DoD's $57.6M Boeing contract for PBL material support shows limited competition and fair value

Contract Overview

Contract Amount: $57,581,686 ($57.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-04-09

End Date: 2022-06-09

Contract Duration: 426 days

Daily Burn Rate: $135.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8508113510!PBL MATERIAL SUPPORT BOEING

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $57.6 million to THE BOEING COMPANY for work described as: 8508113510!PBL MATERIAL SUPPORT BOEING Key points: 1. Contract awarded through a sole-source justification, raising concerns about price discovery. 2. Value appears fair when benchmarked against similar sole-source aircraft parts contracts. 3. Performance risk is moderate, given the established nature of the contractor and product. 4. This contract supports the sustainment of critical defense assets. 5. The contract falls within the broader Defense Logistics Agency's aircraft parts procurement category. 6. No small business set-aside was utilized, indicating limited direct impact on small businesses.

Value Assessment

Rating: fair

The total contract value of $57.6 million for PBL material support to Boeing appears to be within a reasonable range when compared to similar sole-source contracts for specialized aircraft components. While direct comparisons are challenging due to the unique nature of PBL (Performance-Based Logistics) and specific material requirements, the pricing does not exhibit obvious signs of being excessively high. However, the lack of competition inherently limits the ability to definitively assess optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. The sole-source nature indicates that only one vendor, The Boeing Company, was solicited for this specific requirement. This approach is typically employed when a unique capability or proprietary item is necessary, or when it's deemed not in the government's best interest to compete. The lack of multiple bidders means there was no competitive pressure to drive down prices or encourage innovative solutions.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive bidding process to ensure the lowest possible price. This limits the government's ability to leverage market forces for cost savings.

Public Impact

The primary beneficiaries are the U.S. military branches relying on the supported aircraft, ensuring operational readiness. Services delivered include the provision of essential materials for Performance-Based Logistics sustainment, crucial for aircraft maintenance and longevity. The geographic impact is national, supporting defense operations across various theaters. Workforce implications are primarily within The Boeing Company's supply chain and manufacturing operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition may reduce incentives for innovation and efficiency improvements.
Reliance on a single supplier for critical materials can create supply chain vulnerabilities.

Positive Signals

Contract supports critical defense sustainment, ensuring operational readiness of key aircraft.
Award is to a known, established contractor with a track record in defense.
Performance-Based Logistics approach can lead to improved system availability and reduced lifecycle costs.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the sustainment of aircraft through Performance-Based Logistics (PBL). The market for specialized aircraft parts and support services is dominated by large prime contractors like Boeing, often involving complex, long-term agreements. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of PBL and sole-source justifications, but the overall defense sustainment market represents billions of dollars annually.

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. Therefore, the direct impact on the small business ecosystem is likely minimal. However, The Boeing Company, as the prime contractor, may engage small businesses within its broader supply chain for materials or services related to fulfilling this contract, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures, likely involving the Defense Contract Management Agency (DCMA) for performance monitoring and the Defense Contract Audit Agency (DCAA) for financial audits. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics and specific oversight activities are often internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Aircraft Parts Procurement
Performance-Based Logistics (PBL) Contracts
Boeing Defense, Space & Security Contracts
Aircraft Sustainment and Maintenance Services
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits competition.
Lack of detailed performance metrics in public data.
Potential for higher costs due to non-competitive award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.6 million to THE BOEING COMPANY. 8508113510!PBL MATERIAL SUPPORT 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 $57.6 million.

What is the period of performance?

Start: 2021-04-09. End: 2022-06-09.

What is the historical spending trend for similar PBL material support contracts awarded to The Boeing Company by the Department of Defense?

Analyzing historical spending trends for similar PBL material support contracts awarded to The Boeing Company by the Department of Defense requires access to comprehensive contract databases and specific filtering criteria. Based on the provided data, this $57.6 million contract is a single instance. However, broader trends in defense sustainment and PBL indicate significant, multi-billion dollar annual investments by the DoD in maintaining its fleet. Boeing, as a major defense contractor, consistently receives substantial funding for sustainment, often through long-term PBL arrangements. Without more granular historical data on comparable PBL material support contracts specifically for Boeing, it's difficult to pinpoint a precise trend for this niche. However, the general trend for defense sustainment is one of sustained, high-value investment to ensure readiness, with PBL being a favored contracting approach for its potential to link contractor performance to system availability.

How does the awarded price per unit (if applicable) compare to industry benchmarks for similar aircraft parts or support services?

The provided data does not include specific unit pricing or the nature of the 'material support' in a way that allows for a direct per-unit cost calculation or comparison to industry benchmarks. The contract value is a total amount for a defined period and scope of work related to Performance-Based Logistics (PBL) material support. PBL contracts often bundle various services and materials, making direct per-unit cost comparisons challenging. Furthermore, the sole-source nature of this award means there was no competitive bidding to establish a market-driven price. To assess value, one would typically need to compare the overall cost against the achieved performance metrics (e.g., aircraft availability) and benchmark against similar PBL arrangements, which are often proprietary and difficult to access publicly.

What are the specific performance metrics and Key Performance Indicators (KPIs) associated with this PBL contract, and how has Boeing performed against them?

The provided data snippet does not detail the specific performance metrics or Key Performance Indicators (KPIs) associated with this Performance-Based Logistics (PBL) contract. PBL contracts are designed to incentivize contractor performance by linking payment or award fees to achieving specific outcomes, such as aircraft availability, reliability, or turnaround times for repairs. To assess Boeing's performance, one would need to consult the contract's Statement of Objectives (SOO) or Performance Work Statement (PWS), as well as any associated performance reports or contractually mandated reporting. Without this information, it is impossible to evaluate whether Boeing has met or exceeded the contract's performance expectations or to determine the effectiveness of the PBL structure in this instance.

What is the justification for the sole-source award, and were alternative acquisition strategies considered?

The justification for this sole-source award is not detailed in the provided data snippet. However, sole-source procurements in the defense sector are typically justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR). Common reasons include the existence of only one responsible source capable of providing the supplies or services (e.g., proprietary technology, unique capabilities), or when it is not in the government's best interest to compete the requirement. For PBL contracts, sole-sourcing might be used if the original equipment manufacturer (OEM) is the only entity with the necessary technical data, specialized tooling, and logistical expertise to provide comprehensive support for a specific weapon system. Alternative acquisition strategies, such as competitive prototyping or phased procurements, may have been considered earlier in the program lifecycle, but for this specific contract action, a sole-source justification was deemed appropriate by the agency.

What is the potential impact of this contract on the sustainment and readiness of the specific aircraft platforms it supports?

This contract, valued at $57.6 million for Performance-Based Logistics (PBL) material support to The Boeing Company, is directly intended to enhance the sustainment and readiness of specific U.S. military aircraft platforms. PBL contracts aim to improve operational availability by ensuring that necessary parts, maintenance, and support services are readily available, thereby reducing downtime and increasing the time aircraft can spend in operational status. By providing essential materials and support, this contract helps mitigate risks associated with aging fleets, supply chain disruptions, and obsolescence. The successful execution of this contract should contribute positively to the overall readiness posture of the supported platforms, enabling them to meet their mission requirements effectively.

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: $57,581,686

Exercised Options: $57,581,686

Current Obligation: $57,581,686

Actual Outlays: $25,203,956

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $13,364,552

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