Boeing awarded $60.1M for NAVAIR IPS, a sole-source contract for aircraft parts

Contract Overview

Contract Amount: $60,170,171 ($60.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-12-20

End Date: 2020-01-31

Contract Duration: 407 days

Daily Burn Rate: $147.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVAIR IPS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $60.2 million to THE BOEING COMPANY for work described as: NAVAIR IPS Key points: 1. Contract awarded to a single, large defense contractor, limiting competitive pricing. 2. Fixed-price contract type suggests cost risks are primarily borne by the contractor. 3. Contract duration of 407 days indicates a relatively short-term need. 4. The award falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a specialized sector. 5. No small business set-aside was utilized, potentially impacting smaller suppliers. 6. The contract was issued via a delivery order, suggesting it's part of a larger framework agreement.

Value Assessment

Rating: fair

Benchmarking the value of this $60.1 million contract is challenging without specific performance metrics or comparable sole-source awards. The firm fixed-price structure is generally favorable for the government in managing cost overruns. However, the lack of competition inherent in a sole-source award means there's no direct market comparison to assess if the pricing is truly competitive. The value proposition hinges on the necessity and unique capability provided by The Boeing Company for the NAVAIR IPS system.

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 among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of a required item or service. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to ensure the most cost-effective solution is selected.

Public Impact

The primary beneficiaries are likely the U.S. Navy's aviation programs relying on the NAVAIR IPS. Services delivered include the provision of 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' essential for aircraft maintenance and operation. The geographic impact is primarily centered around the contractor's facilities and the Navy installations where the parts will be utilized. Workforce implications include employment at The Boeing Company and potentially its subcontractors involved in the manufacturing process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits price competition.
Lack of transparency in the justification for sole-source award.
Potential for cost creep if not closely managed due to lack of competitive pressure.

Positive Signals

Firm fixed-price contract type shifts cost risk to the contractor.
Award to a major defense contractor suggests established capabilities.
Delivery order structure may indicate efficient procurement within an existing framework.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Contracts for aircraft parts fall within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sub-sector. This segment is critical for maintaining the operational readiness of military fleets. Spending in this area is often driven by specific platform needs and sustainment requirements, with large, established prime contractors like Boeing playing a dominant role.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly detailed in the provided data. The award to a large prime contractor like Boeing suggests that any small business involvement would likely be through subcontracts awarded by Boeing, rather than direct government set-asides. This limits direct opportunities for small businesses to compete for this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to control costs. Transparency regarding the justification for the sole-source award and the specific deliverables would be key areas for oversight.

Related Government Programs

NAVAIR Procurement
Aircraft Parts Manufacturing
Defense Logistics Support
Boeing Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Limited public data on justification for sole-source.
Potential for contractor complacency due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.2 million to THE BOEING COMPANY. NAVAIR IPS

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 $60.2 million.

What is the period of performance?

Start: 2018-12-20. End: 2020-01-31.

What is the specific nature of the NAVAIR IPS system and why is it critical for Navy aviation?

The NAVAIR IPS (Naval Air Systems Command Integrated Planning System) is a critical component within the U.S. Navy's aviation infrastructure. While specific details of the IPS system are often classified or proprietary, it generally refers to systems that support the planning, management, and execution of naval aviation operations. This can encompass a wide range of functions, including flight scheduling, maintenance planning, logistics support, and operational readiness assessment. Its criticality stems from ensuring that naval aircraft are mission-capable, efficiently maintained, and deployed effectively. The system likely integrates data from various sources to provide a comprehensive operational picture, enabling informed decision-making for fleet commanders and maintenance personnel. The parts procured under this contract are essential for the continued functioning and sustainment of this vital system.

What is the justification for awarding this contract on a sole-source basis to The Boeing Company?

The justification for a sole-source award typically rests on specific criteria outlined in federal acquisition regulations, such as the existence of unique capabilities, proprietary technology, or the absence of adequate competition. For The Boeing Company, this could be due to their role as the original equipment manufacturer (OEM) of the aircraft or system requiring these specific parts, possessing unique tooling, design data, or technical expertise essential for producing or servicing the NAVAIR IPS components. Alternatively, the parts themselves might be proprietary to Boeing, or the volume and specialized nature of the requirement might make it impractical or uneconomical to solicit bids from other potential suppliers. A formal justification document, often found in contract award databases, would detail the precise reasons.

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

The firm fixed-price (FFP) contract type is generally advantageous for the government, especially in sole-source situations, as it shifts the majority of the cost risk to the contractor, The Boeing Company. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes Boeing to manage its expenses efficiently and effectively to maintain profitability. While the government does not benefit from competitive pricing in a sole-source award, the FFP structure provides cost certainty and predictability, protecting the government from unexpected cost overruns that could occur with cost-reimbursement contracts. This allows for more accurate budgeting and financial planning for the NAVAIR IPS sustainment.

What are the potential risks associated with a sole-source award for aircraft parts, even with an FFP structure?

Despite the FFP structure, sole-source awards for aircraft parts carry inherent risks. The primary risk is the potential for inflated pricing due to the absence of competitive bidding. The government may be paying a premium because there is no market pressure to offer the lowest possible price. Another risk is contractor complacency; without the threat of losing future business to competitors, the contractor might be less motivated to innovate or improve efficiency. Furthermore, reliance on a single source can create supply chain vulnerabilities. If Boeing faces production issues, labor disputes, or other disruptions, the availability of critical parts for the NAVAIR IPS could be jeopardized, impacting naval readiness. The government's leverage in negotiating terms or addressing performance issues is also diminished in a sole-source context.

Can we compare this contract's value or pricing to other similar sole-source awards for aircraft parts?

Direct comparison of this $60.1 million contract to other sole-source awards for aircraft parts is difficult without access to detailed pricing breakdowns, specific part numbers, quantities, and the criticality of the components. Sole-source awards are inherently unique, often tied to proprietary systems or specialized manufacturing processes. While The Boeing Company is a major defense contractor, the value and pricing of this specific contract depend heavily on the complexity and volume of the 'Other Aircraft Parts' required for the NAVAIR IPS. Benchmarking would ideally involve comparing the per-unit cost or total value against other sole-source contracts for similar types of components, performed by the same or comparable contractors, for similar end-users (e.g., other Navy aviation systems). However, such granular data is rarely publicly available for sole-source procurements.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: $60,192,002

Exercised Options: $60,192,002

Current Obligation: $60,170,171

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $24,306,772

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRPA114D002U

IDV Type: IDC

Timeline