DoD awards $115M to Boeing for performance-based support, raising questions on competition and value
Contract Overview
Contract Amount: $115,393,602 ($115.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-04-10
End Date: 2019-06-09
Contract Duration: 425 days
Daily Burn Rate: $271.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8505323388!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 $115.4 million to THE BOEING COMPANY for work described as: 8505323388!PERFORMANCE BASED SUPPORT Key points: 1. Significant contract value awarded to a single, large defense contractor. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Performance-based contract structure aims for efficiency, but oversight is crucial. 4. Sector context: Defense Logistics Agency relies on established prime contractors for critical aircraft parts.
Value Assessment
Rating: questionable
The contract value of $115M is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar performance-based support contracts for aircraft parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition could lead to inflated prices, directly impacting taxpayer funds allocated to defense spending.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. Reliance on a single contractor could create vulnerabilities in the supply chain. The effectiveness of performance-based metrics in ensuring optimal value needs close monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
Positive Signals
- Performance-based contract structure
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for aircraft parts. Spending benchmarks in this area are often high due to specialized requirements and R&D costs, but competition is key to controlling these expenses.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor, and there is no indication of small business participation. This award does not appear to support small business goals.
Oversight & Accountability
Given the sole-source nature of this award, robust oversight by the Defense Logistics Agency is essential to ensure performance standards are met and costs are justified. Tracking key performance indicators will be critical.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competitive bidding
- Sole-source award
- High contract value without clear justification
- Potential for inflated pricing
- Limited small business participation
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $115.4 million to THE BOEING COMPANY. 8505323388!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 $115.4 million.
What is the period of performance?
Start: 2018-04-10. End: 2019-06-09.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a justification, such as the unique capabilities of the contractor or urgent need. Without this justification, it's impossible to assess the fairness of the pricing or the necessity of avoiding competition. Further investigation into the contract file is needed.
How does the performance of Boeing on this contract compare to industry benchmarks for similar support services, and what are the risks if performance falters?
The contract is performance-based, suggesting metrics are in place. However, without access to those specific metrics and Boeing's historical performance data, a direct comparison is difficult. Risks if performance falters include potential mission delays, increased operational costs for the DoD, and the challenge of finding an alternative provider quickly due to the sole-source nature.
What is the long-term strategic impact of awarding such a significant contract without competition on the overall defense supply chain for aircraft parts?
Awarding a large contract like this without competition can stifle innovation and reduce market pressure on pricing for other potential suppliers. It reinforces the dominance of incumbent contractors, potentially leading to less resilient supply chains and higher costs over time. This could limit the DoD's flexibility in sourcing critical parts in the future.
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: $115,393,602
Exercised Options: $115,393,602
Current Obligation: $115,393,602
Subaward Activity
Number of Subawards: 367
Total Subaward Amount: $92,372,188
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPRPA114D002U
IDV Type: IDC
Timeline
Start Date: 2018-04-10
Current End Date: 2019-06-09
Potential End Date: 2019-06-09 00:00:00
Last Modified: 2020-02-12
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