DoD Awards Boeing $155M for H12K SCS Aircraft Manufacturing, Facing Limited Competition
Contract Overview
Contract Amount: $155,513,787 ($155.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-06-15
End Date: 2023-09-30
Contract Duration: 1,933 days
Daily Burn Rate: $80.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: H12K SCS
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $155.5 million to THE BOEING COMPANY for work described as: H12K SCS Key points: 1. Significant contract value of over $155 million awarded to a single large business. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. The contract spans nearly 2 years, indicating a substantial and ongoing need. 4. Aircraft manufacturing sector is critical for defense, but requires careful cost oversight.
Value Assessment
Rating: questionable
The contract's firm fixed price structure with limited competition suggests potential for inflated costs. Benchmarking against similar aircraft manufacturing contracts is difficult without more data, but the lack of competitive bidding is a red flag for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited-source award. This significantly restricts price discovery and potentially leads to higher costs for taxpayers compared to a fully competitive process.
Taxpayer Impact: The lack of competition likely results in a higher cost to taxpayers than if multiple vendors had vied for the contract, potentially by millions of dollars.
Public Impact
Taxpayers may be overpaying for aircraft components due to limited competition. The Department of Defense relies on this contract for critical aircraft manufacturing. Lack of transparency in the bidding process hinders public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Lack of price transparency
- Potential for cost overruns
Positive Signals
- Firm fixed price contract
- Long-term award
Sector Analysis
This contract falls within the aircraft manufacturing sector, a critical component of national defense. Spending in this area is substantial, and competitive bidding is crucial to ensure cost-effectiveness and technological advancement.
Small Business Impact
The contract was awarded to a single large business, with no indication of small business participation. This represents a missed opportunity to support small businesses in the aerospace supply chain.
Oversight & Accountability
The limited competition nature of this award warrants close oversight to ensure the Department of Defense is receiving fair value. Accountability for cost controls and performance metrics should be rigorously enforced.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Limited competition
- Lack of price transparency
- Potential for cost overruns
- No small business participation
Tags
aircraft-manufacturing, department-of-defense, mo, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $155.5 million to THE BOEING COMPANY. H12K SCS
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 $155.5 million.
What is the period of performance?
Start: 2018-06-15. End: 2023-09-30.
What specific factors justified the limited competition for this H12K SCS contract, and how were costs validated without competitive bids?
The justification for limited competition needs to be thoroughly documented by the Department of Defense. This typically involves demonstrating unique capabilities, urgent needs, or the unavailability of alternative sources. Without competitive bids, cost validation relies heavily on historical pricing, independent cost estimates, and negotiation with the sole/limited source provider. A detailed review of these justifications and validation methods is essential to ensure taxpayer funds are used responsibly.
What are the potential risks associated with awarding a large contract like this with limited competition, particularly regarding long-term sustainment and future upgrades?
Awarding large contracts with limited competition poses risks of vendor lock-in, where the government becomes overly reliant on a single provider. This can lead to higher prices for sustainment and future upgrades, as the vendor faces little pressure to innovate or offer competitive pricing. It also limits the government's flexibility to adopt new technologies or switch to more cost-effective solutions if they become available. This dependency can impact long-term program costs and operational readiness.
How does the firm fixed price (FFP) structure mitigate or exacerbate risks given the limited competition in this aircraft manufacturing contract?
A firm fixed price contract generally shifts cost risk to the contractor, which can be beneficial. However, with limited competition, the contractor may have less incentive to control costs aggressively if they believe the price is already favorable due to the lack of bidding. While the FFP structure provides cost certainty for the government, the absence of robust competition means the 'fixed' price might be set at a higher baseline than in a competitive scenario, potentially negating some of the FFP's cost-saving benefits.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6893618R0025
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: $155,513,787
Exercised Options: $155,513,787
Current Obligation: $155,513,787
Subaward Activity
Number of Subawards: 28
Total Subaward Amount: $12,207,369
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-06-15
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 00:00:00
Last Modified: 2023-11-18
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