Boeing awarded $85M contract for aircraft parts, highlighting ongoing defense supply chain needs
Contract Overview
Contract Amount: $85,069,880 ($85.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-09-12
End Date: 2025-12-23
Contract Duration: 833 days
Daily Burn Rate: $102.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PARTS KIT,LANDING G
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $85.1 million to THE BOEING COMPANY for work described as: PARTS KIT,LANDING G Key points: 1. Contract value represents a significant investment in maintaining naval aviation readiness. 2. Sole awardee suggests potential for limited competition or specialized manufacturing capabilities. 3. Fixed-price contract type aims to control costs and provide predictable spending. 4. Long performance period indicates a sustained need for these critical aircraft components. 5. Awarded by the Department of the Navy, underscoring its role in supporting fleet operations. 6. The contract falls under the 'Other Aircraft Parts' manufacturing category, indicating specialized components.
Value Assessment
Rating: good
The $85 million contract for aircraft parts appears reasonable given the long performance period and the specialized nature of defense components. Benchmarking against similar sole-source or limited-competition awards for complex aircraft parts would provide further context. The firm fixed-price structure is a positive indicator for cost control. Without specific per-unit data or comparison to commercial equivalents, a precise value-for-money assessment is challenging, but the award seems aligned with typical defense procurement for such items.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the award to a single entity, The Boeing Company, suggests that either Boeing was the only bidder that met all requirements, or it offered the most advantageous proposal. The level of competition, while initially broad, resulted in a single award, which may warrant further investigation into the specific technical or capability requirements that narrowed the field.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing. However, when only one bid is received or accepted, the potential for price savings is diminished compared to scenarios with multiple strong contenders.
Public Impact
Naval aviation units will benefit from the continued availability of essential aircraft parts, ensuring operational readiness. The contract supports the maintenance and sustainment of critical aircraft platforms within the U.S. Navy. The geographic impact is primarily centered in Missouri, where the contractor is located, potentially supporting local jobs. The contract sustains employment within the aerospace manufacturing sector, particularly for specialized parts production.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for sole-source reliance if competition was de facto limited despite 'full and open' designation.
- Long contract duration could lead to price increases if market conditions change significantly.
- Dependence on a single contractor for critical parts could pose supply chain risks.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- Awarded under full and open competition, suggesting an effort to maximize value.
- Long-term award supports sustained readiness and predictable supply of essential components.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. This contract for aircraft parts fits within the broader 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry, which is a crucial segment supporting the operational readiness of military fleets. Spending in this area is often driven by sustainment requirements for aging aircraft and the introduction of new platforms. Comparable spending benchmarks would typically involve analyzing historical awards for similar part types and quantities across different military branches.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless Boeing voluntarily engages small businesses in its supply chain for this specific contract.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, requiring delivery of specified parts. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- Naval Aviation Maintenance Program
- Aircraft Component Sustainment Contracts
- Defense Logistics Agency (DLA) Parts Procurement
- Airframe Component Manufacturing Contracts
Risk Flags
- Potential for limited competition despite 'full and open' designation.
- Long contract duration may increase exposure to market volatility.
- Dependence on a single prime contractor for critical components.
Tags
defense, department-of-the-navy, aircraft-parts, firm-fixed-price, full-and-open-competition, missouri, aerospace, sustainment, landing-gear, prime-contractor
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $85.1 million to THE BOEING COMPANY. PARTS KIT,LANDING G
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 $85.1 million.
What is the period of performance?
Start: 2023-09-12. End: 2025-12-23.
What is The Boeing Company's track record with the Department of Defense, specifically for aircraft parts?
The Boeing Company has a long and extensive history as a prime contractor for the Department of Defense, particularly in aircraft manufacturing and sustainment. They are a major supplier of various aircraft platforms and associated components to all branches of the U.S. military. For aircraft parts, Boeing typically holds numerous contracts, ranging from individual component replacements to large-scale sustainment packages. Their track record generally includes delivering complex systems and parts, though like any large defense contractor, they have faced scrutiny over cost, schedule, and performance on specific programs. Analyzing their past performance on similar firm-fixed-price contracts for aircraft parts would provide a clearer picture of their reliability and efficiency in fulfilling such requirements.
How does the $85 million contract value compare to similar aircraft parts contracts awarded by the Navy?
Comparing the $85 million contract value requires context regarding the specific types of parts, quantities, and the duration of the contract. The provided data indicates 'PARTS KIT,LANDING G,' suggesting components related to landing gear. The contract duration is approximately 2 years (September 2023 to December 2025). The Navy procures a vast array of aircraft parts, with contract values varying significantly. A $85 million award over two years for specialized landing gear kits is substantial but not necessarily outside the norm for major defense platforms. Benchmarking would involve looking at other awards for similar complex systems (e.g., engine components, avionics, structural parts) over comparable timeframes. Awards for high-volume, less complex parts would naturally be lower, while contracts for entire system overhauls or new development could be significantly higher.
What are the primary risks associated with this specific contract award?
The primary risks associated with this contract include supply chain disruptions, potential for cost overruns if the firm fixed-price model doesn't adequately account for unforeseen material or labor cost increases, and technical obsolescence of parts over the contract's lifespan. Given that Boeing is the awardee, there's also a risk of over-reliance on a single large contractor, which can reduce leverage in future negotiations. Furthermore, if the 'full and open competition' resulted in only one viable bidder, it suggests potential market concentration or high barriers to entry for competitors, which could indicate future risks in maintaining a competitive landscape for these critical parts.
How effective is the firm fixed-price contract type in ensuring value for money for this aircraft parts procurement?
The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and risks are understood. For standardized or readily manufacturable aircraft parts like landing gear kits, FFP shifts the risk of cost overruns to the contractor (Boeing). This incentivizes Boeing to manage its costs efficiently to maximize profit. If Boeing underbids or faces unexpected cost increases, their profit margin shrinks, but the government's price remains fixed. The effectiveness hinges on the accuracy of the initial pricing and the government's ability to clearly define specifications. If specifications are vague or change orders become frequent, the FFP advantage can diminish.
What are the historical spending patterns for aircraft parts by the Department of the Navy?
Historical spending patterns for aircraft parts by the Department of the Navy are substantial and consistent, reflecting the continuous need to maintain a large and complex aviation fleet. The Navy consistently allocates billions of dollars annually towards aircraft sustainment, which includes the procurement of spare parts, components, and repair services. Spending is driven by factors such as the age of aircraft platforms, operational tempo, planned upgrades, and the introduction of new technologies. Major spending categories include engines, airframes, avionics, and specialized systems like landing gear. Contracts for parts can range from small, individual orders to multi-year, multi-billion dollar agreements with prime contractors like Boeing, Lockheed Martin, and others, often awarded through competitive processes or as sole-source buys for unique components.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $173,611,984
Exercised Options: $173,611,984
Current Obligation: $85,069,880
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $64,385,305
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: N0038322GYY01
IDV Type: BOA
Timeline
Start Date: 2023-09-12
Current End Date: 2025-12-23
Potential End Date: 2025-12-23 00:00:00
Last Modified: 2025-12-10
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