DoD awards Boeing $65.8M for engineering services, with no competition
Contract Overview
Contract Amount: $65,807,278 ($65.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2007-12-01
End Date: 2011-09-30
Contract Duration: 1,399 days
Daily Burn Rate: $47.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROPOSAL PREPARATION
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $65.8 million to THE BOEING COMPANY for work described as: PROPOSAL PREPARATION Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery. 2. Long-term contract duration of nearly four years suggests significant project scope. 3. Firm-fixed-price contract type shifts risk to the contractor. 4. No small business set-aside indicates potential for large prime contractor. 5. Contract awarded by Defense Contract Management Agency, suggesting oversight role. 6. Engineering services are critical for complex defense systems.
Value Assessment
Rating: questionable
The total award amount of $65.8 million for engineering services over a period of 1399 days (approximately 3.8 years) is substantial. However, without comparable sole-source contracts for similar engineering services within the Department of Defense, it is difficult to benchmark the value for money. The firm-fixed-price contract type is generally favorable for the government in controlling costs, but the lack of competition means there was no market pressure to ensure the most competitive pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one offer was solicited and considered. The data indicates it was 'NOT COMPETED'. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. Without a competitive solicitation, it is impossible to know how many other qualified firms could have provided these engineering services or at what price.
Taxpayer Impact: The lack of competition means taxpayers may not have received the best possible price for these engineering services. Without a competitive environment, the government relies heavily on the contractor's proposed pricing and the agency's negotiation skills to ensure fair value.
Public Impact
The Department of Defense benefits from specialized engineering expertise. Services likely support the development, modification, or sustainment of defense systems. The geographic impact is centered in Missouri, where the contract is managed. The contract supports a significant engineering workforce, primarily at The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- Lack of transparency in the procurement process due to no-bid award.
- Long contract duration could lead to cost overruns if not managed effectively.
- Reliance on a single contractor for critical engineering services poses a risk if performance falters.
Positive Signals
- Firm-fixed-price contract shifts cost risk to the contractor.
- Award to a major defense contractor like Boeing suggests access to specialized expertise.
- Contract managed by Defense Contract Management Agency, implying oversight and quality assurance processes are in place.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The aerospace and defense market is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Spending in this sector is heavily influenced by government defense budgets and geopolitical factors. Comparable spending benchmarks would typically involve other large-scale engineering support contracts for complex defense platforms.
Small Business Impact
The contract data indicates that small business participation was not a factor, as the 'sb' field is false and the contract was not competed. This suggests that the prime contractor, The Boeing Company, is expected to perform the majority of the work. There is no explicit mention of subcontracting goals for small businesses within this award notice, which could limit opportunities for the small business ecosystem in this specific procurement.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for providing contract administration services to the Department of Defense. DCMA's oversight typically includes monitoring contractor performance, ensuring compliance with contract terms, and verifying payments. The firm-fixed-price nature of the contract places the primary cost risk on the contractor, but DCMA would still be responsible for ensuring the services meet the required specifications and quality standards. Transparency is limited due to the sole-source nature of the award.
Related Government Programs
- Defense Engineering Services
- Aerospace Engineering Support
- Department of Defense Procurement
- Major Defense Contractor Support
Risk Flags
- Sole-source award lacks competitive pricing.
- Lack of detailed service description limits performance assessment.
- Long contract duration increases risk of scope creep or performance degradation.
Tags
defense, department-of-defense, engineering-services, the-boeing-company, sole-source, firm-fixed-price, missouri, defense-contract-management-agency, large-contract, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $65.8 million to THE BOEING COMPANY. PROPOSAL PREPARATION
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 $65.8 million.
What is the period of performance?
Start: 2007-12-01. End: 2011-09-30.
What specific engineering services are being provided under this contract?
The provided data indicates the contract is for 'Engineering Services' (NAICS code 541330). However, it does not specify the exact nature of these services. Given the contractor is The Boeing Company and the agency is the Department of Defense, these services likely pertain to the design, development, testing, modification, or sustainment of complex military aircraft, weapons systems, or related defense technologies. Further details would typically be found in the contract's Statement of Work (SOW), which is not included in this data extract. These services are crucial for maintaining the technological edge of defense assets.
Why was this contract awarded on a sole-source basis instead of being competed?
The data explicitly states the contract was 'NOT COMPETED' and awarded to 'THE BOEING COMPANY'. Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. Common justifications include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a previous contract was awarded competitively and the follow-on work can only be performed by the original contractor. Without the specific justification documented by the agency, the exact reason for the sole-source award remains unknown, but it implies a belief that Boeing possessed unique qualifications or that competition was impractical.
How does the firm-fixed-price contract type benefit the government in this scenario?
A firm-fixed-price (FFP) contract is generally advantageous for the government, especially in situations where the scope of work is well-defined. Under an FFP contract, the contractor agrees to a total price for a specific set of goods or services. This means the contractor bears the primary responsibility for any cost overruns. For the government, this provides cost certainty and predictability, making budgeting easier. In this case, with a $65.8 million award, the FFP structure helps the Department of Defense lock in the total cost for the engineering services, protecting against unexpected increases in labor or material costs incurred by Boeing.
What is the significance of the contract being managed by the Defense Contract Management Agency (DCMA)?
The Defense Contract Management Agency (DCMA) is responsible for administering contracts on behalf of the Department of Defense and other federal agencies. When DCMA manages a contract, it typically involves overseeing contractor performance, ensuring compliance with contract terms and conditions, monitoring quality, and processing payments. For this $65.8 million engineering services contract with Boeing, DCMA's role would be to ensure that the engineering work is performed to the required standards and specifications, that progress aligns with the schedule, and that payments are made appropriately based on milestones achieved or deliverables accepted. This oversight is crucial for ensuring the government receives the value it is paying for.
What does the contract duration of 1399 days imply about the project?
A contract duration of 1399 days, which is approximately 3.8 years, suggests that the engineering services required are substantial and likely span a significant portion of a project lifecycle. This extended timeframe could indicate involvement in long-term research and development, the sustainment of an existing complex system, or the phased development of new capabilities. Such long durations often require significant planning, resource allocation, and ongoing oversight to manage effectively and ensure that the project remains on track and within budget over its 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: 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
Financial Breakdown
Contract Ceiling: $75,964,204
Exercised Options: $65,856,643
Current Obligation: $65,807,278
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365701D0026
IDV Type: IDC
Timeline
Start Date: 2007-12-01
Current End Date: 2011-09-30
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2019-11-14
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