Boeing awarded $467.8M contract for PBL Material, supporting critical aircraft manufacturing needs

Contract Overview

Contract Amount: $46,782,950 ($46.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-11-18

End Date: 2025-11-18

Contract Duration: 365 days

Daily Burn Rate: $128.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8511018570!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 $46.8 million to THE BOEING COMPANY for work described as: 8511018570!PBL MATERIAL BOEING Key points: 1. Contract focuses on sustainment of existing aircraft platforms, indicating a need for ongoing support rather than new development. 2. The fixed-price nature of the contract provides cost certainty for the government, assuming the scope remains stable. 3. Sole-source award raises questions about potential lack of competition and its impact on pricing. 4. The contract duration of one year suggests a tactical approach to procurement, possibly for immediate needs or phased implementation. 5. This award falls within the broader category of defense logistics and sustainment, a significant area of federal spending. 6. The specific Product Breakdown List (PBL) material suggests a focus on specific components crucial for aircraft maintenance and readiness.

Value Assessment

Rating: fair

The contract value of $467.8 million for a one-year period for aircraft manufacturing materials appears substantial. Without specific details on the exact materials and quantities, a direct value-for-money assessment is challenging. However, given the sole-source nature, it is difficult to benchmark against competitive pricing. The fixed-price structure offers some cost control, but the overall value depends heavily on the necessity and criticality of the specified PBL materials for ongoing defense operations.

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 typically occurs when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition limits the government's ability to explore alternative suppliers or negotiate potentially lower prices through a bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding. It also reduces the incentive for the sole provider to offer the most competitive pricing.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches relying on Boeing aircraft for operational readiness. The contract ensures the availability of critical materials necessary for the sustainment and maintenance of existing aircraft fleets. Geographic impact is likely concentrated around Boeing's manufacturing and support facilities, as well as military bases where these aircraft are operated. Workforce implications include continued employment for personnel involved in the production and supply chain of these specific aircraft materials.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of competition may reduce the incentive for Boeing to innovate or offer cost-saving alternatives.
Dependence on a single supplier for critical materials can create supply chain vulnerabilities.
Contract duration of one year may not reflect long-term strategic planning for aircraft sustainment.

Positive Signals

Ensures availability of critical materials for maintaining operational readiness of existing aircraft fleets.
Fixed-price contract provides cost certainty for the government within the defined scope.
Supports a key domestic aerospace manufacturer, contributing to the defense industrial base.
The award is for PBL material, suggesting a focus on specific, essential components for sustainment.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. This contract for aircraft manufacturing materials falls squarely within the defense logistics and sustainment sub-sector. Spending in this area is crucial for maintaining the operational readiness of military assets. Comparable spending benchmarks would involve analyzing other sustainment contracts for major defense platforms, which often run into hundreds of millions or billions of dollars annually.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, the primary focus is on the direct delivery of materials by Boeing. There may be opportunities for small businesses to participate as subcontractors to Boeing, but this is not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically the Defense Logistics Agency. Accountability measures would be tied to the terms and conditions of the firm-fixed-price contract, including delivery schedules and material specifications. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Support
Air Force Sustainment Programs
Navy Aviation Maintenance
PBL Contracts
Boeing Defense Contracts

Risk Flags

Sole-source award
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.8 million to THE BOEING COMPANY. 8511018570!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 $46.8 million.

What is the period of performance?

Start: 2024-11-18. End: 2025-11-18.

What specific types of PBL materials are included in this $467.8 million contract, and how do they contribute to aircraft readiness?

The provided data indicates the contract is for 'PBL MATERIAL BOEING' and falls under NAICS code 336411 (Aircraft Manufacturing). PBL, or Performance-Based Logistics, contracts are designed to provide integrated system support, often including spare parts, maintenance, and repair services, focused on achieving specific performance outcomes. While the exact list of materials is not detailed, PBL material typically refers to critical components, sub-assemblies, or raw materials essential for the sustainment and operational readiness of specific aircraft platforms. These materials could range from engine components and avionics parts to structural elements and specialized repair kits. Their contribution to readiness is direct: ensuring that aircraft can be maintained, repaired, and kept in operational status to meet mission requirements without significant delays due to parts unavailability.

How does the $467.8 million value compare to historical spending on similar PBL materials for Boeing aircraft?

To accurately compare the $467.8 million value to historical spending, one would need access to historical contract data for similar PBL material procurements for Boeing aircraft from the Defense Logistics Agency (DLA) or other relevant Department of Defense (DoD) agencies. This specific award covers a 365-day period (2024-11-18 to 2025-11-18). If historical data shows similar annual awards in the range of $400-500 million for comparable sustainment materials for Boeing platforms (like the C-17, KC-46, F-18, or F-15), then this award would be consistent with past spending patterns. Conversely, if historical awards were significantly lower or higher, it might indicate a change in demand, pricing, or the scope of sustainment being procured. Without that comparative data, assessing whether this value is high or low is speculative.

What are the primary risks associated with a sole-source award of this magnitude for critical aircraft materials?

The primary risk associated with a sole-source award of this magnitude ($467.8 million) for critical aircraft materials is the potential for inflated pricing due to the lack of competition. When a single vendor is the only option, they may have less incentive to offer the most cost-effective solution. Another significant risk is supply chain vulnerability; the government becomes heavily reliant on Boeing's ability to produce and deliver these specific materials on time and to specification. Any disruption in Boeing's production, supply chain, or labor force could directly impact the operational readiness of the aircraft relying on these materials. Furthermore, a sole-source award can stifle innovation, as there is no competitive pressure for the contractor to develop more efficient or cost-effective material solutions.

What performance metrics or oversight mechanisms are likely in place to ensure The Boeing Company delivers value for this $467.8 million contract?

Given this is a Performance-Based Logistics (PBL) contract, it is highly probable that specific performance metrics (Key Performance Parameters - KPPs) are defined within the contract. These metrics would likely focus on outcomes such as material availability rates, on-time delivery, defect rates, and potentially turnaround times for critical component repairs or replacements. Oversight would be managed by the Defense Logistics Agency (DLA) contracting officers and technical representatives, who would monitor Boeing's performance against these metrics. Payment could be tied to the achievement of these performance standards. Regular reviews, audits, and reporting requirements would also be part of the oversight framework to ensure accountability and validate that the government is receiving the intended value and support for its investment.

How does this contract align with the Department of Defense's broader strategy for aircraft sustainment and readiness?

This contract aligns with the DoD's broader strategy by focusing on the sustainment of existing aircraft platforms, which is crucial for maintaining readiness without the immediate need for costly new platform procurements. PBL contracts, like this one, are a favored approach as they shift the focus from simply buying parts to achieving desired operational outcomes (e.g., aircraft availability). By ensuring the supply of critical materials, the DoD aims to reduce readiness gaps and extend the service life of its current fleet. This approach supports cost-effectiveness by potentially leveraging economies of scale and long-term support agreements, although the sole-source nature here warrants careful price scrutiny. It directly contributes to the readiness and operational capability of the forces reliant on the specific Boeing aircraft supported by these materials.

What is the significance of the 'Aircraft Manufacturing' NAICS code (336411) in the context of this contract?

The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' signifies that the primary business activity related to this contract involves the production of aircraft and/or their parts. In the context of this $467.8 million award for PBL Material, it indicates that the materials being procured are either components directly used in the manufacturing or assembly of Boeing aircraft, or they are critical parts and sub-assemblies necessary for the ongoing maintenance, repair, and overhaul (MRO) of existing Boeing aircraft fleets. This code helps categorize the contract within the broader industrial landscape, allowing for comparisons with other spending in the aerospace manufacturing sector and identifying the specific industry segment involved in fulfilling the government's needs.

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

Solicitation ID: SPRPA118R002U

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: $46,782,950

Exercised Options: $46,782,950

Current Obligation: $46,782,950

Subaward Activity

Number of Subawards: 69

Total Subaward Amount: $11,800,415

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