DoD's $465.6M Boeing Contract for Aircraft Manufacturing: A Decade-Long Sole Source Award
Contract Overview
Contract Amount: $465,624,207 ($465.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2003-12-24
End Date: 2013-02-28
Contract Duration: 3,354 days
Daily Burn Rate: $138.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $465.6 million to THE BOEING COMPANY for work described as: Key points: 1. Significant spending of $465.6M over 10 years on aircraft manufacturing. 2. Sole-source award to The Boeing Company raises questions about competition. 3. Long contract duration (2003-2013) may indicate evolving needs or limited options. 4. Firm Fixed Price contract type offers cost certainty but may limit flexibility.
Value Assessment
Rating: questionable
The contract value of $465.6M is substantial for aircraft manufacturing. Without specific benchmarks for similar sole-source contracts or detailed scope, assessing its value is difficult. The long duration and lack of competition suggest potential for overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning competition was not sought. This method can lead to higher prices as there is no market pressure to offer the best value. The lack of a competitive bidding process limits price discovery.
Taxpayer Impact: The absence of competition in a contract of this magnitude likely resulted in higher costs for taxpayers compared to a competitively awarded contract.
Public Impact
Taxpayers may have paid a premium due to the lack of competitive bidding. The long-term commitment to a single vendor could stifle innovation in the aircraft manufacturing sector. Dependence on a sole supplier can create supply chain risks for the Department of Defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of competition
- Potential for inflated pricing
Positive Signals
- Firm Fixed Price contract provides cost certainty
- Established vendor relationship
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of defense spending. Benchmarks for sole-source aircraft manufacturing contracts are difficult to establish due to their rarity and specific nature, but large, long-term sole-source awards are generally scrutinized for cost-effectiveness.
Small Business Impact
The data indicates this contract was awarded to The Boeing Company, a large prime contractor. There is no information suggesting that small businesses were involved as subcontractors or prime contractors in this specific award, which is common for large sole-source defense contracts.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the price was fair and reasonable. A review of the justification for sole-sourcing and the negotiation process would be beneficial to assess accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competition
- Long contract duration may not reflect current needs
- Potential for inflated pricing due to lack of competition
- Limited transparency on performance metrics
- No indication of small business participation
Tags
aircraft-manufacturing, department-of-defense, ok, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $465.6 million to THE BOEING COMPANY. See the official description on USAspending.
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 $465.6 million.
What is the period of performance?
Start: 2003-12-24. End: 2013-02-28.
What was the specific justification for awarding this contract on a sole-source basis to The Boeing Company, and was this justification thoroughly vetted?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without access to the specific contract file, it's impossible to determine the exact reason. However, for a contract of this size and duration, a rigorous vetting process by the Department of Defense should have been in place to ensure it was truly the only viable option and that the pricing was fair.
How did the firm fixed price structure impact the overall cost and risk allocation between the government and The Boeing Company over the contract's 10-year duration?
A firm fixed price (FFP) contract shifts most of the risk to the contractor, as the price is set regardless of actual costs incurred. This provides cost certainty for the government. However, in a sole-source scenario, the 'fixed' price might have been negotiated without competitive pressure, potentially leading to a higher baseline price. Over 10 years, Boeing bore the risk of cost overruns, but the government might have overpaid if the initial price was not optimized.
What was the actual performance and delivery success rate for this contract, and how does it compare to industry standards for aircraft manufacturing?
The provided data indicates the contract status was 'OK' and the 'st' (status) was 'OKLAHOMA', suggesting satisfactory performance. However, specific metrics on delivery success rates, quality, and adherence to specifications are not included. Comparing this to industry standards would require detailed performance reports and knowledge of the specific aircraft or components produced under this award.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
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: 2600 WESTMINSTER AVE, SEAL BEACH, CA, 90740
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $465,624,207
Exercised Options: $465,624,207
Current Obligation: $465,624,207
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365701D2050
IDV Type: IDC
Timeline
Start Date: 2003-12-24
Current End Date: 2013-02-28
Potential End Date: 2013-02-28 00:00:00
Last Modified: 2018-12-03
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