-01
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