Air Force awards $67.7M for McDonnell Douglas engineering services, with Boeing as contractor

Contract Overview

Contract Amount: $67,743,522 ($67.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2005-01-19

End Date: 2009-03-31

Contract Duration: 1,532 days

Daily Burn Rate: $44.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: 200505!000059!5700!FA8505!WR-ALC/LFK !F3365701D0026 !A!N! !N!RJ20 ! !20050119!20051130!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000016991471!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !541330!E! !5!B!S! ! ! !20200930!B! ! !A! !D!N!J!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $67.7 million to THE BOEING COMPANY for work described as: 200505!000059!5700!FA8505!WR-ALC/LFK !F3365701D0026 !A!N! !N!RJ20 ! !20050119!20051130!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. … Key points: 1. Contract awarded to McDonnell Douglas, later acquired by Boeing, for essential engineering services. 2. Significant portion of contract value allocated to systems engineering and airframe support. 3. Fixed-price contract type suggests defined scope and cost control measures. 4. Long duration of over 1500 days indicates a sustained need for these services. 5. Contract was not competed, raising questions about potential cost efficiencies. 6. Geographic location of contractor in St. Louis, Missouri, suggests regional economic impact.

Value Assessment

Rating: fair

The contract value of $67.7 million for engineering services over approximately four years appears substantial. Benchmarking this against similar contracts for systems engineering and airframe support is challenging without more specific service details. However, the lack of competition suggests that taxpayers may not have benefited from the most competitive pricing available in the market. The fixed-price nature provides some cost certainty, but the overall value proposition is difficult to fully assess without comparative data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The data does not specify the reasons for this approach, such as a sole-source justification or a specific emergency. The lack of competition means that multiple bidders were not evaluated, which typically drives down prices through market forces. This approach limits the government's ability to explore a wider range of solutions and potentially secure better terms.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the price reductions that can occur when multiple companies compete for a contract. This could result in a higher overall cost for the services rendered.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving critical engineering and airframe support. Services likely include design, analysis, testing, and sustainment for aircraft systems. The contract supports the aerospace industry workforce, particularly in the St. Louis, Missouri area. Geographic impact is concentrated around the contractor's facilities in Missouri.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Contract duration is long, increasing exposure to potential cost overruns if not managed tightly.
Specific details of services rendered are not fully elaborated, making performance assessment difficult.

Positive Signals

Fixed-price contract type offers some cost predictability.
Long-term nature suggests a critical and ongoing need for these specialized engineering services.
Contractor is a major aerospace entity, implying established expertise and capacity.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting aerospace and defense. The market for such services is characterized by a few large, established players with specialized expertise. The $67.7 million award is a significant but not exceptionally large contract within this domain. Comparable spending benchmarks would typically involve other large-scale engineering support contracts for major weapon systems or aircraft platforms.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the prime contractor is a large corporation and there is no explicit mention of small business set-asides. Subcontracting opportunities for small businesses may exist but are not detailed in this record. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance metrics and payment schedules. Transparency is limited by the sole-source nature and the lack of detailed public reporting on specific performance outcomes.

Related Government Programs

Air Force Systems Engineering Contracts
Aerospace Engineering Services
Aircraft Maintenance and Sustainment
Defense Contractor Support Services

Risk Flags

Sole-source award lacks competitive pricing pressure.
Long contract duration increases exposure to market changes and potential cost creep.
Limited public data on specific performance metrics and service details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.7 million to THE BOEING COMPANY. 200505!000059!5700!FA8505!WR-ALC/LFK !F3365701D0026 !A!N! !N!RJ20 ! !20050119!20051130!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000016991471!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !541330!E! !5!B!S! ! ! !202

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 Air Force).

What is the total obligated amount?

The obligated amount is $67.7 million.

What is the period of performance?

Start: 2005-01-19. End: 2009-03-31.

What specific engineering services were provided under this contract?

The contract identifies the primary service as 'Engineering Services' with a Product Service Code (PSC) of 541330, which broadly covers engineering services. The data also mentions 'SYSTEMS ENGINEERING SERVICES' and 'AIRFRAMES AND SPARES' as related categories. This suggests the services likely encompassed a range of activities such as design, analysis, testing, integration, and sustainment support for airframes and related aircraft systems. Without more granular data, the exact breakdown of services and their specific technical applications remains unspecified, making it difficult to pinpoint the precise nature of the engineering work performed.

How does the $67.7 million value compare to similar engineering services contracts for the Air Force?

Comparing the $67.7 million value requires context regarding the scope and duration. This contract spans over four years (January 2005 to March 2009), with a total value of $67.7 million. This averages to approximately $16.9 million per year. For large-scale engineering services supporting major defense platforms, this value is moderate. However, without knowing the specific aircraft or system supported, or the complexity of the engineering tasks, a direct comparison is difficult. Contracts for initial design or development of new systems can run into hundreds of millions or billions, while sustainment engineering might be in this range or lower, depending on the platform's age and support needs.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of $67.7 million is the potential for inflated costs due to a lack of competition. Without competing bids, the government may not achieve the most favorable pricing. Other risks include reduced innovation, as there is less incentive for the contractor to propose novel or cost-saving solutions when facing no rivals. Furthermore, a sole-source contract can sometimes indicate a lack of market research or a failure to plan adequately for competitive procurement, potentially leading to dependency on a single provider and limiting future flexibility. Oversight becomes even more critical to ensure fair pricing and adequate performance.

What was the historical spending pattern for this type of service with McDonnell Douglas/Boeing prior to this contract?

The provided data focuses on a single contract award (F3365701D0026). To assess historical spending patterns with McDonnell Douglas (and subsequently Boeing) for similar engineering services, one would need to analyze historical contract databases. McDonnell Douglas was a significant defense contractor, and its acquisition by Boeing in 1997 means that historical spending would be split between the two entities. Analyzing prior contracts for 'Engineering Services' (PSC 541330) or related categories awarded to either company by the Air Force would reveal trends in contract values, competition levels, and pricing. Without access to that broader historical data, it's impossible to establish a pattern from this single data point.

How does the contract duration (1532 days) impact the overall value and risk?

A contract duration of 1532 days (approximately 4.2 years) for $67.7 million suggests a sustained, long-term need for the engineering services. This duration can be advantageous by providing stability for both the government and the contractor, allowing for deeper integration and understanding of complex systems. It can also lead to economies of scale and reduced administrative overhead compared to multiple short-term contracts. However, a long duration also increases the risk of cost escalation if inflation is not adequately addressed, potential scope creep, and the possibility of the contractor becoming complacent. Robust performance management and contract oversight are crucial to mitigate these risks over such an extended period.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: 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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3365701D0026

IDV Type: IDC

Timeline