DoD awards $19.4M for aircraft parts to Boeing, raising questions on competition and value

Contract Overview

Contract Amount: $19,713,824 ($19.7M)

Contractor: Boeing Aerospace Operations, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-27

End Date: 2007-10-31

Contract Duration: 856 days

Daily Burn Rate: $23.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TAS::57 3400::TAS 200509!000242!5700!FA8106!OC-ALC/LAD CLS !F0960301D0213 !A!N! !N!SD18 ! !20050627!20080930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !+000012000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336413!E! !5!B!S! ! ! !20200930!B! ! !N!Z!D!N!U!1!001!N!2A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $19.7 million to BOEING AEROSPACE OPERATIONS, INC. for work described as: TAS::57 3400::TAS 200509!000242!5700!FA8106!OC-ALC/LAD CLS !F0960301D0213 !A!N! !N!SD18 ! !20050627!20080930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST… Key points: 1. Contract awarded to Boeing for aircraft parts. 2. Significant contract value of $19.4 million. 3. Competition method is 'Full and Open', but details are limited. 4. Sector is Defense, specifically aircraft manufacturing. 5. Potential concerns regarding cost-plus fixed fee structure.

Value Assessment

Rating: questionable

The contract uses a Cost Plus Fixed Fee (CPFF) pricing structure, which can lead to higher costs for the government compared to fixed-price contracts. Without detailed cost breakdowns or benchmarks, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition'. However, the limited information available makes it difficult to ascertain the extent of competition and how effectively price discovery was achieved.

Taxpayer Impact: The CPFF structure and potential lack of robust competition could lead to higher taxpayer costs than necessary for these aircraft parts.

Public Impact

Taxpayers may be overpaying for aircraft parts due to the contract's pricing structure. The Department of Defense relies on critical aircraft components, impacting readiness. Boeing, a major defense contractor, receives substantial government funding. Transparency in defense contracting is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure
Limited transparency on competition effectiveness
Potential for cost overruns

Positive Signals

Awarded under Full and Open Competition
Contract supports critical defense needs

Sector Analysis

This contract falls within the Defense sector, specifically focusing on aircraft manufacturing and parts. Spending in this area is substantial, driven by military readiness and modernization efforts. Benchmarks for similar contracts are often proprietary or difficult to access.

Small Business Impact

This contract was awarded to a large business (Boeing). There is no indication of small business participation or subcontracting in the provided data.

Oversight & Accountability

Oversight of this contract would typically be managed by the Defense Contract Management Agency (DCMA). The effectiveness of this oversight in controlling costs and ensuring performance is not detailed here.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Lack of transparency on the effectiveness of competition
High contract value concentrated with a single large contractor
Limited insight into the specific aircraft parts and their criticality

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.7 million to BOEING AEROSPACE OPERATIONS, INC.. TAS::57 3400::TAS 200509!000242!5700!FA8106!OC-ALC/LAD CLS !F0960301D0213 !A!N! !N!SD18 ! !20050627!20080930!194293544!085188316!009256819!N!BOEING AEROSPACE OPERATIONS, I!2601 LIBERTY PKWY !MIDWEST CITY !OK!73110!48350!109!40!MIDWEST CITY !OKLAHOMA !OKLAHOMA !+000012000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336413!E

Who is the contractor on this award?

The obligated recipient is BOEING AEROSPACE OPERATIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2005-06-27. End: 2007-10-31.

What was the rationale for choosing a Cost Plus Fixed Fee structure for this contract, and how were costs validated?

The rationale for a CPFF structure often lies in situations where costs are uncertain or difficult to estimate upfront, such as research and development or complex manufacturing. However, it places the risk of cost overruns on the government. Validation of costs would typically involve detailed audits and reviews by the contracting officer and DCMA, but the specifics of this validation process are not provided.

How effectively did the 'Full and Open Competition' process ensure competitive pricing for these aircraft parts?

While advertised as 'Full and Open Competition', the actual level of competition and its impact on pricing is unclear from the data. Factors like the complexity of the parts, existing relationships, or barriers to entry could limit the number of bidders. Without knowing the number of bids received and their pricing, it's hard to definitively say if the competition was effective in driving down costs.

What is the long-term impact of this contract on the DoD's inventory and budget for aircraft maintenance and readiness?

This contract contributes to the DoD's supply chain for essential aircraft components. The CPFF structure, if not tightly managed, could lead to budget overruns impacting future procurement or readiness initiatives. The duration and value suggest a significant role in maintaining a specific fleet or type of aircraft, making its cost-effectiveness crucial for sustained operational capability.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: F0960301D0213

IDV Type: IDC

Timeline