DoD Awards Boeing $66.1M for New Spares, Sole-Source Contract Raises Oversight Concerns
Contract Overview
Contract Amount: $66,104,739 ($66.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-06-02
End Date: 2033-08-30
Contract Duration: 3,742 days
Daily Burn Rate: $17.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NEW SPARES
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $66.1 million to THE BOEING COMPANY for work described as: NEW SPARES Key points: 1. Significant award to a major defense contractor, The Boeing Company. 2. Sole-source procurement method limits price discovery and competition. 3. Long contract duration (10 years) warrants close monitoring for cost overruns. 4. Focus on critical navigation and guidance systems highlights national security importance.
Value Assessment
Rating: questionable
The contract value of $66.1 million for new spares is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates or alternative suppliers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits opportunities for price negotiation and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible price for these critical spares.
Public Impact
Ensures availability of critical navigation and guidance system spares for military aircraft. Supports the operational readiness of Department of Defense assets. Potential for increased costs due to sole-source nature impacts overall defense budget efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Long contract duration
- Lack of small business participation indicated
Positive Signals
- Supports critical defense systems
- Ensures operational readiness
Sector Analysis
This award falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for maintaining advanced military capabilities, but often involves specialized, high-cost components.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this sole-source contract with a large prime contractor. Further review may be needed to ensure small business opportunities are not overlooked.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense and the Defense Logistics Agency to ensure fair pricing and prevent potential waste, fraud, or abuse over the contract's ten-year duration.
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 lacks competitive pricing.
- Long contract duration increases risk of cost escalation.
- Potential for vendor lock-in.
- Limited transparency on pricing justification.
- No clear indication of small business participation.
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 $66.1 million to THE BOEING COMPANY. NEW SPARES
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 $66.1 million.
What is the period of performance?
Start: 2023-06-02. End: 2033-08-30.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the contractor. To ensure fair pricing, the agency should conduct thorough cost analyses, benchmark against similar procurements, and potentially negotiate specific price reduction clauses or performance metrics within the contract.
What are the risks associated with a 10-year contract for spare parts, particularly under a sole-source arrangement?
A 10-year contract for spare parts carries risks of price escalation due to inflation, technological obsolescence, and potential changes in market conditions. Under a sole-source arrangement, these risks are amplified as there is no competitive pressure to drive down costs or incentivize efficiency. The government is locked into potentially unfavorable terms for an extended period.
How will the effectiveness of these new spares in maintaining operational readiness be measured and verified?
Effectiveness will be measured through key performance indicators (KPIs) such as spare parts availability rates, mean time between failures (MTBF) for components, and the impact on aircraft mission capable rates. Regular performance reviews, data analysis from logistics systems, and feedback from end-users will be crucial for verifying the spares' contribution to operational readiness.
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
Solicitation ID: SPRRA119R0001
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: $66,104,739
Exercised Options: $66,104,739
Current Obligation: $66,104,739
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $15,594,495
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: 2023-06-02
Current End Date: 2033-08-30
Potential End Date: 2033-08-30 12:08:00
Last Modified: 2025-10-28
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