DoD's $10.27M Boeing contract for aircraft parts awarded via sole-source justification

Contract Overview

Contract Amount: $10,270,440 ($10.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-06-24

End Date: 2026-03-31

Contract Duration: 280 days

Daily Burn Rate: $36.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8511436108!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 $10.3 million to THE BOEING COMPANY for work described as: 8511436108!PBL MATERIAL BOEING Key points: 1. Contract awarded to a single supplier raises questions about price competitiveness. 2. Sole-source award limits opportunities for other qualified vendors to bid. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Contract duration of 280 days suggests a need for timely delivery. 5. Awarded by the Defense Logistics Agency, indicating support for military readiness. 6. The contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector.

Value Assessment

Rating: questionable

Benchmarking the value of this $10.27 million contract is challenging without competitive bids. The sole-source nature means there's no direct comparison to market rates derived from a bidding process. While the firm fixed-price structure aims to control costs, the absence of competition prevents an assessment of whether this price represents optimal value for the government compared to what other suppliers might offer. Further analysis would require understanding the specific nature of the 'PBL MATERIAL BOEING' and the necessity of this single source.

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 bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and may result in higher costs for the government compared to a fully competed contract. The lack of multiple bidders means the government did not benefit from the potential cost savings that competition typically drives.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without alternative bids, it's difficult to ascertain if the negotiated price is the most economical option available.

Public Impact

The primary beneficiaries are likely military aviation units requiring specific Boeing aircraft parts. Services delivered include the provision of 'PBL MATERIAL BOEING', crucial for maintaining aircraft. The geographic impact is centered around the Defense Logistics Agency's operational areas and potentially the end-user military bases. Workforce implications are minimal for this specific contract, as it focuses on material supply rather than direct labor services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Lack of transparency in the justification for sole-source procurement.
Dependence on a single supplier for critical aircraft components.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Awarded by a major defense agency, suggesting alignment with national security priorities.
Specific material designation ('PBL MATERIAL BOEING') implies a tailored solution.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components, particularly those tied to specific platforms like those manufactured by Boeing, can be highly concentrated. Such contracts often involve proprietary technology or long-standing supply chain relationships, which can sometimes lead to sole-source justifications. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar high-value, specialized aircraft components within the DoD.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to The Boeing Company, a large aerospace firm. There is no explicit indication of subcontracting opportunities for small businesses within the provided data. The focus on a large, prime contractor for specialized parts suggests that small businesses are unlikely to be primary participants in this specific award, though they may be part of Boeing's broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the firm fixed-price contract type, which obligates Boeing to deliver the specified materials. Transparency is limited due to the sole-source nature of the award; however, the contract details and justification should be available through federal procurement databases. The DLA has established procedures for contract management and oversight to ensure compliance and performance.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Sole-Source Defense Contracts
Boeing Defense Contracts
Military Aircraft Maintenance Support

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.3 million to THE BOEING COMPANY. 8511436108!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 $10.3 million.

What is the period of performance?

Start: 2025-06-24. End: 2026-03-31.

What is the specific nature of 'PBL MATERIAL BOEING' and why is it only available from Boeing?

The designation 'PBL MATERIAL BOEING' likely refers to Performance-Based Logistics (PBL) material specific to Boeing platforms. PBL contracts are designed to incentivize contractor performance and reduce total ownership costs by focusing on outcomes rather than specific parts. The material is likely proprietary to Boeing's aircraft designs or requires specialized manufacturing processes controlled by Boeing. This proprietary nature or specialized manufacturing capability is often the justification for sole-source awards, as other companies may not possess the necessary intellectual property, tooling, or expertise to produce or supply these exact materials, thus ensuring airworthiness and performance standards.

What is the historical spending pattern for this specific type of material or contract with Boeing?

Without access to detailed historical procurement data for this specific 'PBL MATERIAL BOEING' designation, it is difficult to establish a precise spending pattern. However, general trends in defense contracting show significant and consistent spending on aircraft parts and sustainment, particularly for major platforms like those produced by Boeing. Contracts for such materials often span multiple years and can involve substantial dollar values, reflecting the long lifecycle of military aircraft. The Defense Logistics Agency (DLA) is a primary entity responsible for procuring these types of sustainment materials. Analyzing past DLA awards for similar Boeing aircraft components would provide context on the scale and frequency of such procurements.

What are the risks associated with a sole-source award for critical aircraft parts?

Sole-source awards for critical aircraft parts carry several risks. Firstly, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to negotiate the best possible value. Secondly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences production issues, financial instability, or decides to discontinue the product line. This dependency can also limit the government's flexibility in adapting to new technologies or alternative solutions. Finally, sole-source awards can reduce transparency and accountability, making it harder to scrutinize the necessity and cost-effectiveness of the procurement.

How does the firm fixed-price contract type mitigate or exacerbate risks in this sole-source scenario?

The firm fixed-price (FFP) contract type is generally beneficial as it places the risk of cost overruns on the contractor, The Boeing Company. This means Boeing is obligated to deliver the specified materials at the agreed-upon price, regardless of their own production costs. In a sole-source scenario, this FFP structure helps to cap the government's financial exposure, preventing unexpected cost increases. However, it does not address the risk of the price being inherently too high due to the lack of competition. While FFP provides cost certainty, the initial price negotiation in a sole-source context remains critical for ensuring value for money.

What is the Defense Logistics Agency's typical approach to procuring aircraft parts, and how does this contract align?

The Defense Logistics Agency (DLA) is the primary logistics provider for the U.S. military, responsible for procuring a vast array of items, including aircraft parts, fuel, and equipment. DLA typically aims for competitive procurements to achieve best value and cost savings. However, for specialized, proprietary, or sustainment-critical items, especially those tied to specific weapon systems like Boeing aircraft, sole-source or limited-competition awards are sometimes necessary. This contract, being a sole-source award for specific Boeing material, aligns with DLA's need to ensure the availability of essential components for military readiness, even if it deviates from the ideal of full and open competition.

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 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: $10,270,440

Exercised Options: $10,270,440

Current Obligation: $10,270,440

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRPA123D9003

IDV Type: IDC

Timeline