DoD Awards $124M to Boeing for KC-135 Fan Ducts, Lacking Competition
Contract Overview
Contract Amount: $124,028,196 ($124.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-09-27
End Date: 2030-02-28
Contract Duration: 1,980 days
Daily Burn Rate: $62.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: KC-135 FAN DUCTS UCA - ALL DATES AND QUANTITIES ARE ESTIMATES UNTIL DEFINITIZATION.
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $124.0 million to THE BOEING COMPANY for work described as: KC-135 FAN DUCTS UCA - ALL DATES AND QUANTITIES ARE ESTIMATES UNTIL DEFINITIZATION. Key points: 1. Significant contract value of $124M for essential aircraft components. 2. Sole-source award to Boeing raises concerns about potential overpricing and lack of innovation. 3. Long contract duration (2030) suggests a need for ongoing supply chain stability. 4. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector is critical for defense readiness.
Value Assessment
Rating: questionable
The contract value of $124M for KC-135 fan ducts needs careful review. Without competitive bidding, it's difficult to benchmark pricing against similar contracts or market rates, potentially leading to inflated costs.
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 lack of competition limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition could lead to higher prices, directly impacting taxpayer funds allocated for defense procurement.
Public Impact
Ensures continued operational readiness of the KC-135 fleet. Potential for higher costs due to lack of competitive bidding. Reliance on a single supplier for critical aircraft parts. Long-term commitment may lock in pricing, regardless of market fluctuations. Impacts the broader aerospace manufacturing sector and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
- Long-term contract duration
Positive Signals
- Essential for aircraft maintenance
- Ensures fleet readiness
- Established supplier relationship
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for aircraft components. Benchmarks for similar sole-source component contracts are often higher due to the lack of competitive pressure.
Small Business Impact
The contract data does not indicate any specific provisions or subcontracting goals for small businesses. The sole-source nature of this award to a large prime contractor like Boeing limits opportunities for small business participation.
Oversight & Accountability
The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this contract. Robust oversight is crucial to mitigate risks associated with sole-source procurements and ensure fair pricing.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Potential for vendor lock-in.
- Limited transparency in pricing.
- Risk of obsolescence if technology advances rapidly.
- Dependence on a single supplier for critical components.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ok, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $124.0 million to THE BOEING COMPANY. KC-135 FAN DUCTS UCA - ALL DATES AND QUANTITIES ARE ESTIMATES UNTIL DEFINITIZATION.
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 $124.0 million.
What is the period of performance?
Start: 2024-09-27. End: 2030-02-28.
What is the justification for the sole-source award, and has a thorough market analysis been conducted to ensure no viable competitive alternatives exist?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A comprehensive market analysis is essential to validate these claims and explore potential competition, even if limited. Without this, the government risks paying above fair market value.
How will the government ensure fair and reasonable pricing throughout the contract's duration, given the absence of competition?
Ensuring fair pricing on sole-source contracts requires rigorous cost analysis, negotiation, and potentially the use of should-cost models. The contracting officer must scrutinize Boeing's cost proposals, compare them to historical data and industry benchmarks, and negotiate aggressively. Regular price reviews and audits are also critical to monitor costs over the contract's life.
What measures are in place to assess the long-term performance and reliability of these fan ducts, and are there contingency plans if issues arise?
Performance and reliability are typically assessed through contractually defined acceptance criteria, testing, and warranty provisions. The government should monitor delivery quality and operational performance closely. Contingency plans might include establishing relationships with alternative suppliers for future needs or developing in-house repair capabilities if feasible.
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 AND STRUCTURAL COMPONENTS
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: $251,420,230
Exercised Options: $124,028,196
Current Obligation: $124,028,196
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $11,821,457
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPRPA124D001E
IDV Type: IDC
Timeline
Start Date: 2024-09-27
Current End Date: 2030-02-28
Potential End Date: 2030-02-28 00:00:00
Last Modified: 2024-11-06
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