DoD awards Boeing $155.6M contract for aircraft parts, raising questions on value and competition
Contract Overview
Contract Amount: $155,622,529 ($155.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 1999-12-29
End Date: 2011-05-04
Contract Duration: 4,144 days
Daily Burn Rate: $37.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 100
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $155.6 million to THE BOEING COMPANY for work described as: Key points: 1. Significant award to a single large contractor, Boeing. 2. Contract duration spans over a decade, indicating long-term needs. 3. Full and open competition after exclusion of sources suggests initial limitations. 4. Firm fixed price contract type aims to control costs.
Value Assessment
Rating: fair
The $155.6 million award over 11 years suggests a substantial investment. Without specific unit details or comparison points, assessing value against similar aircraft parts contracts is difficult. The long duration might indicate a need for specialized parts or services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition after exclusion of sources.' This implies that while competition was eventually sought, there may have been an initial period where only specific sources were considered, potentially impacting price discovery.
Taxpayer Impact: The $155.6 million expenditure represents taxpayer funds allocated to defense procurement. The effectiveness of the competition method in securing the best value for taxpayers is a key consideration.
Public Impact
Taxpayers funded a significant contract for aircraft components over an extended period. The long contract duration could impact the agility of defense procurement for these parts. Boeing, a major defense contractor, is the sole awardee, highlighting industry concentration.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for limited competition due to 'exclusion of sources' clause.
- Long contract duration may not reflect current market prices.
- Lack of specific part details makes value assessment challenging.
Positive Signals
- Firm fixed price contract type helps control costs.
- Award to a major, experienced contractor like Boeing.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically for aircraft parts. Spending benchmarks in this area are highly variable depending on the type and quantity of parts, but large, long-term contracts are common for major defense systems.
Small Business Impact
The awardee is The Boeing Company, a large prime contractor. There is no indication in the provided data whether small businesses were involved as subcontractors or if this contract was specifically set aside for small business participation.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Oversight would focus on contract performance, delivery schedules, and adherence to the firm fixed price terms to ensure accountability and proper use of funds.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Long contract duration (11 years).
- Potential for limited competition ('exclusion of sources').
- Lack of specific item details for value assessment.
- Award to a single, large prime contractor.
Tags
department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $155.6 million to THE BOEING COMPANY. See the official description on USAspending.
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $155.6 million.
What is the period of performance?
Start: 1999-12-29. End: 2011-05-04.
What specific aircraft parts were procured under this contract, and how does their cost compare to market rates for similar components?
The provided data does not specify the exact aircraft parts. To assess value, a detailed breakdown of the procured items is necessary. Benchmarking against industry prices for comparable components, considering quantity, specifications, and lead times, would reveal if the $155.6 million expenditure represents a fair market price or if there's potential for cost savings.
What were the specific reasons for excluding certain sources initially, and did this exclusion limit competitive pricing?
The data states 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' implying an initial restriction. Understanding the justification for this exclusion is crucial. If it was due to proprietary technology or unique capabilities, it might be warranted. However, if it artificially limited the bidder pool, it could have led to higher prices than a truly open competition might have achieved.
How effectively did the firm fixed price contract type manage costs over the 11-year duration, considering potential market fluctuations?
A firm fixed price contract is designed to shift cost risk to the contractor, providing budget certainty. Over an 11-year period, however, significant market shifts in raw materials or labor could impact Boeing's profitability or necessitate contract modifications if not adequately accounted for in the initial pricing. Effective management would involve monitoring for any such impacts and ensuring the fixed price remained fair.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Offers Received: 100
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: ROUTE 291 & STEWART AVE., RIDLEY PARK, PA, 19078
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 1999-12-29
Current End Date: 2011-05-04
Potential End Date: 2011-05-04 00:00:00
Last Modified: 2021-03-22
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