Boeing receives $31.1M for PBL Material Support, a sole-source contract for aircraft manufacturing

Contract Overview

Contract Amount: $31,991,400 ($32.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-11-10

End Date: 2022-11-18

Contract Duration: 373 days

Daily Burn Rate: $85.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8508658898!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 $32.0 million to THE BOEING COMPANY for work described as: 8508658898!PBL MATERIAL SUPPORT BOEING Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Focus on sustainment and material support suggests a critical role in maintaining existing defense assets. 3. The contract's duration and value indicate a significant, ongoing commitment to this specific supplier. 4. Performance context is limited without details on specific deliverables or performance metrics. 5. Sector positioning within Defense Logistics Agency highlights the importance of specialized support for military aircraft.

Value Assessment

Rating: questionable

This contract's value of $31.1 million for material support is difficult to benchmark without comparative data on similar sole-source sustainment contracts. The absence of competition inherently limits the ability to assess whether the pricing represents fair market value. While Boeing is a primary manufacturer, the lack of competitive bidding means taxpayers may not be receiving the most cost-effective solution. Further analysis would require understanding the unique nature of the materials and support provided.

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 approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of essential goods or services. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit opportunities for taxpayer savings that could be realized through competitive bidding processes. The government relies on the awarded contractor to provide fair pricing without the pressure of market competition.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the continued operational readiness of aircraft. Services delivered include essential material support, likely encompassing parts, maintenance, and sustainment for Boeing aircraft. Geographic impact is likely concentrated where the supported aircraft are stationed or maintained. Workforce implications may involve specialized technical personnel at Boeing and within the DoD for managing the contract and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of transparency in pricing due to non-competitive nature.
Dependence on a single supplier for critical aircraft materials could pose supply chain risks.

Positive Signals

Leverages established relationship and expertise of a primary aircraft manufacturer.
Ensures continuity of support for critical defense assets.
Potential for streamlined logistics and integration due to single-source provider.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on sustainment and material support for aircraft. The market for defense logistics and sustainment is often characterized by long-term relationships and specialized requirements, where original equipment manufacturers like Boeing play a crucial role. Comparable spending benchmarks would involve other sustainment contracts for major defense platforms, which can run into billions of dollars over their lifecycle.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award to a large prime contractor like Boeing suggests that subcontracting opportunities for small businesses may exist, but these are not explicitly mandated or detailed in the provided data. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy and the specific needs for specialized parts or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Accountability measures would be tied to the contract's performance clauses and delivery schedules. Transparency is limited due to the sole-source nature, but contract awards and basic details are usually publicly available through federal procurement databases.

Related Government Programs

Aircraft Sustainment Programs
Defense Logistics Support Contracts
Boeing Defense, Space & Security Contracts
Air Force Material Command Contracts
Navy Aviation Support Contracts

Risk Flags

Sole-source award
Lack of competitive pricing benchmark
Potential for cost overruns
Supplier dependency risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to THE BOEING COMPANY. 8508658898!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 $32.0 million.

What is the period of performance?

Start: 2021-11-10. End: 2022-11-18.

What is the historical spending trend for PBL Material Support with The Boeing Company by the Defense Logistics Agency?

Analyzing historical spending trends for this specific contract requires access to historical contract data beyond the single award provided. However, general trends in defense sustainment spending indicate a consistent need for material support for aging aircraft fleets. Contracts for sustainment are often long-term and can represent a significant portion of a platform's total lifecycle cost. Without specific historical data for this PBL Material Support contract, it's difficult to provide precise figures. However, it is reasonable to infer that similar support has been provided over time, potentially with varying contract values based on evolving needs, inflation, and platform utilization rates. The Defense Logistics Agency's overall budget for aircraft parts and sustainment is substantial, reflecting the ongoing operational demands of the U.S. military.

How does the pricing of this contract compare to similar sole-source sustainment contracts for other major defense platforms?

Directly comparing the pricing of this $31.1 million contract to other sole-source sustainment contracts is challenging without detailed cost breakdowns and specific service inclusions for each. Sole-source contracts inherently lack a competitive benchmark, making 'fairness' a subjective assessment based on contractor reputation, historical pricing, and internal government cost estimates. However, sustainment contracts for major defense platforms, especially those involving complex aircraft, are known to be high-value and long-term. The pricing is influenced by factors such as the criticality of the platform, the rarity of required parts, the level of technical support needed, and the contractor's unique position as the original equipment manufacturer. Without access to proprietary pricing structures or detailed statements of work for comparable contracts, a precise comparison is not feasible. The value of this contract should be viewed in the context of the specific aircraft it supports and the essential nature of uninterrupted material availability for defense readiness.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for material support contracts, KPIs would focus on metrics such as on-time delivery rates for parts, inventory stock levels, response times for technical assistance, and the quality or defect rate of supplied materials. SLAs would define the expected standards for these metrics and potentially outline remedies or penalties for non-performance. Given this is a sole-source contract for PBL (Performance-Based Logistics) Material Support, the emphasis is likely on ensuring the availability and readiness of the supported aircraft systems. The specific KPIs and SLAs would be detailed within the contract's Statement of Work (SOW) and would be crucial for the Defense Logistics Agency to monitor Boeing's performance and ensure value for money, despite the lack of competition.

What is the risk profile associated with relying on The Boeing Company for this specific material support, considering its sole-source nature?

The primary risk associated with this sole-source contract is the potential for cost overruns due to the lack of competitive pressure. Taxpayers may be paying a premium for materials and support that could be obtained at a lower price through a competitive bidding process. Another risk is supplier dependency; the Defense Logistics Agency becomes reliant on Boeing for critical aircraft components, potentially leading to vulnerabilities if Boeing faces production issues, financial instability, or changes its strategic focus. Furthermore, without competition, there is less incentive for the contractor to innovate or significantly improve efficiency beyond what is contractually required. Mitigation strategies would involve robust contract oversight, regular performance reviews, and potentially negotiating favorable terms during contract extensions or future awards, although the sole-source nature inherently limits leverage.

Are there any provisions for technology insertion or upgrades within this contract to ensure long-term platform modernization?

The provided data does not contain information regarding provisions for technology insertion or upgrades within this specific contract. Material support contracts, especially those focused on sustainment, often prioritize maintaining the current operational capability of existing platforms rather than driving modernization. However, Performance-Based Logistics (PBL) contracts can sometimes incorporate elements that encourage or require the contractor to propose improvements or upgrades to enhance reliability, reduce obsolescence, or improve performance over the contract's life. To determine if such provisions exist, one would need to examine the full contract document, specifically the Statement of Work (SOW) and any associated appendices related to sustainment and lifecycle management. Without this detailed information, it is presumed that the contract's primary focus is on the provision of existing materials and support.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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: $31,991,400

Exercised Options: $31,991,400

Current Obligation: $31,991,400

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $3,320,814

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRPA120D005U

IDV Type: IDC

Timeline