DoD's $82.5M Boeing Contract for Aircraft Parts: Sole-Source Award Raises Oversight Concerns
Contract Overview
Contract Amount: $82,518,301 ($82.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2020-04-09
End Date: 2021-12-09
Contract Duration: 609 days
Daily Burn Rate: $135.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8507302835!PBL MATERIAL BOEING
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $82.5 million to THE BOEING COMPANY for work described as: 8507302835!PBL MATERIAL BOEING Key points: 1. Awarded to The Boeing Company for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. 2. Sole-source award indicates limited competition, potentially impacting price discovery. 3. Contract duration of 609 days with a firm fixed price structure. 4. Significant spending within the Defense sector, specifically for aircraft parts.
Value Assessment
Rating: fair
The contract's firm fixed price structure provides cost certainty. However, without competitive bidding, it's difficult to assess if the $82.5 million price represents optimal value compared to market rates for similar aircraft parts.
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 significantly limits price discovery and may lead to higher costs for taxpayers compared to a competitive procurement.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible price for these aircraft parts.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Potential for reduced innovation and quality if suppliers lack competitive pressure. Dependence on a single supplier can create supply chain vulnerabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
Positive Signals
- Firm fixed price contract
- Clear awardee
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the defense industrial base. Spending in this area is substantial, and competitive procurement is generally preferred to ensure cost-effectiveness.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of small business participation in this specific award, suggesting missed opportunities for small business engagement.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price is fair and reasonable. The Defense Logistics Agency should have robust justification for bypassing competitive procedures.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award bypasses competition.
- Potential for inflated pricing due to lack of competitive pressure.
- Limited transparency on the justification for sole-sourcing.
- No apparent small business participation.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $82.5 million to THE BOEING COMPANY. 8507302835!PBL MATERIAL BOEING
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 $82.5 million.
What is the period of performance?
Start: 2020-04-09. End: 2021-12-09.
What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling needs. Without specific documentation, it's difficult to ascertain the precise reason, but it necessitates rigorous review to ensure it aligns with federal procurement regulations and serves the government's best interest.
How does the firm fixed price impact risk for both the government and the contractor in this sole-source scenario?
A firm fixed price (FFP) contract shifts most of the cost risk to the contractor. For the government, it provides budget certainty as the price is set. However, in a sole-source situation, the contractor may have less incentive to control costs if the initial price was not aggressively negotiated due to a lack of competition. This means the government bears the risk of paying a potentially inflated price.
What is the potential impact on future procurements if sole-source awards become a common practice for this type of aircraft part?
If sole-source awards become common for these aircraft parts, it could stifle competition in the long run, potentially leading to higher prices and reduced innovation. Suppliers might anticipate sole-source awards and be less inclined to invest in cost-saving measures or new technologies. This could also discourage new entrants into the market, further concentrating supply.
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: $82,518,301
Exercised Options: $82,518,301
Current Obligation: $82,518,301
Actual Outlays: $14,205,286
Subaward Activity
Number of Subawards: 87
Total Subaward Amount: $8,026,681
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: 2020-04-09
Current End Date: 2021-12-09
Potential End Date: 2021-12-09 00:00:00
Last Modified: 2021-10-14
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