DoD Awards Boeing $17.8M for Logistics Support, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $17,813,452 ($17.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2015-07-08
Contract Duration: 2,840 days
Daily Burn Rate: $6.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: LOGISTICS SUPPORT
Place of Performance
Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32548
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $17.8 million to THE BOEING COMPANY for work described as: LOGISTICS SUPPORT Key points: 1. Significant contract value for specialized logistics support. 2. Sole provider Boeing dominates the aircraft manufacturing sector. 3. Risk of cost escalation due to Cost Plus Award Fee structure. 4. Defense sector spending on logistics is substantial and ongoing.
Value Assessment
Rating: questionable
The Cost Plus Award Fee (CPAF) contract type introduces inherent risk for cost overruns. Without clear benchmarks or detailed cost breakdowns, assessing value is difficult. The award amount of $17.8M is significant, but the final cost could be higher.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific award mechanism (Delivery Order) and the nature of logistics support for complex aircraft may limit true price discovery over the contract's life.
Taxpayer Impact: While competition was intended, the CPAF structure and potential for cost growth mean taxpayers could face higher-than-anticipated expenses if not managed closely.
Public Impact
Ensures critical logistics support for Department of Defense aircraft. Supports a major defense contractor, impacting the aerospace industry. Potential for increased costs impacts taxpayer burden. Long contract duration raises questions about sustained value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure
- Long contract duration
- Sole provider for specific support needs
- Lack of detailed cost breakdown
Positive Signals
- Awarded under full and open competition
- Supports critical defense operations
- Established contractor with proven capabilities
Sector Analysis
This contract falls within the Defense sector, specifically supporting aircraft logistics. Spending in this area is crucial for military readiness. Benchmarks for similar logistics contracts can vary widely based on aircraft type and service complexity.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of small business participation in the provided data, suggesting limited opportunities for small businesses on this specific award.
Oversight & Accountability
The contract's Cost Plus Award Fee structure necessitates robust oversight to ensure cost control and performance. The Department of Defense, through its agencies like DCMA, is responsible for monitoring expenditures and contractor performance to safeguard taxpayer funds.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Award Fee structure
- Potential for cost overruns
- Long contract duration (8 years)
- Reliance on a single large contractor
- Lack of detailed cost performance data
Tags
aircraft-manufacturing, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.8 million to THE BOEING COMPANY. LOGISTICS SUPPORT
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 $17.8 million.
What is the period of performance?
Start: 2007-09-28. End: 2015-07-08.
What is the typical cost variance for CPAF contracts in aircraft logistics, and how does this contract compare?
CPAF contracts can see cost variances ranging from 5-15% above initial estimates, depending on complexity and oversight. Without specific cost performance data for this contract, a direct comparison is difficult. However, the potential for award fees to incentivize performance can sometimes mask underlying cost inefficiencies if not rigorously managed.
What are the primary risks associated with a long-duration logistics support contract for military aircraft?
Long-duration contracts risk price escalation due to inflation, technological obsolescence of support systems, and potential shifts in military requirements. Contractor performance can also degrade over time if incentives are not maintained. Furthermore, prolonged reliance on a single provider can reduce future competitive pressure.
How effectively does the CPAF structure ensure value for money in this specific logistics contract?
The CPAF structure aims to balance cost control with performance incentives. However, its effectiveness hinges on clear performance metrics and diligent oversight. If award criteria are too easily met or if costs are not scrutinized, it may not deliver optimal value. The potential for cost overruns suggests a need for strong management.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: PHOTO, MAP, PRINT, PUBLICATION › PHOTOGR, MAPPING, PRINTING, PUBLISH
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 626 ANCHORS ST NW, FORT WALTON BEACH, FL, 32548
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $17,813,452
Exercised Options: $17,813,452
Current Obligation: $17,813,452
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365798D0002
IDV Type: IDC
Timeline
Start Date: 2007-09-28
Current End Date: 2015-07-08
Potential End Date: 2015-07-08 00:00:00
Last Modified: 2017-06-21
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