DoD awards $104.6M for C-17 Block Spares to Boeing, raising concerns about competition and taxpayer value
Contract Overview
Contract Amount: $104,653,522 ($104.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2012-08-31
End Date: 2017-06-30
Contract Duration: 1,764 days
Daily Burn Rate: $59.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: C-17 BLOCK SPARES
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $104.7 million to THE BOEING COMPANY for work described as: C-17 BLOCK SPARES Key points: 1. Significant contract value for aircraft spare parts. 2. Sole-source award to a single large business prime contractor. 3. Potential for inflated pricing due to lack of competition. 4. Focus on defense sector, specifically aircraft manufacturing.
Value Assessment
Rating: questionable
The contract's value of over $104 million for spare parts warrants scrutiny. Without competitive bidding, it's difficult to assess if the pricing is fair compared to market rates or similar government contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was considered. This significantly limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award raises concerns about whether taxpayers are receiving the best possible value for these critical aircraft spare parts.
Public Impact
Impacts readiness of C-17 transport aircraft fleet. Potential for higher defense spending due to non-competitive award. Highlights reliance on a single prime contractor for essential components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- No small business participation
Positive Signals
- Essential for aircraft maintenance
- Firm fixed price contract type
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industrial base. Spending on spare parts is common, but the non-competitive nature here is noteworthy.
Small Business Impact
This contract did not involve small businesses, as it was awarded directly to a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The sole-source nature of this award suggests limited oversight on price negotiation. Further review of the justification for sole-source procurement and cost reasonableness is recommended.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of small business participation.
- High contract value for spares.
- Dependency on a single prime contractor.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $104.7 million to THE BOEING COMPANY. C-17 BLOCK SPARES
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 $104.7 million.
What is the period of performance?
Start: 2012-08-31. End: 2017-06-30.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves situations where only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent and compelling needs. Without specific documentation, it's difficult to ascertain the exact reason, but it directly impacts the government's ability to secure competitive pricing.
What is the risk associated with relying on a single supplier for critical C-17 spare parts?
The primary risk is a lack of leverage in price negotiations, potentially leading to inflated costs. Additionally, it creates a dependency on one supplier, increasing vulnerability to supply chain disruptions, production issues, or the supplier's business decisions. This can impact aircraft availability and overall operational readiness.
How effective is a firm fixed price contract in ensuring value for money in a sole-source scenario?
A firm fixed price contract aims to establish a set price regardless of the contractor's actual costs, shifting risk to the contractor. However, in a sole-source situation, the 'fixed' price is negotiated without competitive pressure. While it provides cost certainty for the government, the initial negotiated price might not reflect true market value, thus potentially undermining overall cost-effectiveness.
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: FIRM FIXED PRICE (J)
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: $104,653,522
Exercised Options: $104,653,522
Current Obligation: $104,653,522
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: 2012-08-31
Current End Date: 2017-06-30
Potential End Date: 2017-06-30 00:00:00
Last Modified: 2023-06-01
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