Boeing Awarded $29M for KC-46 Tanker Parts, Raising Concerns Over Sole-Source Strategy
Contract Overview
Contract Amount: $28,986,208 ($29.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-04-07
End Date: 2025-06-06
Contract Duration: 425 days
Daily Burn Rate: $68.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: KC46 CC DLRS STRATEGIC LTC POP 3
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63166
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $29.0 million to THE BOEING COMPANY for work described as: KC46 CC DLRS STRATEGIC LTC POP 3 Key points: 1. Significant contract awarded to a single vendor, raising questions about competition. 2. The contract is for essential parts for the KC-46 tanker program. 3. Potential for inflated costs due to lack of competitive bidding. 4. The Defense Logistics Agency is the contracting entity.
Value Assessment
Rating: questionable
The contract value of $28.9M for aircraft parts is substantial. Without competitive pricing data, it's difficult to assess if this represents fair value. The lack of a benchmark (br: 68203) further complicates this assessment.
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 considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for these aircraft parts due to the absence of competitive pressure.
Public Impact
Taxpayers may be overpaying for critical aircraft components. Lack of competition could stifle innovation in aircraft parts manufacturing. Dependence on a single supplier for essential military hardware poses a risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
Positive Signals
- Essential for KC-46 program
- Awarded to established defense contractor
Sector Analysis
This contract falls within the aerospace and defense sector, specifically for aircraft parts. Spending in this area is critical for national security but often involves complex supply chains and limited competition.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication that small businesses were involved in this specific sole-source award, limiting their opportunities.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is not being overcharged and that the parts meet all specifications. Transparency in the justification for sole-sourcing is crucial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of transparency in pricing justification.
- Dependence on a single supplier.
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 $29.0 million to THE BOEING COMPANY. KC46 CC DLRS STRATEGIC LTC POP 3
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 $29.0 million.
What is the period of performance?
Start: 2024-04-07. End: 2025-06-06.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or circumstances where competition is not feasible. For this contract, the specific reason needs to be documented by the Defense Logistics Agency. To ensure fair pricing, the agency should conduct thorough cost analyses and potentially negotiate aggressively with Boeing, even without direct competition, to mitigate the risk of overpayment.
What are the long-term risks associated with relying on a sole-source supplier for critical KC-46 tanker components?
Long-term reliance on a sole-source supplier for critical components like those for the KC-46 tanker presents several risks. These include potential price escalations over time as the supplier faces no competitive pressure, supply chain vulnerabilities if the sole supplier experiences production issues or financial instability, and a lack of incentive for the supplier to innovate or improve efficiency. This dependence can also limit the government's flexibility in future procurement decisions.
How does this sole-source award impact the overall cost-effectiveness of the KC-46 program for taxpayers?
This sole-source award likely has a negative impact on the overall cost-effectiveness of the KC-46 program. Without competition, Boeing has less incentive to offer the lowest possible price, potentially leading to higher per-unit costs for these parts. Over the life of the program, these increased costs can accumulate, meaning taxpayers ultimately bear a greater financial burden for the acquisition and sustainment of the KC-46 fleet.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: SPRPA122R002U
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: $28,986,208
Exercised Options: $28,986,208
Current Obligation: $28,986,208
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $456,913
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPRPA122D002U
IDV Type: IDC
Timeline
Start Date: 2024-04-07
Current End Date: 2025-06-06
Potential End Date: 2025-06-06 00:00:00
Last Modified: 2025-05-08
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