Department of Defense awards $69.5M contract to Boeing for aircraft manufacturing, with a 2466-day duration
Contract Overview
Contract Amount: $69,474,501 ($69.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2012-02-29
End Date: 2018-11-30
Contract Duration: 2,466 days
Daily Burn Rate: $28.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: GRIP 10
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $69.5 million to THE BOEING COMPANY for work described as: GRIP 10 Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Long contract duration of over 6 years suggests a sustained need for aircraft manufacturing services. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored. 4. Awarded by the Department of the Air Force, indicating a specific defense requirement. 5. The absence of small business participation raises concerns about broader economic impact. 6. The contract's value is significant, requiring robust oversight to ensure value for taxpayer money.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific details on the aircraft manufactured and the services provided. However, the Cost Plus Fixed Fee (CPFF) contract type, while common in complex defense procurements, carries inherent risks of cost escalation. The fixed fee component aims to provide the contractor with an incentive to control costs, but the overall price is subject to actual costs incurred. Comparing this to similar aircraft manufacturing contracts would require detailed specifications and performance metrics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when urgent needs preclude a competitive process. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, potentially resulting in less favorable terms for taxpayers.
Public Impact
The primary beneficiaries are the Department of the Air Force, receiving critical aircraft manufacturing services. The contract supports the production or modification of aircraft essential for national defense operations. The geographic impact is concentrated in California, where the contractor is located. This contract likely supports a significant number of jobs within The Boeing Company's workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and potentially increases costs for taxpayers.
- Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
- Lack of small business participation may limit opportunities for smaller firms in the defense supply chain.
Positive Signals
- Award to a major defense contractor suggests access to specialized expertise and established production capabilities.
- Long contract duration indicates a stable, long-term requirement met by this award.
- The contract supports critical national defense assets.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and long production cycles. Major players like The Boeing Company dominate the landscape, often securing large, long-term government contracts. Spending in this sector is heavily influenced by defense budgets and geopolitical factors. Comparable spending benchmarks would involve analyzing other large-scale aircraft production or modification contracts within the Department of Defense.
Small Business Impact
This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to a large prime contractor like Boeing suggests that the primary focus was on leveraging established capabilities. This lack of direct small business involvement means that opportunities for smaller firms to participate in this specific contract are limited, potentially impacting the broader small business defense ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of costs, performance, and milestones is crucial. Transparency is generally maintained through contract reporting mechanisms, though specific details of cost breakdowns may be proprietary. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Aircraft Procurement
- Defense Manufacturing
- Air Force Logistics
- Aerospace Industry Contracts
Risk Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Tags
defense, department-of-defense, department-of-the-air-force, aircraft-manufacturing, the-boeing-company, sole-source, cost-plus-fixed-fee, california, large-contract, long-duration
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.5 million to THE BOEING COMPANY. GRIP 10
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 $69.5 million.
What is the period of performance?
Start: 2012-02-29. End: 2018-11-30.
What specific aircraft or aircraft components are being manufactured or modified under this contract?
The provided data does not specify the exact aircraft or components being manufactured or modified. The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' is broad and encompasses the production of complete aircraft, as well as their engines, propellers, and parts. To understand the full scope and value, further details on the specific end-item or service are necessary. This information is typically found in the contract's statement of work or detailed award documentation, which are not included in the abbreviated data.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for aircraft manufacturing?
The Cost Plus Fixed Fee (CPFF) contract type is often used for complex development or production efforts where costs are difficult to estimate accurately upfront. The government agrees to pay the contractor's actual costs plus a predetermined fixed fee, which represents the contractor's profit. While this structure provides flexibility and can incentivize the contractor to complete the work, it carries a higher risk of cost overruns for the government compared to fixed-price contracts. Fixed-price contracts offer greater cost certainty but may be less suitable for highly uncertain or evolving requirements. For aircraft manufacturing, the choice of contract type depends heavily on the maturity of the design, the predictability of production costs, and the level of risk the government is willing to assume.
What is the historical spending pattern for aircraft manufacturing by the Department of the Air Force with The Boeing Company?
The provided data only includes a single contract award of $69.5 million to The Boeing Company for aircraft manufacturing. To assess historical spending patterns, a broader dataset encompassing all contracts awarded to Boeing by the Air Force within the 'Aircraft Manufacturing' category (NAICS 336411) over multiple fiscal years would be required. This would allow for an analysis of trends, average contract values, and the frequency of sole-source versus competed awards. Without this broader context, it's impossible to determine if this $69.5 million award represents a typical, increased, or decreased level of spending compared to past performance.
What are the potential risks associated with a sole-source award of this magnitude and duration?
A sole-source award of this magnitude ($69.5 million) and duration (2466 days) carries several potential risks. Firstly, the lack of competition means the government may not be achieving the lowest possible price, as market forces are not driving cost efficiency. Secondly, the long duration increases the risk of scope creep or changes in requirements that may not be adequately captured in the original sole-source negotiation. Thirdly, reliance on a single source can create vulnerabilities in the supply chain and reduce flexibility if the contractor encounters performance issues or faces financial difficulties. Finally, the Cost Plus Fixed Fee structure, combined with a sole-source award, necessitates extremely diligent oversight to prevent unnecessary cost growth and ensure the contractor remains focused on delivering value.
Are there any specific performance metrics or milestones associated with this contract that indicate its success?
The provided abbreviated data does not include specific performance metrics, milestones, or key performance indicators (KPIs) associated with this contract. For a contract of this nature, performance would typically be evaluated based on factors such as on-time delivery, adherence to quality standards, technical performance of the manufactured aircraft or components, and cost control within the CPFF framework. The success of the contract would be determined by the Air Force's assessment of whether these unstated metrics were met throughout the contract's duration. Without access to the contract's statement of work or performance reports, a definitive assessment of its success is not possible.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
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: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $69,474,501
Exercised Options: $69,474,501
Current Obligation: $69,474,501
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852612D0001
IDV Type: IDC
Timeline
Start Date: 2012-02-29
Current End Date: 2018-11-30
Potential End Date: 2018-11-30 00:00:00
Last Modified: 2025-04-23
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