Boeing awarded $66.5M contract for NAVAIR IPS, raising questions about competition and value

Contract Overview

Contract Amount: $66,463,378 ($66.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2022-01-01

End Date: 2025-08-06

Contract Duration: 1,313 days

Daily Burn Rate: $50.6K/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 $66.5 million to THE BOEING COMPANY for work described as: NAVAIR IPS Key points: 1. The contract's value, while substantial, requires further benchmarking against similar procurements to ascertain true value for money. 2. A sole-source award limits competitive pressures, potentially impacting pricing and innovation. 3. The duration of the contract and its delivery order structure warrant scrutiny for potential cost overruns or scope creep. 4. Performance context is limited due to the 'Other Aircraft Parts' classification, necessitating a deeper dive into the specific services provided. 5. This contract falls within the broader Defense sector, specifically supporting aircraft parts and auxiliary equipment.

Value Assessment

Rating: fair

Benchmarking this $66.5 million contract against similar sole-source awards for aircraft parts is challenging without more specific service details. The firm fixed-price structure offers some cost control, but the lack of competition means there's no direct price comparison to assess if the government received optimal value. Further analysis of historical pricing for similar components or services would be needed to definitively gauge value.

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 only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that pricing and terms were negotiated directly with The Boeing Company, without the benefit of competitive bids to drive down costs or encourage innovation.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as competitive market forces are absent. This limits the government's ability to secure the best possible deal and may result in less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically naval aviation programs, which will receive essential aircraft parts and auxiliary equipment. The services delivered are critical for maintaining the operational readiness of naval aircraft fleets. The geographic impact is primarily centered around the contractor's facilities in Missouri, where the contract is managed. Workforce implications include continued employment for skilled labor within The Boeing Company's supply chain and manufacturing operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source nature limits opportunities for new entrants and innovation.
Contract duration and delivery order structure could obscure true costs.
Limited public data on specific parts/services hinders value assessment.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a major defense contractor suggests established capabilities.
Contract supports critical naval aviation readiness.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such components is often characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long development cycles. Spending in this area is driven by defense budgets and the need to maintain aging aircraft fleets, with major contractors like Boeing playing a significant role.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting goals for small businesses (sb: false). This suggests that the primary awardee, The Boeing Company, will likely fulfill the contract requirements directly or through its larger supply chain partners, potentially limiting direct opportunities for small businesses on this specific award.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of accountability for cost control. Transparency is moderate, as contract awards are publicly reported, but detailed performance metrics and specific part details are often not readily available to the public.

Related Government Programs

Naval Aviation Maintenance Programs
Aircraft Component Procurement
Defense Logistics Agency Contracts
Aerospace Manufacturing Support

Risk Flags

Sole-source award lacks competitive justification.
Limited transparency on specific parts procured.
Potential for cost overruns due to delivery order structure.
No small business subcontracting noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.5 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 $66.5 million.

What is the period of performance?

Start: 2022-01-01. End: 2025-08-06.

What is the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' being procured under this contract?

The provided data classifies the contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' However, it does not specify the exact components or auxiliary equipment. This category typically includes parts such as landing gear, aircraft engines, propellers, and other specialized components not elsewhere classified. Without more granular detail, it's difficult to assess the criticality or uniqueness of these parts, which impacts the justification for a sole-source award and the potential for competitive sourcing in the future.

How does the $66.5 million contract value compare to similar sole-source procurements for aircraft parts by the Department of Defense?

Direct comparison of this $66.5 million contract value to similar sole-source procurements is challenging without knowing the specific types of aircraft parts and their complexity. However, for major defense contractors like Boeing, contracts in the tens of millions are common for specialized components or sustainment services. The absence of competition means there's no direct benchmark to assess if this price is optimal. A thorough value analysis would require examining the historical pricing trends for comparable sole-source awards, considering factors like inflation, technological advancements, and the specific criticality of the parts.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risk of a sole-source award of this magnitude ($66.5 million) and duration (ending August 2025) is the potential for inflated pricing due to the lack of competitive pressure. Taxpayers may end up paying more than if the contract had been competed. Additionally, sole-source awards can stifle innovation by not encouraging other capable companies to develop competing solutions. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially leading to less favorable terms in future procurements.

What is The Boeing Company's track record with similar NAVAIR contracts?

The Boeing Company is a major defense contractor with a long history of supplying aircraft, components, and services to the U.S. military, including Naval Air Systems Command (NAVAIR). While specific details on past NAVAIR contracts for 'Other Aircraft Parts and Auxiliary Equipment' are not provided here, Boeing consistently holds numerous large-value contracts across various defense platforms. Their track record generally involves delivering complex systems and components, though like any large contractor, they have faced scrutiny regarding cost, schedule, and performance on specific programs. A deeper dive into past performance reviews and contract histories for similar items would provide more specific insights.

What are the implications of the 'Delivery Order' (DO) contract type for cost and oversight?

The contract is awarded as a 'Delivery Order' (DO) under a larger basic ordering agreement or indefinite-delivery/indefinite-quantity (IDIQ) contract. This means the total value ($66.5M) represents the ceiling, and specific orders will be placed as needed. While this provides flexibility, it can also make precise cost tracking and oversight more complex compared to a single, fully defined contract. The government only commits funds as delivery orders are issued. Oversight needs to ensure that each delivery order is justified, priced appropriately, and aligns with the overall program objectives to prevent cost overruns or scope creep over the contract's life.

What is the historical spending pattern for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) by the Department of Defense?

Historical spending on NAICS code 336413 by the Department of Defense (DoD) is substantial, reflecting the continuous need for aircraft parts and maintenance across various naval and air force platforms. While specific annual figures fluctuate based on defense priorities, modernization efforts, and the operational tempo of aircraft fleets, the DoD consistently allocates billions of dollars annually towards aircraft components and related manufacturing. This particular $66.5 million contract represents a segment of that broader spending, underscoring the ongoing investment in sustaining and upgrading military aviation capabilities.

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: $66,463,378

Exercised Options: $66,463,378

Current Obligation: $66,463,378

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $15,694,917

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