Boeing awarded $33.5M for GSSR Production Installation Mod Kit Support, a sole-source contract

Contract Overview

Contract Amount: $33,507,622 ($33.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2008-04-11

End Date: 2015-09-17

Contract Duration: 2,715 days

Daily Burn Rate: $12.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GSSR PRODUCTION INSTALLATION MOD KIT SUPPORT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to THE BOEING COMPANY for work described as: GSSR PRODUCTION INSTALLATION MOD KIT SUPPORT Key points: 1. Contract awarded to a single vendor, raising questions about potential price inflation and limited market engagement. 2. Long contract duration of over 7 years suggests a sustained need for these specialized aircraft modification kits. 3. The contract type is Firm Fixed Price, which shifts cost overrun risk to the contractor. 4. Awarded by the Defense Contract Management Agency, indicating a focus on defense-related aerospace needs. 5. The specific Product Service Code (PSC) is missing, hindering detailed analysis of the services procured. 6. No indication of small business participation or set-asides, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The $33.5 million awarded over approximately 7 years suggests a significant investment. However, the lack of competition means there's no external validation that this price represents a fair market rate. Comparisons to similar modification kits or services are challenging without more detailed service descriptions and a competitive baseline.

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 solicited. This approach is typically used when only one source is capable of meeting the government's needs, often due to proprietary technology or unique capabilities. The lack of competition means the government did not benefit from a range of proposals or price negotiations that could drive down costs.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as there was no opportunity for multiple companies to bid and potentially offer lower prices. This can lead to less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the U.S. Department of Defense, specifically units requiring the GSSR (Ground Support and Signal Relay) system modifications. The services delivered involve the production, installation, and support of modification kits for aircraft. The geographic impact is likely concentrated where these specific aircraft are stationed or maintained, primarily within the U.S. defense infrastructure. Workforce implications include specialized roles in aircraft manufacturing, installation, and technical support, primarily at Boeing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
Absence of a specific Product Service Code (PSC) hinders detailed understanding of the procured goods/services.
Long contract duration without clear performance metrics or re-competition points could lead to complacency.
No evidence of small business participation, missing opportunities to leverage diverse supplier base.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor, providing budget certainty.
Award to a major defense contractor like Boeing suggests access to specialized expertise and established supply chains.
Contract awarded by Defense Contract Management Agency implies adherence to rigorous defense procurement standards.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft modifications and support. The market for specialized aircraft kits and integration services is dominated by large, established defense contractors. Spending in this area is driven by the need to maintain and upgrade aging military fleets, ensuring operational readiness and incorporating new technologies. Benchmarking is difficult without specific PSC data, but large-scale modification programs can run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there information indicating subcontracting goals for small businesses. The award to a large prime contractor like Boeing suggests that opportunities for small businesses would likely be through subcontracts, if any. The absence of explicit set-asides or reporting on subcontracting could mean limited direct benefit to the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the Firm Fixed Price structure, which penalizes the contractor for cost overruns. Transparency is limited due to the sole-source nature and lack of detailed public reporting on performance metrics. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Modification Programs
Defense Logistics and Support Services
Aerospace Manufacturing Contracts
Military Aircraft Sustainment

Risk Flags

Sole-source award lacks competition
Potential for cost overruns not borne by contractor
Lack of detailed service description (missing PSC)
Long contract duration without clear re-competition points

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to THE BOEING COMPANY. GSSR PRODUCTION INSTALLATION MOD KIT SUPPORT

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 $33.5 million.

What is the period of performance?

Start: 2008-04-11. End: 2015-09-17.

What is the specific nature of the GSSR system and its importance to defense operations?

The GSSR (Ground Support and Signal Relay) system is a specialized component likely related to enhancing communication, surveillance, or operational support capabilities for military aircraft. While the exact details are often classified or proprietary, such systems are crucial for maintaining situational awareness, secure communications, and effective mission execution in complex operational environments. Their importance stems from enabling critical functions that support troop safety and mission success. The modification kits likely upgrade existing aircraft to incorporate these advanced GSSR capabilities, ensuring fleet modernization and continued relevance in evolving threat landscapes.

Why was this contract awarded on a sole-source basis to The Boeing Company?

Sole-source awards are typically justified when only one contractor possesses the unique capability, technology, or proprietary knowledge required to fulfill the government's needs. For The Boeing Company, this could be due to their role as the original manufacturer of the aircraft being modified, possessing unique design data, specialized tooling, or intellectual property related to the GSSR system integration. Alternatively, it might be a follow-on contract where the initial development was competitive, but subsequent modifications or production require the original developer's expertise to ensure compatibility and avoid costly redesigns or integration issues. The government would have had to formally justify this sole-source determination.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risk with a sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible value for its money. Another risk is contractor complacency; with no immediate competition, the incentive to innovate or improve efficiency might be reduced. Furthermore, the long duration (over 7 years) increases the risk of scope creep or the government becoming locked into a solution that may become outdated or less cost-effective over time compared to emerging technologies or alternative approaches that were not explored due to the sole-source nature.

How does the Firm Fixed Price (FFP) contract type benefit the government in this scenario?

The Firm Fixed Price (FFP) contract type is generally advantageous for the government, especially in situations with well-defined requirements, as it shifts the majority of cost overrun risk to the contractor. For this $33.5 million contract, Boeing is obligated to deliver the specified GSSR production, installation, and mod kit support for the agreed-upon price. If Boeing's costs exceed their estimate, their profit margin decreases; conversely, if they manage costs effectively, their profit increases. This structure provides budget certainty for the government, as the final price is fixed, barring any contract modifications or unforeseen government-caused delays.

What is the historical spending trend for similar aircraft modification or GSSR-related contracts?

Analyzing historical spending for similar contracts is challenging without a specific Product Service Code (PSC) and more detailed service descriptions. However, aircraft modification programs, particularly for major defense platforms, represent a significant and ongoing investment for the Department of Defense. Spending can range from millions for specific kit installations to billions for fleet-wide upgrades or modernization efforts. Contracts for specialized systems like GSSR, especially when sole-sourced and involving integration onto existing airframes, often represent substantial, long-term commitments due to the complexity and the need for specialized expertise, typically awarded to original equipment manufacturers or their prime contractors.

Are there any performance metrics or oversight mechanisms detailed for this contract?

While the provided data does not detail specific performance metrics, standard government contracts, especially those managed by agencies like the Defense Contract Management Agency (DCMA), include clauses for performance monitoring and acceptance criteria. For a Firm Fixed Price contract, performance is typically measured against the timely delivery of goods and services that meet the specified quality standards. Oversight would involve contract administration by DCMA, potentially including site visits, technical reviews, and acceptance testing. However, the specifics of these metrics and oversight procedures are not publicly detailed in the summary data.

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: $45,853,934

Exercised Options: $33,548,026

Current Obligation: $33,507,622

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365701D2050

IDV Type: IDC

Timeline