DoD Awards $243.8M Boeing Contract for Aircraft Manufacturing, Not Competed
Contract Overview
Contract Amount: $243,840,206 ($243.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2012-09-28
End Date: 2030-09-15
Contract Duration: 6,561 days
Daily Burn Rate: $37.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: DELIVERY ORDER #2 FY13
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $243.8 million to THE BOEING COMPANY for work described as: DELIVERY ORDER #2 FY13 Key points: 1. Significant contract value of $243.8 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced value. 3. Long contract duration (2012-2030) suggests a need for ongoing oversight. 4. The 'Aircraft Manufacturing' sector is critical but often dominated by a few large players.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes it difficult to assess value. Without competitive bids, it's hard to benchmark pricing against similar aircraft manufacturing services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The absence of competition likely results in higher costs for taxpayers compared to a competitively awarded contract.
Public Impact
Taxpayers may be overpaying for aircraft manufacturing services due to the lack of competition. The long-term nature of the contract could lock the government into potentially suboptimal pricing. Dependence on a single contractor for critical aircraft manufacturing raises supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus-Fixed-Fee
- Long Contract Duration
- Sole-Source Award
Positive Signals
- Awarded to a known large business with manufacturing expertise
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, which is characterized by high barriers to entry and significant technological expertise. Spending benchmarks in this sector are often high due to the complexity and specialized nature of the products.
Small Business Impact
This contract was awarded to a large business (The Boeing Company) and did not include any small business set-asides. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The 'not competed' status and cost-plus-fixed-fee structure necessitate robust oversight to ensure costs are reasonable and performance meets requirements. The long duration requires continuous monitoring.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contracts can incentivize spending.
- Long contract duration increases risk of price escalation.
- Sole-source award limits market-driven efficiencies.
- Potential for contractor lock-in.
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 $243.8 million to THE BOEING COMPANY. DELIVERY ORDER #2 FY13
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 $243.8 million.
What is the period of performance?
Start: 2012-09-28. End: 2030-09-15.
What specific justification was provided for not competing this significant aircraft manufacturing contract?
The provided data indicates the contract was 'NOT COMPETED' but does not specify the justification. Typically, sole-source awards require detailed justification, such as the existence of only one responsible source, urgent and compelling needs, or specific national security requirements. Without this justification, it's difficult to assess the necessity of the sole-source approach.
How are cost efficiencies being ensured under this Cost Plus Fixed Fee (CPFF) contract without competitive pressure?
CPFF contracts can incentivize contractors to control costs to maximize their fixed fee. However, without competition, the government relies heavily on robust auditing and oversight by the Defense Contract Management Agency (DCMA) to scrutinize costs and ensure they are reasonable and allocable. Regular reviews of the contractor's cost accounting practices are crucial.
What is the potential impact of this long-term, sole-source award on future innovation and pricing in the aircraft manufacturing sector?
A long-term, sole-source award can stifle innovation by reducing the incentive for the incumbent to invest in new technologies or process improvements, as competition is absent. It may also set a precedent for future sole-source awards, potentially leading to higher baseline prices in the sector and limiting opportunities for emerging competitors.
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
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 14441 ASTRONAUTICS LN, HUNTINGTON BEACH, CA, 92647
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $243,852,382
Exercised Options: $243,852,382
Current Obligation: $243,840,206
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852612D0001
IDV Type: IDC
Timeline
Start Date: 2012-09-28
Current End Date: 2030-09-15
Potential End Date: 2030-09-15 00:00:00
Last Modified: 2025-08-11
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