DoD Awards Boeing $41.4M for Rotary Wing Blades, Lacking Competition
Contract Overview
Contract Amount: $41,397,103 ($41.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2020-01-15
End Date: 2024-07-31
Contract Duration: 1,659 days
Daily Burn Rate: $25.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: BLADE,ROTARY WING NSN: 1615-01-653-8691 MFR PART NUMBER: 7-5R0430100-105
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $41.4 million to THE BOEING COMPANY for work described as: BLADE,ROTARY WING NSN: 1615-01-653-8691 MFR PART NUMBER: 7-5R0430100-105 Key points: 1. Significant award to Boeing for critical helicopter components. 2. Sole-source nature raises concerns about price discovery and value. 3. High value contract for specialized aerospace manufacturing. 4. Potential for taxpayer savings through competitive bidding.
Value Assessment
Rating: questionable
The contract's firm fixed price structure is standard, but the lack of competition makes it difficult to assess if the $41.4 million award represents a fair market price compared to similar contracts for rotary wing blades.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government compared to a competitive procurement process.
Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these essential helicopter components.
Public Impact
Ensures continued operational readiness for rotary wing aircraft. Supports a major defense contractor, potentially impacting jobs. Highlights reliance on specific manufacturers for critical parts. Raises questions about the long-term strategy for sourcing such components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
Positive Signals
- Ensures supply of critical components
- Supports established manufacturer
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for aircraft components. Spending benchmarks for similar specialized parts can vary widely, but a lack of competition often inflates costs.
Small Business Impact
The awardee, The Boeing Company, is a large aerospace corporation. There is no indication that small businesses were involved in this specific procurement, nor is there a clear pathway for their participation given the sole-source nature.
Oversight & Accountability
The Defense Logistics Agency is responsible for this award. Oversight should focus on justifying the sole-source decision and ensuring fair pricing, even without competition, through robust negotiation and market research.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Limited market research evident
Tags
search-detection-navigation-guidance-aer, department-of-defense, az, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.4 million to THE BOEING COMPANY. BLADE,ROTARY WING NSN: 1615-01-653-8691 MFR PART NUMBER: 7-5R0430100-105
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 $41.4 million.
What is the period of performance?
Start: 2020-01-15. End: 2024-07-31.
What is the justification for not competing this contract, and what steps were taken to ensure a fair price?
The justification for not competing this contract is not provided in the data. To ensure a fair price, the agency should have conducted thorough market research, benchmarked against similar sole-source procurements, and engaged in rigorous negotiation with the sole-source provider. Independent cost analysis might also be employed.
What are the risks associated with relying on a sole-source provider for critical helicopter components?
The primary risks include inflated pricing due to lack of competition, potential supply chain vulnerabilities if the sole-source provider faces production issues, and limited opportunities for technological innovation or alternative solutions. It also reduces leverage for the government in future negotiations.
How does this sole-source award impact the long-term cost-effectiveness of maintaining the rotary wing fleet?
Sole-source awards typically increase long-term costs as the government lacks competitive pressure to drive down prices. This can lead to higher sustainment costs for the fleet over its lifespan. Exploring future competitive strategies or alternative component designs could mitigate this impact.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument 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: 5000 E MCDOWELL RD, MESA, AZ, 85215
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: $41,397,103
Exercised Options: $41,397,103
Current Obligation: $41,397,103
Subaward Activity
Number of Subawards: 9
Total Subaward Amount: $1,796,146
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPRPA118D002U
IDV Type: IDC
Timeline
Start Date: 2020-01-15
Current End Date: 2024-07-31
Potential End Date: 2024-07-31 12:07:00
Last Modified: 2024-06-18
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