Naval Air Warfare Center awards $150M+ for AV-8B Remanufacture, impacting aircraft equipment and services

Contract Overview

Contract Amount: $39,059,310 ($39.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2005-10-18

End Date: 2013-01-26

Contract Duration: 2,657 days

Daily Burn Rate: $14.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200601!093391!1700!N68936!NAVAL AIR WARFARE CENTER !N6893605C0068 !A!N! !N! ! !20051018!20101017!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000000316000!N!N!000039622281!K016!MODIFICATION OF EQ/AIRCRAFT COMPS & ACCYS !A1C!OTHER AIRCRAFT EQUIPMENT !530 !AV-8B REMANUFACTURE !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!U!1!001!N!1A!A!N!Z! ! !N!C!N! ! ! !B!B!A!A!000!A!B!N! ! ! !Y!1700!N68936!0001! !

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $39.1 million to THE BOEING COMPANY for work described as: 200601!093391!1700!N68936!NAVAL AIR WARFARE CENTER !N6893605C0068 !A!N! !N! ! !20051018!20101017!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. … Key points: 1. The contract focuses on the remanufacture of AV-8B aircraft components and accessories, a critical part of defense readiness. 2. McDonnell Douglas Corporation (now Boeing) secured this significant award, highlighting a key player in aerospace manufacturing. 3. The contract's 'Not Competed' status raises questions about potential missed opportunities for competitive pricing and innovation. 4. Spending in the Engineering Services sector, particularly for defense-related projects, often involves complex and high-value contracts.

Value Assessment

Rating: questionable

The contract value of $149,879,157 is substantial. Without comparable contracts for AV-8B remanufacturing, a precise pricing assessment is difficult, but the 'Not Competed' nature suggests potential for overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitive bidding process.

Taxpayer Impact: The lack of competition for this large contract likely means taxpayers are not benefiting from the most cost-effective solution available.

Public Impact

Impacts the operational readiness of the AV-8B Harrier fleet, a key asset for naval aviation. Supports jobs and economic activity within the aerospace manufacturing and engineering sectors. Raises concerns about the government's procurement practices and the potential for reduced competition in defense contracts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Supports critical defense asset
Long-term engagement with a major contractor

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which includes firms that provide engineering and design services for various industries. Defense contracts in this sector are often substantial due to the complexity and specialized nature of military equipment.

Small Business Impact

The awardee, McDonnell Douglas Corporation (now Boeing), is a large aerospace manufacturer. There is no indication that small businesses were significantly involved in this specific contract, either as prime contractors or subcontractors.

Oversight & Accountability

The 'Not Competed' status warrants further oversight to ensure the justification for sole-source procurement was sound and that the pricing is reasonable. Accountability for cost overruns in cost-plus contracts is crucial.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency in pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.1 million to THE BOEING COMPANY. 200601!093391!1700!N68936!NAVAL AIR WARFARE CENTER !N6893605C0068 !A!N! !N! ! !20051018!20101017!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000000316000!N!N!000039622281!K016!MODIFICATION OF EQ/AIRCRAFT COMPS & ACCYS !A1C!OTHER AIRCRAFT EQUIPMENT !530 !AV-8B REMANUFACTURE !541330!E! !3! ! ! ! ! !999

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 $39.1 million.

What is the period of performance?

Start: 2005-10-18. End: 2013-01-26.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award is critical for understanding the necessity of bypassing the competitive bidding process. Without this information, it's difficult to assess if the government truly had no other viable options or if there were internal factors that led to this decision. Exploring alternative competitive strategies, even for specialized services, is essential for ensuring taxpayer value and fostering innovation.

How does the cost-plus fixed fee structure impact the contractor's incentive to control costs, and what mechanisms are in place to monitor and manage expenditures?

Cost-plus fixed fee contracts can incentivize contractors to incur costs, as a portion of their profit is tied to the total expenditure. Robust oversight and stringent monitoring of expenditures are paramount to prevent cost overruns. The government must have clear performance metrics and audit procedures to ensure the contractor is managing costs effectively and delivering the required services within reasonable bounds.

What is the long-term strategic value of remanufacturing the AV-8B fleet versus investing in newer platforms, and how does this contract align with future defense modernization plans?

The decision to remanufacture existing platforms like the AV-8B should be evaluated against the cost and benefits of acquiring new aircraft. This contract's alignment with broader defense modernization plans is crucial. Understanding the strategic rationale behind extending the life of older assets, rather than phasing them out for newer technologies, provides insight into the military's current priorities and future operational requirements.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline