Boeing Awarded $947.7M for Systems Engineering Services, Raising Oversight Concerns
Contract Overview
Contract Amount: $9,811,666 ($9.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2005-12-15
End Date: 2008-05-31
Contract Duration: 898 days
Daily Burn Rate: $10.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: 200604!000041!5700!FA8102!OC-ALC/LAD !F4261099D0006 !A!N! !N!SD29 ! !20051215!20061231!947764452!947764452!009256819!N!THE BOEING COMPANY !801 IRVING WICK DR W !NEWARK !OH!43056!54040!089!39!NEWARK !LICKING !OHIO !+000002035038!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !5!A!S! ! ! !99990909!B! ! !A! !D!N!R!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: HEATH, LICKING County, OHIO, 43056, UNITED STATES OF AMERICA
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $9.8 million to THE BOEING COMPANY for work described as: 200604!000041!5700!FA8102!OC-ALC/LAD !F4261099D0006 !A!N! !N!SD29 ! !20051215!20061231!947764452!947764452!009256819!N!THE BOEING COMPANY !801 IRVING WICK DR W !NEWARK !OH!43056!54040!089!39!NEWARK !LICK… Key points: 1. Significant contract value of $947.7 million for systems engineering services. 2. Sole-source award to The Boeing Company, limiting competition. 3. Potential for cost overruns due to Cost Plus Award Fee contract type. 4. Services fall under 'Other Aircraft Equipment' within the Defense sector.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure allows for potential cost growth beyond initial estimates. Benchmarking against similar systems engineering contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning competition was not sought. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a nearly $1 billion contract raises concerns about taxpayer value and the potential for inflated pricing.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long duration and cost-plus nature of the contract increase financial risk. Lack of transparency in the sole-source justification warrants further scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Award Fee contract type
- High contract value
- Limited transparency on justification
Positive Signals
- Established contractor (Boeing)
- Services critical to defense systems
Sector Analysis
This contract falls within the Defense sector, specifically for systems engineering services related to aircraft equipment. Spending in this area is substantial, but competitive procurement is crucial for efficiency.
Small Business Impact
This contract was awarded to a large prime contractor, The Boeing Company. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure the government is receiving fair value and that the contractor is performing effectively and efficiently.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- High dollar value
- Potential for cost overruns
- Limited transparency on justification
Tags
search-detection-navigation-guidance-aer, department-of-defense, oh, do, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $9.8 million to THE BOEING COMPANY. 200604!000041!5700!FA8102!OC-ALC/LAD !F4261099D0006 !A!N! !N!SD29 ! !20051215!20061231!947764452!947764452!009256819!N!THE BOEING COMPANY !801 IRVING WICK DR W !NEWARK !OH!43056!54040!089!39!NEWARK !LICKING !OHIO !+000002035038!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !5!A!S! ! ! !999
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $9.8 million.
What is the period of performance?
Start: 2005-12-15. End: 2008-05-31.
What was the specific justification for awarding this contract on a sole-source basis?
The provided data does not contain the specific justification for the sole-source award. Typically, such justifications would involve reasons like unique capabilities, urgent needs, or lack of other responsible sources. Further investigation into the contract file would be required to ascertain the precise rationale.
What are the potential risks associated with the Cost Plus Award Fee structure in this contract?
The Cost Plus Award Fee (CPAF) structure carries inherent risks of cost overruns, as the contractor is reimbursed for allowable costs plus an award fee based on performance. This can incentivize higher spending if not carefully managed and monitored by the government. There's a risk that the 'award' portion could be achieved without optimal cost efficiency.
How can the effectiveness of these systems engineering services be independently verified?
Effectiveness can be verified through rigorous performance metrics, independent testing and evaluation, milestone reviews, and regular technical assessments by government engineers. Comparing delivered capabilities against contract requirements and operational needs is crucial. The award fee structure itself should be tied to measurable performance outcomes.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 801 IRVING WICK DR W, HEATH, OH, 43056
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F4261099D0006
IDV Type: IDC
Timeline
Start Date: 2005-12-15
Current End Date: 2008-05-31
Potential End Date: 2008-05-31 00:00:00
Last Modified: 2015-07-09
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