Boeing awarded $142.8M for mechanical actuators, with contract performance extending through June 2026

Contract Overview

Contract Amount: $142,781,070 ($142.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-09-22

End Date: 2026-06-17

Contract Duration: 999 days

Daily Burn Rate: $142.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACTUATOR,MECHANICAL

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $142.8 million to THE BOEING COMPANY for work described as: ACTUATOR,MECHANICAL Key points: 1. The contract value represents a significant investment in critical aircraft components. 2. Sole-source procurement raises questions about potential price inflation and limited market engagement. 3. The fixed-price contract type aims to control costs, but the absence of competition may negate this benefit. 4. Performance is situated within the broader defense industrial base, supporting naval aviation readiness. 5. The duration of the contract suggests a long-term need for these specialized parts. 6. The contractor, Boeing, is a major defense supplier with extensive experience in aerospace manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data for identical mechanical actuators. The firm fixed-price structure is a positive indicator for cost control, but without competitive bidding, it's difficult to ascertain if the $142.8 million represents optimal value for the government. Further analysis would require access to historical pricing for similar components or internal cost estimates.

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 is typically used when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the potential for competitive pressure on pricing is removed.

Public Impact

The primary beneficiaries are the Department of the Navy, which will receive essential aircraft parts to maintain its fleet's operational readiness. The services delivered include the provision of mechanical actuators, critical components for aircraft functionality. The geographic impact is primarily within the United States, supporting naval aviation operations. Workforce implications include continued employment for skilled manufacturing personnel at Boeing facilities involved in production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in pricing.
Dependence on a single supplier could create supply chain risks.
Contract duration might lock in potentially suboptimal terms.

Positive Signals

Firm fixed-price contract type helps manage cost certainty.
Contractor (Boeing) has a strong track record in aerospace manufacturing.
Award supports critical defense capabilities and readiness.
Long-term contract indicates a stable demand for the product.

Sector Analysis

The aerospace manufacturing sector, specifically focusing on aircraft parts, is a critical component of the defense industrial base. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry code (NAICS 336413). The market for specialized aircraft components is often characterized by high barriers to entry, significant R&D investment, and stringent quality requirements, leading to a concentrated supplier base. Spending in this area is directly tied to defense procurement cycles and fleet modernization efforts.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the prime contractor being The Boeing Company, a large aerospace firm, the likelihood of significant subcontracting opportunities for small businesses is uncertain without further details on Boeing's subcontracting plan. Analysis of prime contractor subcontracting reports would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. The firm fixed-price nature provides some cost control oversight. Transparency is limited due to the sole-source award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but day-to-day performance and value oversight rests with the agency.

Related Government Programs

Naval Aviation Maintenance Programs
Aircraft Component Procurement
Defense Logistics Agency (DLA) Support
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $142.8 million to THE BOEING COMPANY. ACTUATOR,MECHANICAL

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 $142.8 million.

What is the period of performance?

Start: 2023-09-22. End: 2026-06-17.

What is Boeing's historical performance record with the Department of the Navy on similar contracts?

The Boeing Company has a long-standing and extensive relationship with the Department of the Navy, supplying a wide array of aircraft, components, and services. Historically, Boeing has generally met performance requirements, though like any large defense contractor, it has faced scrutiny over cost, schedule, and technical performance on specific programs. For mechanical actuators, specific performance metrics and past delivery records would need to be examined through contract performance reports (e.g., CPARS) and delivery data. Without access to these specific records for this contract or directly comparable ones, a definitive assessment of 'track record' for this precise item is limited. However, Boeing's overall standing as a major, experienced aerospace manufacturer suggests a baseline capability to produce such components.

How does the awarded price compare to market rates for similar mechanical actuators?

Determining the precise market rate for these specific mechanical actuators is challenging due to the sole-source nature of this award and the proprietary details often associated with specialized aerospace components. Generally, sole-source contracts lack the competitive pressure that drives prices down to market levels. To benchmark effectively, one would need access to data on similar actuators procured competitively by the government or commercial entities, or detailed cost breakdowns from Boeing. Given the absence of competition, it is plausible that the price may be higher than what could be achieved through a competitive bidding process. The firm fixed-price structure aims to cap the government's liability, but the initial price point's competitiveness remains a key question.

What are the primary risks associated with this sole-source contract for mechanical actuators?

The primary risks associated with this sole-source contract are centered around cost and supplier dependency. Firstly, the lack of competition means the Department of the Navy may be paying a premium price, as there was no market pressure to offer the lowest possible cost. Secondly, relying solely on The Boeing Company for these critical actuators creates a single point of failure in the supply chain; any production issues, delays, or unforeseen cost increases at Boeing could directly impact naval readiness. Thirdly, without competitive benchmarking, there's a risk that the technology or specifications might not represent the most advanced or cost-effective solutions available in the broader market. Finally, the long contract duration could lock the Navy into terms that become unfavorable over time.

What is the expected impact of this contract on naval aviation readiness?

This contract is expected to have a positive impact on naval aviation readiness by ensuring a steady supply of critical mechanical actuators. These components are essential for the proper functioning of various aircraft systems, and their availability directly affects the operational status of naval aircraft. By securing these parts through a multi-year contract, the Navy aims to prevent shortages and maintain the airworthiness of its fleet. The timely delivery of these actuators will support scheduled maintenance, repair activities, and overall fleet availability, thereby bolstering the Navy's capability to conduct its missions.

How does this contract's value compare to overall Navy spending on aircraft parts?

The $142.8 million awarded to Boeing for mechanical actuators represents a specific investment within the broader category of aircraft parts and components for the Department of the Navy. The Navy's total annual spending on aircraft parts, maintenance, and related services runs into the billions of dollars, encompassing a vast array of components, materials, and support activities across its diverse fleet. Therefore, while $142.8 million is a substantial sum for a single contract, it constitutes a fraction of the Navy's overall aircraft parts expenditure. Its significance lies in the criticality of the specific component (mechanical actuators) rather than its proportion of total spending.

What oversight mechanisms are in place to ensure performance and prevent cost overruns?

Oversight for this contract is primarily managed by the Department of the Navy's program and contracting officials. The firm fixed-price (FFP) contract type itself serves as a primary cost control mechanism, as it shifts the risk of cost overruns to the contractor, The Boeing Company. The Navy will monitor Boeing's performance against contract milestones and delivery schedules. Contract surveillance, quality assurance inspections, and potentially Earned Value Management (EVM) if applicable, would be employed to track progress and identify potential issues early. While the sole-source nature limits competitive oversight, the agency's internal processes and the FFP structure provide a framework for managing performance and costs.

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

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: $221,366,000

Exercised Options: $221,366,000

Current Obligation: $142,781,070

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $210,926,755

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038322GYY01

IDV Type: BOA

Timeline