DoD awards Boeing $53.4M for ECP Inlets Kits, raising concerns over sole-source procurement
Contract Overview
Contract Amount: $53,454,854 ($53.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-04-30
End Date: 2028-08-31
Contract Duration: 2,680 days
Daily Burn Rate: $19.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ECP INLETS KITS
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $53.5 million to THE BOEING COMPANY for work described as: ECP INLETS KITS Key points: 1. Significant award to a single large defense contractor. 2. Lack of competition may lead to inflated costs. 3. Long contract duration (2021-2028) warrants close monitoring. 4. Potential for cost overruns due to fixed-price contract type.
Value Assessment
Rating: questionable
The $53.45 million award for ECP Inlets Kits to Boeing is a substantial sum. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives or previous contracts for similar components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially increases costs for taxpayers as there was no opportunity for other vendors to offer competitive pricing.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these ECP Inlets Kits, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying for critical aircraft components due to the absence of competitive bidding. The long contract duration could lock the government into a potentially suboptimal price for an extended period. Dependence on a single supplier for essential parts can create supply chain vulnerabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- Long contract duration
- Potential for cost overruns
Positive Signals
- Award to established prime contractor
- Firm fixed price contract
Sector Analysis
The Department of the Navy's award falls within the Aircraft Engine and Engine Parts Manufacturing sector. Spending in this sector is often characterized by high R&D costs, specialized manufacturing, and a limited number of qualified suppliers, which can sometimes necessitate sole-source contracts.
Small Business Impact
This contract was awarded directly to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The sole-source nature of this award warrants increased oversight to ensure fair pricing and prevent potential waste, fraud, or abuse. Robust auditing and performance monitoring will be crucial throughout the contract's lifecycle.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Long contract duration increases risk of price escalation.
- No clear small business participation noted.
- Potential for contractor complacency without competition.
- Dependence on a single supplier for critical parts.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.5 million to THE BOEING COMPANY. ECP INLETS KITS
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 $53.5 million.
What is the period of performance?
Start: 2021-04-30. End: 2028-08-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of adequate competition. The Department of Defense should have conducted a thorough price analysis, potentially using historical data, cost breakdowns, or independent government cost estimates, to validate the fairness and reasonableness of the price paid to The Boeing Company.
What are the potential risks associated with a sole-source contract for aircraft engine parts, especially given the long duration?
Sole-source contracts for critical aircraft parts carry risks such as inflated pricing due to lack of competition, potential for complacency from the contractor, and supply chain vulnerability if the sole supplier faces disruptions. The long duration (2021-2028) exacerbates these risks, potentially locking the government into unfavorable terms and limiting flexibility to adapt to market changes or technological advancements.
How does the firm fixed price contract type impact the government's risk and the contractor's incentive for cost control on this award?
A firm fixed price (FFP) contract shifts the cost risk primarily to the contractor, incentivizing them to control costs to maximize profit. However, in a sole-source scenario, the contractor may have less pressure to achieve the lowest possible cost. The government's risk is primarily related to paying a potentially inflated price if the baseline price was not adequately negotiated or benchmarked.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
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: $53,454,854
Exercised Options: $53,454,854
Current Obligation: $53,454,854
Subaward Activity
Number of Subawards: 14
Total Subaward Amount: $2,415,348
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001921G0006
IDV Type: BOA
Timeline
Start Date: 2021-04-30
Current End Date: 2028-08-31
Potential End Date: 2028-08-31 00:00:00
Last Modified: 2024-12-19
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