Boeing awarded $55.79M contract for PBL Material, with a 384-day duration

Contract Overview

Contract Amount: $55,793,067 ($55.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-09-20

End Date: 2024-10-08

Contract Duration: 384 days

Daily Burn Rate: $145.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8510144604!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 $55.8 million to THE BOEING COMPANY for work described as: 8510144604!PBL MATERIAL BOEING Key points: 1. Contract awarded to a single, established supplier, raising questions about price competitiveness. 2. The firm-fixed-price structure aims to control costs, but market fluctuations could impact value. 3. Limited competition suggests potential for higher pricing than a multi-bidder scenario. 4. Performance is tied to material delivery, indicating a focus on supply chain reliability. 5. This contract falls within the broader Defense Logistics Agency's aircraft parts manufacturing sector. 6. The duration of over a year suggests a sustained need for these materials.

Value Assessment

Rating: fair

The contract value of $55.79 million for aircraft parts appears substantial. Without specific benchmarks for 'PBL Material' or comparable sole-source procurements, a precise value-for-money assessment is challenging. However, the lack of competition inherently limits the government's ability to secure the best possible price through market forces. The firm-fixed-price type offers cost certainty, but the absence of competitive pressure could mean the price is not optimized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding other potential bidders. The lack of competition means there was no opportunity for multiple companies to bid, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding processes, potentially resulting in a higher overall expenditure for these materials.

Public Impact

The primary beneficiaries are likely military aviation units relying on Boeing aircraft, ensuring continued operational readiness. The contract delivers essential 'PBL Material,' crucial for the maintenance and sustainment of defense platforms. Geographic impact is primarily centered around the contractor's facilities and the locations where the materials are utilized for aircraft support. Workforce implications include continued employment for those involved in the manufacturing and supply of these specialized aircraft components at Boeing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in pricing due to no competitive bidding.
Dependence on a single supplier could create supply chain vulnerabilities if Boeing faces production issues.

Positive Signals

Award to a known, established contractor like Boeing suggests a degree of reliability and existing expertise.
Firm-fixed-price contract provides cost certainty for the government.
The contract duration indicates a planned and sustained need, allowing for efficient resource allocation.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such specialized components is often dominated by a few large manufacturers due to high barriers to entry, including technological expertise, regulatory compliance, and established relationships with defense agencies. Spending in this area is critical for maintaining national defense capabilities and ensuring the operational readiness of military fleets. Comparable spending benchmarks would typically involve other sole-source or limited-competition contracts for similar high-value, specialized aircraft components.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award to a large prime contractor like Boeing suggests that subcontracting opportunities for small businesses may exist, but these are not explicitly detailed or mandated within the provided data. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy and whether they actively seek out and engage small business suppliers for portions of this material requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations, managed by the Defense Logistics Agency. Accountability measures are embedded in the firm-fixed-price structure, requiring delivery of specified materials. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics
Propulsion Systems
Airframe Components
Aerospace Materials

Risk Flags

Sole Source Award
Potential for Price Inflation
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.8 million to THE BOEING COMPANY. 8510144604!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 $55.8 million.

What is the period of performance?

Start: 2023-09-20. End: 2024-10-08.

What is the historical spending pattern for 'PBL Material' with The Boeing Company by the Department of Defense?

Analyzing historical spending for 'PBL Material' with The Boeing Company requires access to historical contract databases. Typically, 'PBL' (Performance-Based Logistics) contracts are long-term agreements focused on product support and sustainment, often involving a bundle of services and spares. If this specific contract is indeed for PBL material, it suggests a continuation or expansion of a prior relationship. Without specific historical data, it's difficult to ascertain trends. However, large defense contractors like Boeing often have multi-year, multi-million dollar contracts for critical components and sustainment, reflecting the ongoing need for maintaining aging aircraft fleets and developing new platforms. The current award of $55.79 million for a 384-day period indicates a significant, albeit time-bound, investment in ensuring the availability of these materials.

How does the pricing of this contract compare to similar sole-source awards for aircraft parts?

Benchmarking the pricing of this $55.79 million sole-source contract for 'PBL Material' against similar awards is challenging without specific details on the exact nature of the 'PBL Material' and comparable contract scopes. Sole-source awards inherently lack the price discovery mechanism of competitive bidding, which can lead to higher prices. To assess value, one would need to compare the unit costs or total price against historical sole-source contracts for equivalent Boeing parts, or against prices charged by other manufacturers for functionally similar components, if available. The firm-fixed-price nature provides cost certainty but does not guarantee optimal pricing. A thorough analysis would involve examining the contractor's cost breakdown, profit margins, and any justification provided for the sole-source award to understand the pricing rationale.

What are the key performance indicators (KPIs) associated with this 'PBL Material' contract?

While the provided data specifies 'PBL Material' and a firm-fixed-price structure, it does not explicitly detail the Key Performance Indicators (KPIs) for this specific contract. Performance-Based Logistics (PBL) contracts typically tie contractor payment and incentives to achieving specific performance outcomes, such as item availability, reliability, or turnaround times for repairs. For 'PBL Material,' KPIs would likely focus on the timely delivery of specified materials, adherence to quality standards, and potentially inventory management or responsiveness to demand fluctuations. The success of the contract hinges on meeting these unstated but implied performance metrics, which are crucial for ensuring the operational readiness of the aircraft systems these materials support.

What is the risk associated with relying solely on The Boeing Company for these critical aircraft materials?

The primary risk associated with relying solely on The Boeing Company for these critical 'PBL Material' is supply chain disruption. As a single source, any production issues, labor disputes, raw material shortages, or logistical challenges faced by Boeing could directly impact the availability of these essential components for the Department of Defense. This dependence limits the government's flexibility to switch suppliers if issues arise. Furthermore, the lack of competition inherent in a sole-source award can reduce the incentive for the contractor to innovate or offer cost reductions over time. Mitigation strategies might include robust contract management, close monitoring of Boeing's production capabilities, and potentially developing alternative sourcing strategies for the future.

What is the strategic importance of 'PBL Material' for the Department of Defense's aviation readiness?

'PBL Material' is strategically vital for the Department of Defense's aviation readiness as it directly supports the sustainment and operational availability of critical aircraft platforms. Performance-Based Logistics (PBL) contracts, in general, aim to ensure that weapon systems are mission-capable when needed by focusing on outcomes rather than just parts. For 'PBL Material,' this means ensuring that the necessary components are available when required for maintenance, repair, and overhaul (MRO) activities. Without a reliable supply of these materials, the ability to maintain aircraft fleets, conduct training, and execute operational missions would be significantly hampered, directly impacting national security objectives and the overall effectiveness of air power.

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 JAMES S 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: $55,793,067

Exercised Options: $55,793,067

Current Obligation: $55,793,067

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $10,751,933

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRPA122D0001

IDV Type: IDC

Timeline