Naval Air Warfare Center awards $38M for aircraft structural component maintenance and repair to McDonnell Douglas Corporation

Contract Overview

Contract Amount: $38,069,228 ($38.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2002-07-19

End Date: 2010-12-21

Contract Duration: 3,077 days

Daily Burn Rate: $12.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200210!005742!1700!A8107 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3236 !A!N! !N! !20020719!20021231!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!60650!037!24!PATUXENT RIVER NAS !ST. MARY S !MARYLAND !+000003252827!N!N!000049320155!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!U!1!001!N!1A!C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $38.1 million to THE BOEING COMPANY for work described as: 200210!005742!1700!A8107 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3236 !A!N! !N! !20020719!20021231!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!60650!037!24!PATUXENT RIVER NAS !ST. M… Key points: 1. Contract awarded for essential aircraft structural component maintenance and repair services. 2. Significant duration of the contract suggests a long-term need for these services. 3. The contract's cost-plus-fixed-fee structure may incentivize contractor efficiency. 4. Awarded to a single, established contractor, raising questions about competition. 5. Services provided are critical for maintaining the operational readiness of naval aircraft. 6. The contract value indicates a substantial investment in aircraft sustainment.

Value Assessment

Rating: fair

The contract value of approximately $38 million over its duration is substantial for aircraft structural component maintenance. Without specific benchmarks for similar services or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the duration and nature of the services suggest a significant investment. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can sometimes lead to higher costs if not managed carefully, as the contractor is reimbursed for allowable costs plus a fixed fee. Benchmarking against other similar contracts for aircraft structural repair would be necessary for a more definitive assessment of pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source, or not competed, procedure. This means that only one contractor, McDonnell Douglas Corporation, was solicited and awarded the contract. The reasons for this sole-source award are not detailed in the provided data, but typically such awards are made when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a competitively awarded contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government did not benefit from the price reductions that often result from a competitive environment.

Public Impact

Naval aviation personnel benefit from the assurance of well-maintained aircraft structures. Services delivered ensure the structural integrity and airworthiness of naval aircraft. The geographic impact is primarily at Naval Air Station Patuxent River, Maryland, where the services are likely performed or managed. Workforce implications include employment for skilled technicians and engineers at McDonnell Douglas Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce the incentive for contractors to innovate or improve efficiency.
The long duration of the contract could indicate a lack of viable alternative solutions or a sustained reliance on a single provider.

Positive Signals

Contract ensures continued maintenance of critical aircraft structural components.
Award to an established contractor like McDonnell Douglas Corporation suggests a level of trust and proven capability.
The fixed-fee component of the CPFF contract provides some cost control for the government.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on the maintenance and repair of aircraft structural components. This is a critical sub-sector within the broader aerospace and defense industry, which is characterized by high technical expertise, stringent quality requirements, and significant government investment. The market for aircraft maintenance, repair, and overhaul (MRO) is substantial, with major defense contractors playing a key role. This contract represents a portion of the government's overall spending on sustaining its aging aircraft fleet, ensuring operational readiness and safety.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, McDonnell Douglas Corporation, is a large aerospace company. While large prime contractors often engage small businesses as subcontractors on various projects, the data does not specify any such arrangements for this particular contract. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this work were not prioritized.

Oversight & Accountability

Oversight for this contract would typically be managed by the Naval Air Systems Command (NAVAIR) and potentially the Defense Contract Management Agency (DCMA), given the nature of the services and the agency involved. Accountability measures would be embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally limited for sole-source contracts, especially concerning the justification for the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Engineering Services
Naval Aviation Sustainment
Defense Contractor Services
Aircraft Structural Components

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus-fixed-fee structure carries inherent cost overrun risk.
Long contract duration may lead to obsolescence or reduced innovation.
Lack of detailed performance data limits value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.1 million to THE BOEING COMPANY. 200210!005742!1700!A8107 !NAVAL AIR WARFARE CENTER, AIRCRA!N0042102C3236 !A!N! !N! !20020719!20021231!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!60650!037!24!PATUXENT RIVER NAS !ST. MARY S !MARYLAND !+000003252827!N!N!000049320155!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $38.1 million.

What is the period of performance?

Start: 2002-07-19. End: 2010-12-21.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under a 'NOT COMPETED' (CT='NOT COMPETED') procedure, signifying a sole-source award. Specific justifications for sole-source awards typically fall into categories such as only one responsible source being available, urgent and compelling needs, or specific national defense requirements. Without further documentation or context beyond the basic contract data, the precise reason for not competing this award to McDonnell Douglas Corporation remains undisclosed. Common reasons include unique technical capabilities, proprietary technology, or a critical need that could not be met through a competitive process within the required timeframe. Understanding this justification is crucial for assessing whether the sole-source award was appropriate and in the best interest of the government.

How does the cost-plus-fixed-fee (CPFF) structure impact the overall cost-effectiveness of this contract?

The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor, McDonnell Douglas Corporation, is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex services where the scope of work is not precisely defined at the outset. For taxpayers, the CPFF structure can be a double-edged sword. While the fixed fee provides some predictability in contractor profit, the reimbursement of all allowable costs means the government bears the risk of cost overruns. Effective oversight and stringent cost controls by the Naval Air Warfare Center are essential to ensure that costs remain reasonable and that the contractor operates efficiently. Without robust oversight, there is a risk that costs could escalate beyond what might be incurred under a fixed-price contract.

What is the historical spending pattern for aircraft structural component maintenance and repair at the Naval Air Warfare Center?

The provided data represents a single contract awarded in 2002 for aircraft structural component maintenance and repair. To understand historical spending patterns, one would need to analyze a broader dataset encompassing multiple contracts over several fiscal years for the Naval Air Warfare Center (NAWC) and similar naval aviation commands. This would involve identifying all contracts with the Product Service Code (PSC) related to aircraft maintenance and repair, particularly those focused on structural components. Analyzing the total obligated amounts, contract durations, and award types (competed vs. sole-source) over time would reveal trends in spending, identify key contractors, and highlight any shifts in procurement strategies. Without this broader dataset, it is impossible to establish a definitive historical spending pattern from this single data point.

What are the potential risks associated with a long-duration contract for aircraft structural maintenance?

A long-duration contract, such as this one spanning from 2002 to 2010 (over 8 years), for aircraft structural maintenance carries several potential risks. Firstly, technological advancements in aircraft design or repair techniques could render the contracted methods or materials obsolete during the contract's term, leading to inefficiencies or the need for costly modifications. Secondly, the long timeframe might reduce the incentive for the contractor to innovate or seek cost-saving efficiencies, as they are locked into a specific arrangement. Thirdly, the government's needs or priorities could shift over such a long period, potentially making the contracted services less relevant or requiring adjustments that are difficult to implement within the existing sole-source framework. Finally, prolonged reliance on a single contractor can create vendor lock-in, making it difficult and potentially more expensive to switch providers in the future.

How does the contractor, McDonnell Douglas Corporation, perform on other government contracts?

McDonnell Douglas Corporation, prior to its acquisition by Boeing in 1997, was a major defense contractor with a long history of performance on complex government programs. Information on its specific performance for this particular contract (N0042102C3236) is not detailed in the provided data snippet, beyond the fact that it was awarded and presumably executed. To assess their track record, one would need to examine performance reviews, past performance questionnaires, and any documented issues or successes on this and other contracts awarded to McDonnell Douglas (and subsequently Boeing) for similar services. Factors to consider include on-time delivery, quality of work, adherence to budget (especially relevant for CPFF), and responsiveness to government requirements. A comprehensive review would involve accessing contract data systems that track contractor performance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline