Boeing awarded $54.3M for aircraft parts, a sole-source contract with a short performance period

Contract Overview

Contract Amount: $54,352,157 ($54.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-09-27

End Date: 2019-03-16

Contract Duration: 170 days

Daily Burn Rate: $319.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8505922004!PERFORMANCE BASED SUPPORT

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $54.4 million to THE BOEING COMPANY for work described as: 8505922004!PERFORMANCE BASED SUPPORT Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Short performance duration suggests a need for immediate or urgent support. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. Contract is a delivery order against an existing contract vehicle. 5. No small business set-aside was applied to this specific award. 6. Geographic location of performance is in Missouri.

Value Assessment

Rating: fair

The contract value of $54.3 million for aircraft parts is significant, but the lack of competition makes a direct value-for-money assessment difficult. Without comparable sole-source awards or open market benchmarks, it's challenging to determine if the pricing is optimal. The short performance period of approximately 170 days also limits the scope for extensive cost analysis. However, the firm fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded as a sole-source delivery order. This indicates that the Defense Logistics Agency likely identified The Boeing Company as the only responsible source capable of fulfilling the requirement. The absence of a competitive bidding process means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Sole-source awards limit taxpayer value by bypassing competitive pressures that typically drive down prices. This can result in the government paying a premium for goods or services.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units requiring the specified aircraft parts. Services delivered include the provision of 'Other Aircraft Parts and Auxiliary Equipment'. Geographic impact is concentrated in Missouri, where the performance is scheduled. Workforce implications are likely within The Boeing Company's manufacturing and logistics operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in government spending.
Short performance period might indicate reactive rather than strategic procurement.

Positive Signals

Firm Fixed Price contract type offers cost predictability.
Award to a major defense contractor suggests access to specialized capabilities.
Delivery order mechanism implies an existing, pre-vetted contract vehicle.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for such components is dominated by large, established manufacturers like Boeing. Spending in this category is critical for maintaining military readiness. Comparable spending benchmarks are difficult to establish without knowing the specific part numbers and quantities, but overall defense procurement for aircraft components represents a substantial portion of the defense budget.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Boeing voluntarily engages small business subcontractors. Further investigation into Boeing's subcontracting plans would be needed to assess broader small business implications.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. The Defense Logistics Agency's internal procurement oversight processes are also relevant. Transparency is limited due to the sole-source nature, but contract award data is publicly available through federal procurement databases.

Related Government Programs

Defense Logistics Agency Procurement
Aircraft Parts and Equipment
Sole-Source Defense Contracts
Firm Fixed Price Contracts
Delivery Orders

Risk Flags

Sole-source award lacks competitive pricing validation.
Short performance period may indicate urgency or limited scope.
No small business participation explicitly stated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.4 million to THE BOEING COMPANY. 8505922004!PERFORMANCE BASED 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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $54.4 million.

What is the period of performance?

Start: 2018-09-27. End: 2019-03-16.

What is the historical spending pattern for The Boeing Company with the Defense Logistics Agency for similar aircraft parts?

Analyzing historical spending data for The Boeing Company with the Defense Logistics Agency (DLA) for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) would reveal trends in contract values, award types, and competition levels. A review of past awards could indicate if sole-source awards are common for this contractor and this specific product category, or if competitive procurements have been the norm. Understanding this history can provide context for the current $54.3 million award, helping to assess if it aligns with or deviates from established patterns. For instance, if past awards were consistently competitive and for lower values, this sole-source award might warrant closer scrutiny regarding justification and pricing.

What specific aircraft parts are covered under this $54.3 million contract, and what is their criticality to military operations?

The provided data categorizes the contract under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413), but does not specify the exact parts. To assess criticality, a detailed breakdown of the parts list would be required. These could range from common consumables to highly specialized components for specific aircraft platforms (e.g., fighters, bombers, transport planes). Understanding the criticality involves evaluating the impact of a shortage or failure of these parts on aircraft availability, mission readiness, and overall operational capability. High-criticality parts often justify sole-source awards due to unique manufacturing requirements or limited supplier bases, but also necessitate rigorous oversight to ensure availability and fair pricing.

What justification was provided for awarding this contract on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency that precludes full and open competition. For this contract, the Defense Logistics Agency would have documented the rationale, potentially citing proprietary technology, unique manufacturing capabilities held exclusively by The Boeing Company, or a critical and immediate need that could not be met through a competitive process within the required timeframe. The justification is crucial for ensuring that taxpayer funds are used appropriately and that competition is only bypassed when absolutely necessary and legally permissible.

How does the firm fixed-price (FFP) contract type mitigate risk for the government in this sole-source scenario?

The Firm Fixed-Price (FFP) contract type is advantageous for the government, especially in sole-source situations, because it establishes a ceiling price that is not subject to adjustment based on the contractor's cost experience. This shifts the risk of cost overruns entirely to the contractor, The Boeing Company. For the government, it provides budget certainty and predictability. Even though the price was not determined through competition, the FFP structure ensures that the government will pay the agreed-upon amount, regardless of the contractor's actual costs incurred in producing the aircraft parts. This contrasts with cost-reimbursement contracts where the government bears the risk of higher-than-expected costs.

What is the typical duration for contracts of this nature (aircraft parts delivery orders), and how does the 170-day period compare?

The typical duration for aircraft parts delivery orders can vary significantly based on the nature of the parts, the quantity ordered, and the urgency of the requirement. Short-term delivery orders, like this 170-day contract (approximately 5.6 months), often address immediate operational needs, stock replenishment for critical items, or support for specific, time-bound missions. Longer-term contracts might involve sustainment, upgrades, or development of new components. A 170-day period suggests a focused, relatively short-term requirement. If this is part of a larger, ongoing need, it might be one of several delivery orders issued under a broader contract vehicle, with subsequent orders potentially having different durations.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134

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: $54,352,157

Exercised Options: $54,352,157

Current Obligation: $54,352,157

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $2,410,401

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRPA114D002U

IDV Type: IDC

Timeline