Boeing awarded $26.9M for E-3 sustaining engineering, a sole-source contract for aircraft manufacturing
Contract Overview
Contract Amount: $26,924,849 ($26.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2012-01-01
End Date: 2016-11-30
Contract Duration: 1,795 days
Daily Burn Rate: $15.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CY12/13 E-3 SUSTAINING ENGINEERING SERVICES
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $26.9 million to THE BOEING COMPANY for work described as: CY12/13 E-3 SUSTAINING ENGINEERING SERVICES Key points: 1. Contract awarded to a single, incumbent provider, raising questions about competitive pricing. 2. Sustaining engineering services are critical for maintaining complex aircraft systems. 3. The contract duration spans over four years, indicating a long-term need. 4. Fixed-price contract type aims to control costs, but competition is absent. 5. The specific North American Industry Classification System (NAICS) code points to aircraft manufacturing. 6. No small business set-aside was utilized for this procurement.
Value Assessment
Rating: questionable
Without competitive bidding, it is difficult to benchmark the value for money. The $26.9 million award for sustaining engineering services over nearly four years suggests a significant investment. However, the lack of competition means there's no market-driven price discovery to assess if this represents a fair and reasonable price compared to potential alternatives or historical pricing for similar services from other providers. The firm fixed-price structure offers some cost certainty, but the absence of competition is a primary concern for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition limits the government's ability to solicit bids from multiple vendors, potentially leading to higher prices than if the contract had been open to a wider pool of qualified companies. The absence of bidders means no direct comparison of pricing or technical solutions was available.
Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without multiple bids, there is less assurance that the negotiated price reflects the lowest possible cost for these essential engineering services.
Public Impact
The primary beneficiary is the Department of Defense, ensuring the continued operational readiness of the E-3 aircraft fleet. Services delivered include sustaining engineering, crucial for maintaining the airworthiness and functionality of the E-3 AWACS (Airborne Warning and Control System). The geographic impact is likely centered around E-3 operational bases and maintenance facilities within the United States. This contract supports specialized engineering roles, potentially impacting a workforce skilled in aerospace and defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings for taxpayers.
- Lack of transparency in the justification for sole-source award.
- Potential for vendor lock-in due to specialized nature of sustaining engineering.
- No small business participation noted, missing opportunities for smaller firms.
Positive Signals
- Contract awarded to a known entity (Boeing) with established expertise in E-3 aircraft.
- Firm fixed-price contract provides cost predictability for the government.
- Sustaining engineering is essential for maintaining critical defense assets.
- Contract duration indicates a stable, long-term requirement.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. The market for sustaining engineering for legacy aircraft like the E-3 is specialized, often dominated by the original equipment manufacturer (OEM) due to proprietary knowledge and design data. Comparable spending benchmarks are difficult to establish without competitive data, but significant investments are typical for maintaining complex military aviation platforms.
Small Business Impact
This contract did not include a small business set-aside, nor is there an indication of subcontracting to small businesses. The sole-source nature of the award, particularly to a large prime contractor like Boeing, often limits opportunities for small businesses to participate directly or indirectly. This represents a missed opportunity to leverage the capabilities of the small business industrial base within the aerospace and defense sector.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver services within the agreed-upon price. Transparency is limited due to the sole-source nature, but contract award details are generally publicly available.
Related Government Programs
- E-3 AWACS Sustainment
- Aircraft Engineering Services
- Defense Logistics Agency Support Contracts
- Air Force Materiel Command Contracts
- Aerospace Engineering and Maintenance
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns without competitive pressure
Tags
defense, department-of-defense, aircraft-manufacturing, sustaining-engineering, sole-source, firm-fixed-price, e-3-awacs, boeing, dcma, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.9 million to THE BOEING COMPANY. CY12/13 E-3 SUSTAINING ENGINEERING SERVICES
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 $26.9 million.
What is the period of performance?
Start: 2012-01-01. End: 2016-11-30.
What is the specific justification provided for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which is a common designation for sole-source awards. Typically, such justifications stem from reasons like the existence of only one responsible source, urgency, or specific statutory authority. For sustaining engineering of complex platforms like the E-3, the original equipment manufacturer (OEM), in this case, Boeing, often possesses unique technical data, intellectual property, and specialized knowledge essential for maintenance and upgrades. Without access to the detailed justification document, it's presumed that Boeing was deemed the only viable source capable of providing these critical services without significant delays or unacceptable costs associated with technology transfer or re-learning.
How does the $26.9 million award compare to historical spending on E-3 sustaining engineering?
The provided data only includes information for this specific contract award of $26.9 million from 2012 to 2016. To compare this to historical spending, one would need access to historical contract databases and budget information for the E-3 program over its lifecycle. Without that broader context, it's impossible to determine if this award represents an increase, decrease, or stable level of spending compared to previous periods. Factors such as inflation, changes in aircraft fleet size, evolving maintenance requirements, and the scope of engineering tasks performed in prior years would all influence historical spending patterns and make direct comparisons challenging.
What are the primary risks associated with a sole-source contract for sustaining engineering?
The primary risks associated with a sole-source contract for sustaining engineering include a lack of competitive pricing, potentially leading to higher costs for the government and taxpayers. Without competition, there is reduced incentive for the contractor to innovate or improve efficiency, as they face no threat from alternative providers. Furthermore, sole-source awards can lead to vendor lock-in, making it difficult and costly to switch providers in the future, even if performance or pricing becomes unsatisfactory. There's also a risk that the contractor may not prioritize the government's needs as highly as they would in a competitive environment.
What is the expected impact of these sustaining engineering services on the E-3 fleet's operational readiness?
Sustaining engineering services are critical for maintaining the operational readiness of the E-3 fleet. These services typically involve addressing design deficiencies, implementing modifications, resolving technical issues, and ensuring the aircraft systems remain compliant with evolving standards and threats. By providing ongoing engineering support, this contract aims to minimize downtime, enhance reliability, and extend the service life of the E-3 aircraft. Ultimately, effective sustaining engineering directly contributes to the Air Force's ability to deploy and operate these vital airborne warning and control systems when needed.
Are there any performance metrics or key performance indicators (KPIs) associated with this contract?
The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) for this contract. However, for sustaining engineering services on a critical defense asset like the E-3, typical KPIs would likely include metrics related to response time for technical issues, resolution rates of reported problems, successful implementation of engineering changes, adherence to schedules for modifications, and overall impact on aircraft availability and mission capability. The firm fixed-price nature of the contract implies that meeting the defined scope of work within budget is a primary performance expectation, with potential penalties or remedies for non-performance.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
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: $27,006,351
Exercised Options: $26,924,849
Current Obligation: $26,924,849
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F1962801D0016
IDV Type: IDC
Timeline
Start Date: 2012-01-01
Current End Date: 2016-11-30
Potential End Date: 2016-11-30 00:00:00
Last Modified: 2019-04-20
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