Boeing awarded $105M for engineering services, with a significant portion spent in Missouri
Contract Overview
Contract Amount: $105,451,212 ($105.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2008-07-30
End Date: 2013-09-29
Contract Duration: 1,887 days
Daily Burn Rate: $55.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: CMS
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63166
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $105.5 million to THE BOEING COMPANY for work described as: CMS Key points: 1. Contract value of $105.45 million for engineering services. 2. Awarded to The Boeing Company, a major aerospace and defense contractor. 3. Contract duration of 1887 days, spanning over 5 years. 4. Procured under full and open competition. 5. Contract type is Cost Plus Incentive Fee, suggesting performance-based incentives. 6. Significant spending noted in Missouri, indicating regional economic impact.
Value Assessment
Rating: fair
The contract value of $105.45 million for engineering services over nearly five years appears moderate for a large defense contractor like Boeing. Without specific details on the engineering services provided, a direct value-for-money assessment is challenging. However, the Cost Plus Incentive Fee (CPIF) structure suggests an attempt to align contractor performance with cost and schedule objectives, which can be a positive indicator for value if managed effectively. Benchmarking against similar large-scale engineering support contracts for defense systems would be necessary for a more precise valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. This competitive process is generally expected to yield better pricing and terms for the government. The number of bidders and the specific evaluation criteria would provide further insight into the intensity of the competition and its impact on price discovery.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better use of public funds.
Public Impact
The primary beneficiaries are likely the Department of Defense, receiving essential engineering services for its programs. Services delivered include critical engineering support, potentially for aircraft, weapon systems, or other defense platforms. The geographic impact is noted with significant spending in Missouri, suggesting local job creation and economic activity. Workforce implications include employment for engineers and technical staff at Boeing and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- CPIF contracts can lead to cost overruns if not closely monitored, as the government bears costs plus incentives.
- The long duration of the contract (1887 days) may present challenges in adapting to evolving technological needs or program changes.
- Lack of specific details on the engineering services makes it difficult to assess the true scope and potential risks.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- The use of an incentive fee structure can motivate contractor performance and efficiency.
- The contract's duration indicates a long-term need for these engineering services, suggesting strategic importance.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for defense engineering services is substantial, driven by the continuous need for research, development, sustainment, and modernization of military platforms and systems. Major defense contractors like Boeing are key players in this market, often securing large, long-term contracts for specialized technical expertise. Spending benchmarks for similar engineering support contracts can vary widely based on the complexity and scale of the systems involved.
Small Business Impact
The provided data indicates that small business participation (sb: false) was not a specific set-aside criterion for this contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, Boeing, as a prime contractor, may engage small businesses as subcontractors for specialized services or components, contributing indirectly to the small business ecosystem. Further investigation into subcontracting plans would be needed to fully assess the impact.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting agency (Department of Defense) and its associated contract management offices, such as the Defense Contract Management Agency (DCMA). Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which links contractor profit to performance metrics. Transparency would be enhanced through contract reporting mechanisms and potential audits by the Government Accountability Office (GAO) or the Department of Defense Inspector General (IG), though specific oversight details are not provided.
Related Government Programs
- Defense Engineering Services Contracts
- Aerospace Engineering Support
- Cost Plus Incentive Fee Contracts
- Department of Defense Procurement
- Major Defense Contractor Awards
Risk Flags
- Potential for cost overruns due to CPIF structure.
- Risk of technological obsolescence over the contract's long duration.
- Lack of specific service details hinders precise value assessment.
Tags
engineering-services, defense, cost-plus-incentive-fee, full-and-open-competition, definitive-contract, the-boeing-company, department-of-defense, missouri, large-contract, long-duration
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $105.5 million to THE BOEING COMPANY. CMS
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 $105.5 million.
What is the period of performance?
Start: 2008-07-30. End: 2013-09-29.
What specific engineering services were provided under this $105 million contract?
The provided data identifies the North American Industry Classification System (NAICS) code as 541330, which corresponds to 'Engineering Services'. However, the specific nature of these services for The Boeing Company under this particular contract is not detailed. Typically, engineering services in the defense sector can encompass a wide range, including design, development, testing, analysis, integration, and sustainment support for complex military systems such as aircraft, missiles, or command and control systems. Without further documentation, the precise scope remains unspecified, making it difficult to evaluate the appropriateness of the contract's value or performance metrics.
How does the Cost Plus Incentive Fee (CPIF) structure typically function, and what are its implications for this contract?
A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and receives a target fee, plus a share of any savings below a target cost, or a reduction in fee if costs exceed the target. For this contract with The Boeing Company, the CPIF structure suggests that both the government and the contractor have incentives to control costs and achieve performance objectives. The government benefits if costs are kept low, while the contractor earns a higher fee for exceeding performance targets or staying under budget. The effectiveness of CPIF hinges on clearly defined performance metrics and cost targets, and diligent government oversight to ensure fair application of incentives and prevent potential cost escalation.
What is the significance of the contract being awarded under 'Full and Open Competition'?
Awarding a contract under 'Full and Open Competition' signifies that the government solicited proposals from all responsible sources, providing maximum opportunity for businesses to compete. This approach is mandated by law for most federal procurements and is intended to ensure fair and transparent acquisition processes, foster competition, and achieve the best value for the government. For this $105 million engineering services contract with The Boeing Company, it implies that other qualified companies had the chance to bid. The level of competition (number of bidders, quality of proposals) directly influences price discovery and the likelihood of obtaining favorable terms and pricing for the taxpayer.
What does the 'MO' (Missouri) designation for the state imply regarding this contract?
The 'MO' designation indicates that a significant portion of the contract's performance or spending occurred in Missouri. For a contract valued at over $105 million awarded to The Boeing Company, this suggests a substantial economic impact within the state. This could translate to job creation for engineers and support staff, utilization of local suppliers, and overall contribution to the regional economy. Defense contractors often have major operational hubs in specific states, and contract spending data helps track the geographic distribution of federal dollars and their associated economic benefits.
How does the contract duration of 1887 days (approximately 5.17 years) affect the assessment of this award?
A contract duration of 1887 days signifies a long-term commitment by the Department of Defense for engineering services from The Boeing Company. Such extended periods are common for complex defense programs requiring sustained technical support, research, development, or sustainment. From an assessment perspective, a longer duration can offer stability and predictability for both the contractor and the government, potentially leading to economies of scale and deeper expertise development. However, it also introduces risks related to technological obsolescence, changing requirements, and potential cost growth over time. Effective contract management, including regular reviews and potential modifications, is crucial to mitigate these risks and ensure continued value throughout the contract's life.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N6133107R0035
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $146,707,276
Exercised Options: $146,707,276
Current Obligation: $105,451,212
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-07-30
Current End Date: 2013-09-29
Potential End Date: 2013-09-29 00:00:00
Last Modified: 2025-04-21
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