Defense Logistics Agency awards $84.7M for 49,705 PIN ASSY units to Boeing, with no competition

Contract Overview

Contract Amount: $84,734,140 ($84.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-09-14

End Date: 2028-02-28

Contract Duration: 1,628 days

Daily Burn Rate: $52.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PIN ASSY - 49705 EA

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $84.7 million to THE BOEING COMPANY for work described as: PIN ASSY - 49705 EA Key points: 1. Contract awarded on a firm-fixed-price basis, indicating price certainty for the government. 2. The contract spans over four years, suggesting a long-term need for these components. 3. Sole-source award raises questions about potential price overruns and lack of market pressure. 4. The North American Industry Classification System (NAICS) code 334511 points to specialized manufacturing. 5. Geographic concentration in Arizona for this significant defense contract. 6. The award is a delivery order under a larger contract vehicle, not a standalone procurement. 7. No small business set-aside was applied to this specific award.

Value Assessment

Rating: questionable

Benchmarking the value of this specific award is challenging without knowing the total contract ceiling or previous pricing for PIN ASSY units. The firm-fixed-price structure provides some cost control, but the lack of competition means the government did not benefit from potential price reductions that could arise from a competitive bidding process. The unit price of approximately $1,706 per PIN ASSY ($84.7M / 49,705 units) should be compared against historical pricing and market rates for similar components, if available.

Cost Per Unit: Approximately $1,706 per unit. Benchmarking requires access to historical data for this specific part or comparable items, and knowledge of the contract vehicle under which this delivery order was issued.

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 typically occurs when a specific capability or product is only available from a single source, or in situations where urgency or national security dictates a direct award. The lack of competition means the government did not explore alternative suppliers or negotiate prices against multiple offers, potentially leading to a higher price than if competition had been present.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a competitive process, there is less assurance that the price reflects the lowest possible cost for the required goods.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches relying on these critical navigation and guidance system components. The contract ensures the supply of 49,705 units of 'PIN ASSY', essential for military operations. The geographic impact is concentrated in Arizona, where the components will likely be manufactured or fulfilled. This contract supports jobs within The Boeing Company and its supply chain, particularly in specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potential cost savings.
Lack of competition may indicate a lack of market availability or a strategic decision to sole-source, which warrants scrutiny.
Long contract duration (over 4 years) increases exposure to potential price escalations if not managed carefully.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a major defense contractor like Boeing suggests a reliable supplier for critical components.
Delivery order structure implies it's part of an existing, potentially pre-vetted, contracting mechanism.

Sector Analysis

The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511). This is a highly specialized segment of the aerospace and defense industry, characterized by high barriers to entry, significant R&D investment, and stringent quality requirements. Spending in this sector is heavily influenced by defense budgets and technological advancements. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar complex electronic systems and components within the DoD.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large prime contractor like Boeing suggests that the primary focus is on fulfilling a large-scale requirement, and any small business involvement would likely be through Boeing's own supply chain management, rather than a direct government mandate within this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. As a sole-source award, scrutiny might be higher to ensure fair and reasonable pricing. Transparency is limited by the lack of competitive bidding, but contract performance, delivery schedules, and payment milestones would be monitored. The firm-fixed-price nature simplifies some aspects of financial oversight compared to cost-plus contracts.

Related Government Programs

Defense Logistics Agency Procurement
Navigation and Guidance Systems
Aerospace and Defense Manufacturing
Sole-Source Defense Contracts
Boeing Defense Contracts

Risk Flags

Sole-source award requires justification.
Potential for price escalation over contract duration.
Dependency on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.7 million to THE BOEING COMPANY. PIN ASSY - 49705 EA

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 $84.7 million.

What is the period of performance?

Start: 2023-09-14. End: 2028-02-28.

What is the historical pricing trend for this specific 'PIN ASSY' component from The Boeing Company?

Historical pricing data for this specific 'PIN ASSY' component is not publicly available in the provided data. To assess historical trends, one would need access to previous contracts or delivery orders for this item issued to The Boeing Company by the Defense Logistics Agency or other DoD entities. Analyzing past pricing would involve comparing the current unit price of approximately $1,706 against previous awards, accounting for inflation, contract type, and any changes in specifications or quantities. Without this historical context, it is difficult to determine if the current price represents an increase, decrease, or stable cost over time.

How does the unit price of $1,706 compare to market rates for similar navigation system components?

Benchmarking the $1,706 unit price against market rates for similar navigation system components is challenging without specific technical specifications and a defined market. The 'PIN ASSY' likely refers to a specialized part within a larger system. A comprehensive market analysis would require identifying comparable components from other manufacturers, considering their features, performance, and production volumes. Given the sole-source nature of this award, direct comparison to competitively procured items is difficult. However, industry benchmarks for complex electronic or mechanical assemblies in the defense sector could provide a general reference point, suggesting that specialized, low-volume components often command higher unit prices.

What are the specific risks associated with a sole-source award for critical defense components?

The primary risks associated with a sole-source award for critical defense components include potential overpricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a heightened dependency on a single supplier. This dependency can create vulnerabilities in the supply chain, especially if the sole source faces production issues, financial instability, or geopolitical challenges. Furthermore, the government has less leverage in negotiating terms and conditions. While sole-source awards are sometimes necessary for unique capabilities, they require rigorous justification and careful oversight to mitigate these inherent risks and ensure fair value is obtained.

What is The Boeing Company's track record with the Defense Logistics Agency for similar components?

The Boeing Company is a major defense contractor with a long-standing relationship with the Department of Defense, including the Defense Logistics Agency (DLA). While specific details on their track record for 'PIN ASSY' components are not provided, Boeing is known for producing a wide range of aerospace and defense systems. Their history with DLA likely involves numerous contracts for various parts and equipment. Assessing their track record would involve reviewing past performance evaluations, on-time delivery rates, quality control metrics, and any past disputes or issues related to contracts with DLA for similar product categories. Generally, large contractors like Boeing are expected to meet stringent performance standards.

What is the anticipated impact of this contract on the overall defense budget for navigation systems?

This $84.7 million contract represents a specific expenditure within the broader defense budget allocated for navigation, guidance, and related systems. While significant for this particular component, its impact on the overall defense budget is relatively small when considered against the total annual defense spending, which runs into hundreds of billions of dollars. However, it contributes to the cumulative spending on sustainment and modernization of military platforms. The efficiency and cost-effectiveness of such awards, especially sole-source ones, are crucial for optimizing the allocation of limited defense resources across numerous programs and requirements.

Are there any alternative suppliers or technologies that could fulfill the need for 'PIN ASSY' components?

The data indicates this contract was awarded sole-source, suggesting that, at the time of award, either The Boeing Company was the only identified source, or specific justifications (like proprietary technology or urgent need) led to a sole-source determination. To ascertain if alternative suppliers or technologies exist, a market research analysis would be required. This would involve investigating other manufacturers of similar components, assessing the feasibility of adapting existing technologies, or exploring potential second-sourcing strategies. Without such research, it's presumed that no viable alternatives were identified or pursued for this specific procurement action.

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: $84,734,140

Exercised Options: $84,734,140

Current Obligation: $84,734,140

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $61,176

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