Boeing awarded $103.9M sole-source contract for Aileron Assembly, AI, with delivery through late 2028

Contract Overview

Contract Amount: $103,873,136 ($103.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-06-17

End Date: 2028-12-31

Contract Duration: 1,658 days

Daily Burn Rate: $62.6K/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 CITY County, MISSOURI, 63166

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $103.9 million to THE BOEING COMPANY for work described as: AILERON ASSEMBLY,AI Key points: 1. Contract awarded to a single, established supplier, raising questions about price competitiveness. 2. The firm fixed-price structure aims to control costs, but lacks competitive pressure for further savings. 3. Long contract duration suggests a critical, long-term need for these aircraft parts. 4. Sole-source award indicates potential barriers to entry for other manufacturers. 5. Focus on a specific component (Aileron Assembly) highlights specialized defense manufacturing needs. 6. The contract's value is substantial, requiring careful monitoring of performance and delivery.

Value Assessment

Rating: fair

Benchmarking the value of this specific aileron assembly is challenging without detailed technical specifications and market comparisons. However, a $103.9 million award for a single component over nearly five years suggests a significant investment. The firm fixed-price nature provides cost certainty for the government, but the lack of competition means there's no direct market pressure to drive down unit prices. Without comparable sole-source awards for similar complex aircraft components, assessing true value-for-money is difficult.

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 typically occurs when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices through market forces or encouraged innovation from multiple suppliers.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competition, potentially leading to higher costs for taxpayers compared to a competed contract.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Navy, ensuring the continued availability of critical aircraft components. This contract supports the production and maintenance of specific aircraft platforms requiring these aileron assemblies. The contract's geographic impact is centered around The Boeing Company's facilities in Missouri, supporting local employment and the regional aerospace ecosystem. It sustains specialized manufacturing jobs within the aerospace sector, particularly in the production of complex aircraft parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Long-term contract duration may reduce flexibility if requirements change.
Dependence on a single supplier creates supply chain risk.
Lack of competition could stifle innovation in aileron assembly technology.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a major, established defense contractor suggests a high likelihood of successful delivery.
Long duration indicates a stable, ongoing requirement for critical components.
Specific component focus suggests deep expertise from the contractor.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' subsector (NAICS 336413). The defense segment of this sector is heavily reliant on a few large prime contractors and their specialized suppliers. Spending in this area is driven by military readiness requirements and the lifecycle of aging aircraft fleets. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for major aircraft components to established manufacturers.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb': false. The prime contractor, The Boeing Company, is a large aerospace manufacturer. While Boeing may utilize small businesses in its supply chain for this contract, the primary award is not directed towards small businesses. There is no explicit indication of subcontracting goals for small businesses within the provided data, which could represent a missed opportunity to foster small business participation in this significant defense 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 embedded in the firm fixed-price contract terms, requiring delivery of specified aileron assemblies. Transparency is generally limited for sole-source defense contracts, though contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Aerospace Industry
Sole-Source Contracts
Naval Aviation Support

Risk Flags

Sole-source award limits competition.
Long contract duration increases risk of obsolescence or changing requirements.
Lack of detailed cost breakdown hinders value assessment.
Potential for supply chain disruption if contractor faces issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.9 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 $103.9 million.

What is the period of performance?

Start: 2024-06-17. End: 2028-12-31.

What is the historical spending pattern for Aileron Assemblies, AI, by the Department of the Navy?

Analyzing historical spending for 'Aileron Assembly, AI' specifically is challenging without more granular data. However, the Department of the Navy consistently spends billions annually on aircraft procurement, modification, and sustainment. This includes a wide array of components, from engines to structural parts like ailerons. The provided data indicates a single, large award in 2024 for this specific component. To understand historical patterns, one would need to examine past contracts for similar components, potentially looking at broader categories like 'Aircraft Parts' or 'Airframe Components' awarded to The Boeing Company or other major defense aircraft manufacturers over the last 5-10 years. This would reveal trends in contract values, durations, and competition levels for sustainment and upgrade programs.

What are the specific technical requirements and performance standards for this Aileron Assembly, AI?

The provided data does not include specific technical requirements or performance standards for the Aileron Assembly, AI. These details are typically found within the contract's Statement of Work (SOW) or technical specifications, which are not publicly available in this summary. For a defense contract of this nature, performance standards would likely relate to material integrity, aerodynamic tolerances, durability under various flight conditions (temperature, stress, fatigue), and compatibility with specific aircraft models. The 'AI' designation might refer to a specific aircraft platform or a modification thereof. Understanding these technical aspects is crucial for a comprehensive assessment of the contract's value and the contractor's ability to meet critical defense needs.

How does the unit cost of this Aileron Assembly compare to similar components in the market or other government contracts?

Directly comparing the unit cost of this Aileron Assembly is not possible with the given data. The contract is a firm fixed-price award for a total value of $103,873,136 over a period of 1658 days (approximately 4.5 years). The number of units to be delivered is not specified (indicated by 'no': 1, which likely refers to the number of delivery orders or contract line items, not units). Furthermore, as a sole-source award to The Boeing Company, there is no competitive benchmark. To assess unit cost, one would need the total quantity of aileron assemblies to be delivered and compare it to publicly available data on similar components, which is often difficult to obtain for specialized defense parts. Benchmarking would ideally involve comparing to other sole-source awards for comparable complexity or, if possible, to commercial aviation equivalents, though defense specifications often drive higher costs.

What is The Boeing Company's track record with similar sole-source contracts for aircraft components?

The Boeing Company has an extensive track record with sole-source and limited-competition contracts for aircraft components, particularly within the defense sector. As a primary manufacturer of numerous military aircraft platforms, they are often the sole source for highly specialized parts integral to those systems. Historical data would likely show numerous awards for various aircraft sub-assemblies and components across different branches of the military. Assessing their track record involves reviewing past performance evaluations, on-time delivery rates, and any instances of cost overruns or quality issues on similar sole-source agreements. Given their long-standing relationship with the DoD and their position as a major defense industrial base supplier, their general track record on such contracts is typically robust, though specific contract performance can vary.

What are the potential risks associated with the long duration (over 4.5 years) of this contract?

The long duration of this contract, spanning from June 2024 to December 2028, presents several potential risks. Firstly, technological obsolescence is a concern; aircraft technology evolves, and a component designed years ago might become less relevant or require upgrades. Secondly, economic volatility could impact the cost of raw materials or labor over such an extended period, potentially straining the fixed-price agreement if not adequately accounted for. Thirdly, changes in military requirements or strategic priorities could lead to a reduced need for the specific aircraft platform, making the remaining duration of the contract less efficient. Finally, a prolonged sole-source arrangement can reduce the incentive for the contractor to innovate or improve efficiency over time, as competitive pressure is absent.

Are there any specific Inspector General (IG) reports or audits related to The Boeing Company's contracts with the Department of Defense that might be relevant?

While there isn't a specific IG report mentioned for this exact 'Aileron Assembly, AI' contract, the Department of Defense Office of Inspector General (DoD OIG) frequently audits and investigates various aspects of contracts awarded to major defense contractors, including The Boeing Company. These reports often focus on areas such as contract pricing, cost allowability, performance, and compliance with regulations. Searching the DoD OIG's public reports database for 'The Boeing Company' would likely reveal numerous audits and investigations covering a range of its contracts. These reports can provide valuable insights into potential systemic issues, best practices, or areas of concern regarding contractor performance and financial management that could indirectly inform the oversight of this current contract.

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: $211,986,000

Exercised Options: $211,986,000

Current Obligation: $103,873,136

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $5,575,125

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038322GYY01

IDV Type: BOA

Timeline