Navy Awards $1.33 Billion to Boeing for P-8A Aircraft Long-Lead Items
Contract Overview
Contract Amount: $13,324,940 ($13.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-07-31
End Date: 2027-08-31
Contract Duration: 1,126 days
Daily Burn Rate: $11.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: P-8A GERMANY SIK AND LONG-LEAD ITEMS
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $13.3 million to THE BOEING COMPANY for work described as: P-8A GERMANY SIK AND LONG-LEAD ITEMS Key points: 1. Significant investment in critical long-lead items for the P-8A Poseidon aircraft program. 2. Sole-source award to Boeing, raising questions about price discovery and competition. 3. Long contract duration (1126 days) suggests complex manufacturing and supply chain requirements. 4. Focus on a specific defense asset highlights specialized sector spending.
Value Assessment
Rating: questionable
The award of $1.33 billion for long-lead items without competition makes direct price comparison difficult. The benchmark of $1.18 million per unit (based on total award and 1126 days duration, which is a rough estimate) needs further validation against similar sole-source procurements for advanced aircraft components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This approach may limit price discovery and potentially lead to higher costs for taxpayers compared to a fully competed contract.
Taxpayer Impact: The absence of competition for a substantial contract value raises concerns about optimal use of taxpayer funds.
Public Impact
Ensures continued production of the P-8A Poseidon, a key maritime patrol and reconnaissance aircraft. Supports advanced manufacturing capabilities within the defense industrial base. Potential for cost overruns due to sole-source nature requires vigilant oversight.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Supports critical defense capability
- Long-term production planning
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for military aircraft components. Spending benchmarks in this area are highly variable due to technological complexity and specialized requirements, but large sole-source awards warrant scrutiny.
Small Business Impact
The contract was awarded directly to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this specific award notice, though Boeing's broader defense contracts often involve SMB participation.
Oversight & Accountability
Given the sole-source nature of this award, robust oversight from the Department of the Navy and the Department of Defense is crucial to ensure fair pricing and efficient execution. Auditing of costs and performance will be essential.
Related Government Programs
- Other Commercial and Service Industry Machinery Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition
- Potential for inflated pricing
- Limited transparency in price discovery
- High dollar value requires stringent oversight
Tags
other-commercial-and-service-industry-ma, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.3 million to THE BOEING COMPANY. P-8A GERMANY SIK AND LONG-LEAD ITEMS
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 $13.3 million.
What is the period of performance?
Start: 2024-07-31. End: 2027-08-31.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of other responsible sources. The Department of Defense should provide detailed documentation supporting this determination. To ensure fair pricing, they may rely on historical pricing data, independent cost estimates, or profit analyses. Regular audits and performance reviews are critical to monitor costs throughout the contract lifecycle.
What are the specific long-lead items being procured, and how do they contribute to the overall P-8A program's risk mitigation?
Long-lead items are components or materials that require significant manufacturing time, often exceeding the assembly time of the final product. For the P-8A, these could include specialized engines, radar systems, or complex airframe structures. Procuring these early mitigates schedule risk by ensuring their availability when needed for aircraft assembly, preventing production delays and maintaining program timelines.
How does this $1.33 billion award impact the overall budget and projected spending for the P-8A program?
This significant award represents a substantial portion of the P-8A program's annual or multi-year budget. It directly impacts the near-term financial obligations for the Department of the Navy. Understanding how this expenditure aligns with the total program cost and whether it necessitates adjustments to future funding allocations is essential for fiscal planning and accountability.
Industry Classification
NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Other Commercial and Service Industry Machinery Manufacturing
Product/Service Code: TRAINING AIDS AND DEVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6134019R0009
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS 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: $13,324,940
Exercised Options: $13,324,940
Current Obligation: $13,324,940
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $3,280,360
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6134019G0002
IDV Type: BOA
Timeline
Start Date: 2024-07-31
Current End Date: 2027-08-31
Potential End Date: 2027-08-31 00:00:00
Last Modified: 2025-09-30
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